Starting today, new U.S. Department of Labor rules to improve the transparency of fees and investment expenses in retirement plans go into effect. Under the rules, providers must clearly disclose the fees they charge 401(k) plan participantsfor investment management, record keeping, administration, and other services.
The rules impose obligations on plan administrators and service providers.
On October 20, 2010, the department published a final rule to help workers manage the money they have contributed to their 401(k) accounts, or similar retirement plan accounts, by requiring the disclosure of information regarding the fees and expenses associated with their plans. This participant-level disclosure rule, under section 404(a) of the Employee Retirement Income Security Act of 1974 (ERISA), also ensures that workers receive core investment information in a format that enables them to meaningfully compare their plan’s investment options.
A second and related fee transparency rule requires, in part, that certain covered service providers furnish specified information to plan administrators so that they in turn can comply with their disclosure obligations to participants. This second rule, published by the department on February 3, 2012, under section 408(b)(2) of ERISA, requires disclosures to employers sponsoring pension and 401(k) plans about the administrative and investment costs associated with providing such plans to their workers.
DOL issued a questions-and-answer document on the new rules in May, and promises to release another one soon.
By: [author-name]
This article was syndicated via RSS from: http://joelustig.wordpress.com/2012/07/01/new-dol-rules-now-in-effect-on-401k-plan-fee-disclosures/
