When the new fee disclosure rules become effective in 2012 plan participants will learn what they are paying for in their retirement plan. An independent analysis of your plan will help determine how and if the plan should pay for administrative fees.
“Direct contribution plans have a lot of moving pieces that can be relatively complex,” Lucas said. “They need to get their arms around these fees. They need to know how they are paying these fees. The plan sponsoralso needs to be able to explain why some are paying fees and some are not.”Other results from the survey show 37.5% of sponsors that credit revenue sharing back to plan participants do not know how this happens. Also, more than 16% of plan sponsors are uncertain if their plan offers an ERISA (expense reimbursement) account.
The survey also found the leading compliance concern among plan sponsors was the lack of clarity on how to comply with the U.S. Department of Labor’s 408(b)2 fee disclosure regulations; however, coming in a strong second was no concerns at all about compliance. Lucas said she is under the impression that plan sponsors who lack concern in this matter are looking to their recordkeepers to ensure compliance
Plan sponsors should be more concerned with the quality of retirement plan they provide for employees. Many rely on their service provider with mixed results often poor.
Please comment or call to discuss how the new regualtions might affect your plan.
- A Closer Look at Fiduciary Status Under ERISA (401kplanadvisors.com)
- Majority of Retirement Plan Sponsors Do Not Feel Prepared for New Fee Disclosure Rules (401kplanadvisors.com)
- Fee disclosure facts every plan sponsor should know (401kplanadvisors.com)