[sschullo]

Hi,
The Spark Institute consults employers and service providers with their 401k, 403b and 457b plans. I was under the impression that they were fairly objective and also looked out for the ordinary employee. I was wrong.

This report is lengthy, highly technical, full of legal and compliance topics with the full support for the active management dogma. The report overwhelmingly supports the status quo fee structure of the current 401k employer sponsored plans, explains why the TSP plan is an inappropriate model for private plans, says, with a straight face, that fees and costs are currently fair and are explained sufficiently; to explain any more would confuse participants (Where have we heard this before!) and lastly of course, they had to categorically reject index strategy. All of this was bravely spoken.

After reading this report, the tone says it all. The topics are repetitive and contradictory on most topics and said little to nothing to address problems and provide participant-driven solutions in the defined contribution plans. (For example, they say that the fees are already explained and go on and say that explaining the fees would confuse participants).
Oh sure, it’s all perfectly legal, but the lack of fiduciary and ethical standards is overwhelming. The industry is sick and tired of the repeated allegations that employer sponsored tax deferred contribution plans are expensive, don't provide adequate education and hide the fees. Consequently, my speculation is that they got Sparks to issue a "white paper" to debunk all that has been said about retirement plans in the last 15 years. Now the industry thinks they have something to wave to gullible plan sponsors and to silence critics.

There just might be some good news: I think the industry is especially threatened by the Miller committee investigations of these plans last year and are especially frightened at the mere suggestion that index funds should be part of all plans.
Read on: http://www.sparkinstitute.org/content-file...009%20FINAL.pdf

This is also very telling. The recommendations to congress on fees and costs are accessible to MEMBERS ONLY! For an Institute that touts transparency in fees in every sentence, it is hiding something from the ordinary employee. Take a look: http://www.sparkinstitute.org/comments-and-materials.php