Excessive fees hurt plan performance more than any other factor.

“It’s a very common misconception that plan participants have, that the plan is free to them, that the company is covering the complete cost,” says Marylou Bontempo, an investment analystwith CBIZ Retirement Plan Services.Employees may be in for a rude awakening come January 2012 when new Department of Labor participant fee disclosure rules come into effect. The new regulations require fees and expenses that plan participants pay to be disclosed in a clear, easy-to-understand way. They’re a complement to new plan sponsor disclosure rules, which require vendors to do a better job of how they’re disclosing the fees and expenses they’re charging the plan. The participant fee disclosure rules are to come into effect for plan years beginning after Oct. 14, 2011. Since the majority of plans run on a calendar year, this means they’ll have to be compliant by Jan. 1, 2012.

Under the new rules, fees and expenses will have to be spelled out more clearly to employees.

Many companies sponsor a qualified retirement plan for their employees. The new fee disclosure regulations will spell out how much of the fees the company is paying and how much the employee is paying. An analysis prior to the deadline, April 2012, might cushion the shock.

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