Beginning July 1, 2012, 401(k) Plan Fiduciaries (employers) will start to receive newly mandated disclosures of fees for investments and the administrative costs associated with managing a company’s employees’ savings plans.
Employers then have to begin showing their plan participants (employees) the newly mandated information no later than August 30, 2012, and each year thereafter. This new ruling mandated by the U.S. Department of Labor’s Employee Benefits Security Administration (EBSA) was implemented to improve the transparency of expenses and fees to workers that participate in a 401(k)-type retirement plan.
A recent AARP survey reported that seven in 10, 401(k) plan participants were not aware that they pay fees to their 401(k) plan provider for managing their plan and when told of these fees -six in 10 participants were not aware of the amount they pay in fees to maintain their account. The survey was conducted from December 14 through December 30, 2010 by Woelfel Research, Inc. of Dunn Loring, Virginia for the AARP, among an RDD sample of 803 U.S. residents ages 25 and over living in telephone households who were 401(k) plan participants. The full study can be viewed at https://www.aarp.org/work/retirement-planning/info-02-2011/401k-fees-awareness-11.html