Stephanie Avakian, Co-Director of the Securities and Exchange Commission's Division of Enforcement, outlined the Commission’s examination of the administration of teacher retirement plans at a recent conference in London.
Addressing the 2019 “SEC Regulation Outside the United States” conference on Nov. 5, Avakian discussed the efforts the SEC announced this year and is pursuing. She told attendees that the administration of teacher retirement plans “is another area where there may be undisclosed conflicts of interest, particularly in the area of fees and lower fee alternatives.”
“Broadly speaking, we are looking at the compensation and sales practices of third-party administrators of teacher retirement plans – often known as 403(b) plans – as well as the practices of their affiliated advisers and broker dealers,” said Avakian. “Among other things, we are digging into how administrators and their affiliates choose and recommend investment options, how they are compensated – including whether they receive compensation for referring retirement plans to certain vendors or service providers – and how they deal with conflicts of interest,” she continued.
Avakian said that the SEC is “focused on whether there are any material conflicts of interest that are not fully and fairly disclosed. These investors should have the information they need to make a fully-informed investment decision.”
On June 3, the SEC announced its Teachers’ Initiative and the Military Service Members’ Initiative, which it said would build on its past efforts and “focus additional enforcement and investor education resources on behalf of teachers, veterans, and active duty military personnel stationed domestically and abroad.”
And in October, the SEC announced that it was undertaking several teacher investment outreach efforts as part of the Teachers Initiative, including the launch of a podcast series for public school educators, nationwide events for teachers and regional efforts in California.
