Transparency is the watchword as a series of reform measures relating to pensions work their way through Congress, the U.S. Department of Labor and the Financial Accounting Standards Board (FASB). While it's not clear whether any of these changes will happen this year, it is certain that more disclosures–and more expenses–are on the way for pension fund sponsors. FASB's new disclosure rules, now in the comment period, would require a more detailed breakdown of asset classes and risks by sponsors.

In a comment letter, William Quinn, chairman of the Committee on Investment of Employee Benefit Assets (CIEBA), an organization representing 110 major private sector pension plans covering 17 million employees, has criticized the proposed new rules on several grounds. Agreeing that there is a need for more transparency, Quinn says that disclosure should focus on "strategic investment policies and risk parameters," and not on what he calls "ever increasing levels of detail about particular investments." He says CIEBA members are concerned about the increased detail of proposed reporting changes, and also about the lack of any thresholds. Hedge funds and private equity, for example, actually represent only 3.15% and 4.66% respectively of plan assets under management in defined benefit plans, according to CIEBA. On concentration of risk, Quinn says CIEBA felt the proposed requirement to report on concentrated holdings would be impossible to comply with. "It is not clear how you would identify homogeneous risk," he writes.

As for Congress, the House is working on measures that would require clearer disclosure of fees in retirement plans, and would mandate that all 401k plans include a passive index option. A House source says, however, that it is unlikely those measures will make it into law this year. A fee disclosure bill was passed by the House Education and Labor Committee in late April, but on a party-line vote, and nothing is likely to come out of the Senate in the current session of Congress. That said, CIEBA Managing Director Judy Schub cautions: "I never try to predict what Congress will do in an election year." The U.S. Department of Labor, meanwhile, is moving in three areas, with proposed regulatory changes that would require plan sponsors to disclose indirect compensation to the government, require service providers, such as advisers, to disclose indirect compensation to plan sponsors and mandate disclosure of indirect compensation to plan participants. Those changes are all in the comment stage.