New Fee Disclosure Rules Help Make Costs More Transparent

   Ask most retirement plan participants how much they pay to participate in their workplace plan, and the answer till probably be, “Nothing.”

   But your retirement plan isn’t really free.  While employees typically aren’t charged any out-of-pocket costs to participate in their plans, participants do pay expenses, many of which are difficult to find and even more difficult to calculate.  New regulations from the Department of Labor (DOL), which oversees qualified workplace retirement plans, should make it easier for participants to locate and comprehend how much they are paying for the services and benefits they receive.

   The regulations took effect for plan years beginning on or after November 1, 2011, so most participants should start receiving the new information, probably with their 2011 year-end statements.  The DOL will now require your employer and any other provider to the plan (such as the plan’s financial advisor and recordkeeper) to ensure the distribution of the following information to you:

   1.      Investment-related information, including information on each investment’s performance, expense ratios, and fees charged directly to participant accounts.  These fees and expenses are typically deducted from your investment returns before the returns (loss or gain) are posted to your account. Previously, they were not itemi ...