Complying with the New Department of Labor 401(k) Fee Disclosure Rules
This white paper provides an executive summary of the new regulations under the Sections 408(b)(2) and 404(a)(5) of the Employee Retirement Income Security Act of 1974 (ERISA). The historic changes instituted by the Department of Labor (DOL) were finalized in February 2012 and become effective in July 2012. The new rules are designed to address the DOL’s concern that most 401(k) plan sponsors and participants do not know how much they are paying to their service providers to manage their plan assets. These new regulations will require 401(k) service providers to disclose the nature of their services and the amount of direct and indirect fees they are actually being paid.
Employers who sponsor a 401(k) plan have a fiduciary duty to make sure fees associated with the plan are “reasonable and necessary”. When participants receive these new fee disclosures they may be surprised or angry to learn how much they are paying and will likely have many questions for plan sponsors and their human resource managers. Read Entire White Paper