Thursday, July 29, 2010

Department of Labor Adopts New "Interim Final Rule" for Greater Transparency in 401(k) Plan Fees and Pension Plan Fees

Understanding the fees that employee benefit plan vendors receive for their services has become complicated. The Department of Labor has adopted an "interim final rule" intended to result in better disclosure about these fees.

The Department expects benefits from the new rule "would result from reduced time and cost for fiduciaries to obtain compensation information needed to fulfill their fiduciary duties, the discouragement of harmful conflicts of interest, reduced information gaps, improved decision-making by fiduciaries about plan services, enhanced value for plan participants, and increased ability to redress abuses committed by service providers." The Department's fact sheet about the new "interim final rule" is linked below:

A news account ("A Step Toward More Clarity in 401(k) Fees") is linked below:
Of note in the news account is a spot-on quote from David B. Loeper, author of “Stop the Retirement Rip-Off: How to Avoid Hidden Fees and Keep More of Your Money” (Wiley, 2009). Loeper is also the author of "Stop the Investing Rip-Off: How to Avoid Being a Victim and Make More Money" (Wiley, 2009). The latter book covers investments and "investment vendors" generally - i.e., more than just retirement account fees and other costs - and is excellent and recommended.

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