Despite numerous stories and hearings on the topic, new fee disclosure regulations in the 401(k) retirement plan system could cause some angst among plan sponsors and plan participants.
There are two sets of fee disclosure regulations that are expected to be finalized in Spring 2012. One relates to information investment companies provide to their plan sponsor clients and the other is the fee disclosures plan sponsors must give to their plan participants.
“Credibility is critical in today’s world, especially about finances. I think there’s been a loss of confidence and it is very important that everyone know everything about the programs and that there be no mystery,” Wray said. “I think this will enhance the credibility of the 401(k) system and in cases where fees are really out-of-line I think there will be corrective action taken to bring them down.”
Each plan’s fees will be different because it all depends on how much money is in the plan, the average account balance in the plan, the age of the work force and how many moving parts there are, he said. Offering loans and in-service distributions cost money. The more funds you offer your participants, the more fees you will pay.