The U.S. Department of Labor has determined that disclosures about 401(k) plan fees required by a 2012 rule frequently occur in lengthy contract documents and are hard to find. And also that fee disclosures often are dispersed in multiple documents, hindering transparency. As a result the department is proposing a rule requiring that 401(k) plan service providers provide a guide, or "roadmap," to those disclosures.
The DOL's news release about the proposed rule is here. As proposed, the rule would provide that "[t]he guide must specifically identify the document, page or other specific locator, such as section, that enables the employer to quickly and easily find fee information."
In a Washington Post column this week about the DOL's proposed rule ("On 401(k)s, plan fees really do matter ...") columnist Michelle Singletary highlighted a DOL example in which a difference in fees of one percent -- 0.5 percent versus 1.5 percent -- reduces the total of an individual's account at retirement by 28 percent.
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