As the last wave of new fee disclosures is readied for inclusion with quarterly statements this month, the big question remains: What impact, if any, will the barrage of fee disclosures have on the retirement plan marketplace in general, and, more specifically, on retirement readiness for participants?

While the pricing landscape for retirement plan recordkeepers is, in many cases, still a confusing combination of basis points, rebates, formulas, and wraps, we have seen a marked uptick in sales activity as an increasing number of plan sponsors endeavor to measure the reasonableness of their vendors fees, services, and value. The service provider disclosure requirements of 408(b)2 should have a positive effect on the retirement plan marketplace, allowing sponsors a better understanding of the underlying fee components and fee assessment methodologies, and making them better prepared to compare their fees with market rates. Increasingly prevalent and accurate benchmarks should lead to lower and more equitable fees, lower-cost investment options, and improved retirement savings for many participants.

But this month, the focus is on the 404(a)5 disclosures for participants. Yes, it's important that participants understand that their retirement plans are not free, and that their investment decisions affect the expenses charged to their retirement savings accounts. But will that really be accomplished by sending information that vast segments of the participant population won t properly study and when even those who do will not have any context to gauge the new fees that appear therein? Only a third of participants spent more than five minutes looking at the annual disclosures they received last quarter, and only a fraction of a percent actually called to ask questions of their plan sponsors and service providers. How many participants will notice the additional fee detail on their statements this quarter? And for those who do, will they have the knowledge to appropriately interpret the information they ve been provided?

Recordkeepers and plan sponsors should not rely on participants to process these disclosures into actionable decisions on their own. The required disclosures, while a step in the right direction, are far from sufficient. If we want participants to understand and take appropriate action in their accounts, service providers and plan sponsors need to proactively engage with participants, using communication strategies targeted to each specific population segment that will deliver the appropriate tools for effective decision making.