Given its age, you'd expect ERISA to be buying a sports car, trying on hipster clothes and generally just trying to recapture the vigor of its youth. While it's unlikely that the now 40-year-old Employee Retirement Income Security Act will be going bungee-jumping any time soon, ERISA is indeed suffering a bit of a mid-life crisis.

The primary method by which ERISA provides disclosure on 401(k) and other retirement plans is a form called the 5500. As a purveyor of 5500-based market intelligence, I can tell you that ERISA has recently experienced a loss of identity and purpose. Although one of the initial goals of ERISA was to provide plan participants with a window into how their money is being spent, the new "Short Form" 5500 has had the opposite effect. 

The Short Form was introduced in 2009 with the intent of providing a simpler, less burdensome filing for small plans. At only three pages long, the Short Form is an incredibly condensed version of the longer "full" 5500. To go from 20 pages (or more) to three requires a lot of chopping, and one of the items that didn't make the cut was the disclosure section detailing the relationships between the plan and its various providers and vendors. As a result, it is often not possible to see how much of the participant's money is being routed to third-party administrators, brokers or consultants, nor for outside observers to get an idea of a plan's overall cost. 

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