The groups hope that making comparisons easier will encourage more small businesses to adopt retirement savings plans. Now, only a third of the 32 million people who work for small businesses are covered by an employer-sponsored retirement plan. So last year, she asked the American Bankers Association, the American Council of Life Insurers and mutual fund trade group Investment Co. Institute to develop a tool businesses can use to compare fees and expenses. That could lead to lower costs, Herman says.
Small businesses stand to benefit most from the form.
Businesses won't be legally required to use the new disclosure form. And there are other tools available to employers. But the groups that developed the form expect widespread acceptance. For one thing, they represent most plan providers. They may find ways to cut costs by dropping some a la carte services offered by the plan provider.