Congress’ nonpartisan Government Accountability Office (GAO) recently revealed that half of U.S. employers didn’t know if they, or their plan participants, paid investment management fees for their 401(k), 403(b), profit-sharing, or other ERISA-covered retirement plans. Well they know now.
The Department of Labor (DOL) has been working on the issue of fee disclosures over the past two years and as of July 1, 2012, retirement plan service providers are now required to clearly disclose the fees they charge retirement savings plans for services like investment management, recordkeeping, administration, and others. Calculating fees can be complex because several companies may be involved in maintaining a plan, resulting in layers of fees that may be paid by the primary plan sponsor (employer) and the plan participants (employees in the plan).
Plan service providers should have already disclosed their fees to employers under the new disclosure rules, and employers were required to share them with their plan participants by August 30. Those that have done so may be fielding a barrage of questions from their employees. However, the real demand for answers may come this fall and many employers may not be prepared to provide answers.
Length: 2 pages (PDF 99 kB)