Connecticut Legislature Approves 403(b) Fee Disclosure Bill

Both chambers of the Connecticut legislature have now approved a measure that would require disclosures by 403(b) plans political subdivisions in the Nutmeg State offer.

On June 7, the state Senate passed HB 7161, the 403(b) fee disclosure bill on a 36-0 vote. The House passed the bill on May 2, also unanimously.

The measure would require service providers of 403(b) retirement plans to disclose conflicts of interest. It also would require that any company that administers a 403(b) plan offered by a political subdivision (and not administered by the state itself) disclose in writing, upon enrollment and annually thereafter:

• the fee ratio and return, net of fees, for each investment under the retirement plan; and

• the fees paid to any person who, for compensation, engages in the business of providing investment advice to participants in the retirement plan either directly or through publications or writings.

The current session of the Connecticut legislature ended June 7; by law, if the governor receives a bill after the session adjourns, he or she has 15 days to veto or it automatically becomes law — although a veto is not expected in this instance.

If HB 7161 is enacted, it will take effect Oct. 1, 2017.

Ray Harmon is government affairs counsel to the American Retirement Association.