Clarity on Fees Coming Soon

Employers that sponsor 401(k) plans soon will be required to give employees detailed information about plan fees. New regulations from the US Department of Labor require sponsors of 401(k) plans and other participant-directed, defined contribution plans to disclose fee and investment information to all eligible employees, plan participants and beneficiaries. The rules take effect Jan 1, 2012, for calendar year plans. Shoe Carnival, a 4,600-employee apparel retailer based in Evansville, IN, is a prime example. They already disclose the individual investment fees in the original enrollment package. The participant fee disclosure regulations are part of a larger effort by the Labor Department to increase fee transparency. Starting with the 2009 plan year, virtually any fee employer-provided retirement plans pay directly or indirectly to any service provider must be reported on Schedule C of Form 5500. In the end, the broad push for transparency should go a long way toward helping plan fiduciaries meet their obligation to ensure that plan fees are reasonable.