The agency made five specific recommendations that the DOL (specifically the Employee Benefit Security Administration) should implement:
1. Require that quarterly fee disclosures for participant-directed individual retirement accounts provide participants the actual cost of asset-based investment fees paid.
2. Take steps to provide participants important information concerning the cumulative effect of fees on savings over time.
3. Require that participant fee disclosures include fee benchmarks for plan investment options.
4. Require that participant fee disclosures for participant-directed individual retirement accounts include ticker information.
5. Require that fee disclosures for participant-directed individual retirement accounts use a consistent term for asset-based investment fees, such as "gross expense ratio."
To arrive at their conclusions, GAO assessed participants’ understanding of several large plans’ fee disclosures (largely mutual fund fee type disclosures) as well as general questions about fees. The agency also studied the way other countries have created meaningful plan fee disclosures.
For instance, the agency found that in New Zealand, consumer testing led regulators to mandate shorter disclosures that made comparing investment funds easier, the GAO said. The country also discovered that disclosures that showed the impact of fees in actual dollars rather than just in percentages created greater investor understanding.