If you are thinking about starting a retirement plan for your employees, but worry that the financial language of its documents will be too difficult for them (or you) to understand, fear not. The federal government is addressing this very issue.
During the fourth quarter of 2007, the U.S. Securities and Exchange Commission (SEC) approved a preliminary proposal that would require funds to provide a summary prospectus with key information in “plain English” (i.e., nontechnical, jargon-free wording).
The thinking behind this proposal is to present information to participants and plan sponsors in clear and concise language, which would be understandable by individuals lacking familiarity with financial terms. The information in question includes investment objectives, costs, risk, returns, and top 10 portfolio holdings, as well as the tax consequences of investing in a particular fund. The SEC proposal also called for more material to be available and/or deliverable online.
NADART has stayed ahead of the curve with this topic. Our fund descriptions and objectives, as well as the fund returns and funds overview (i.e., top 10 holdings of each fund), are written in fairly straightforward language and are already accessible via our Web site. If you are interested in learning more about NADART's retirement plan services and the features we offer, please contact one of our representatives at (800) 462-3278, ext. 7161 or e-mail nadart401k@nada.org.