Are you compliant with new 401(k) Fee Disclosure Rules?

Jennah Purk, CPA, MST

You may have noticed that new rules regarding fee disclosures for retirement plans from the Department of Labor have been in the news recently.  Note that these are not new fees, but the fee disclosure requirement is new.  Two of the new requirements include:

1.       Retirement plan vendors were required to provide plan sponsors with required fee disclosures by July 31, 2012.  This is referred to as the 408(b)2 disclosure.

2.       Plan sponsors are required to provide plan participants required fee disclosure information by August 31, 2012.  This is the 404(a)5 disclosure.

The new rules also impose a requirement that plan sponsors not only fulfill the disclosure requirements but that they now examine the disclosures to ensure they are adequate and determine that the fees charged are reasonable and fair.  Many plan sponsors may not be aware of these additional duties.

Be aware that these new fee disclosure rules are different from fiduciary standards for plan sponsors.  The DOL has prepared a fact sheet on these new requirements you may view here.