US Department of Labor enacts new regulations on Fees
The United States Department of Labor (DOL) is implementing two new regulations regarding fees and fee transparency for retirement plans this year. Each regulation has a simple and important objective.
Why do you think the DOL enacted these new regulations regarding 401k Fees?
The purpose of the first regulation is to create a clear and consistent process to ensure that plan sponsors know and understand the fees being assessed to manage their company-provided retirement plans [408(b)(2)].
The purpose of the second regulation is to ensure that plan participants are provided with all of the costs associated with participating in their company-provided retirement plan before and while they participate [404(a)(5)].
Why do you think it was even necessary for the DOL to address this?
A documentary done by Bloomberg TV reveals stunning truths that expose more alarming facts. This report, done 3 years ago, caused outrage among plan participants. It has taken the DOL this long to enact the new regulations. The regulations were supposed to mandate that the plan providers become compliant sooner rather than later. Plan Providers now have until August 30, 2012 to issue these fee disclosure statements.
It’s not the DOLs fault, Plan Providers are screaming they don’t have enough time to even find out fees are, much less disclose them. Hidden fees are the issue. One legal team uncovered hidden fees to the tune of over 12%!
Watch these 3 short video clips from the financial news service Bloomberg and decide for yourself. Three part series reveals stunning costs that drastically affect your 401k. When hard times hit, large companies stopped matching contributions. That's when the fees started revealing themselves!
Three part series on "The Truth Behind Hidden 401k Fees"