DTCC Connection

Sep 01, 2012 • DTCC Connection

DTCC Brings Greater Transparency to U.S. Retirement Assets Market

by Rich Marulanda/em>


Related Information

Snapshot of the Services

DTCC is putting the finishing touches on system enhancements that will strengthen the multi-trillion-dollar market for retirement savings in the U.S. The goals are to help service providers comply with new U.S. Department of Labor rules and create much-needed transparency for retirement plan accounts.


To achieve this ambitious agenda, DTCC’s Wealth Management Services business is working on the highly-anticipated first phase of enhancements to two of its services for the mutual funds industry, Networking and Mutual Fund Profile Service. Completion is scheduled for the first quarter of 2013.



Ann Bergin, Managing Director and General Manager, DTCC Wealth Management Services

“We have a strong tradition of enhancing the functionality of our services to provide the funds industry with greater access to information that will allow them to strengthen their business and better comply with regulatory requirements,” said Ann Bergin, Managing Director and General Manager, DTCC Wealth Management Services. “With retirement assets totaling $17.9 trillion as of fourth quarter 2011 and accounting for 36% of all household financial assets in the U.S., it is especially rewarding to play a role in helping to increase market transparency so investors can better manage their retirement savings.”


New disclosure requirements


The new regulations under the Employee Retirement Income Security Act of 1974 (ERISA), Section 408(b)(2), and ERISA, Section 404(a)(5), make significant changes to the required disclosures for both plan sponsors and plan administrators and require all covered plan service providers to furnish more information about their services, expenses and fees. To date, the exchange of this information has been accomplished through non-automated means, such as hard-copy spreadsheets, emails and faxes, methods that are inefficient and error-prone.


The Employee Benefits Security Administration (EBSA) is responsible for administering and enforcing the fiduciary, reporting and disclosure provisions of Title I of ERISA. The agency oversees approximately 718,000 private pension plans, including 498,000 participant-directed individual account plans, such as 401(k)-type plans.


Transforming practices


DTCC has been working closely with its clients, industry members and the Investment Company Institute’s (ICI)Bank, Trust and Retirement Advisory Committee (BTRAC) and Broker/Dealer Advisory Committee (BDAC) in an effort to standardize, centralize and reduce the operational burden associated with the information exchange of defined contribution plans that occurs among broker/dealers, asset managers, thirdparty providers and clearing providers.


“We are very pleased to join DTCC in leading an initiative that will help transform the current industry practices for sharing retirement information among plan sponsors and administrators,” said Michael Ward, Executive Director, Morgan Stanley Smith Barney. “We remain committed to advancing the funds industry and are confident that wider adoption of these new standards will continue to progress.”


In two phases


During the initial phase of the project, DTCC is enhancing its Networking service and its Profile Security Issue database. The current Networking service will be leveraged to create additional files specifically for communicating information such as fee payments, plan-level information and compensation between third-party providers and broker/dealers.


For the Profile Security Issue Database, which contains comprehensive fund prospectus and operational rules data as well as sales charges, finder’s fees and expense ratio data, DTCC will add new fields specifically designed to address the industry’s compliance with ERISA, Section 408(b)(2). With these enhancements, DTCC will be able to capture the necessary data located in the related source documents and autopopulate new fields in the Profile database to help its users comply with the new ERISA requirements.


The second phase of the project, targeted for later in 2013, will address the exchange of information among broker/dealers, trust companies, clearing firms and the fund companies with which they do business.


Learn more


A webcast outlining DTCC’s Retirement Industry Information Sharing initiative is available on www.dtcc.com. For more information about the initiative and the webcast, please contact Wealth Management Services at 212.855.8877.@


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