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401(k) Fee Disclosure: Investment-Related Information

Basic investment-related information must be automatically disclosed on or before the date on which a participant or beneficiary can first direct investments and annually thereafter. Some supplemental information must be provided upon request, such as copies of prospectuses or financial reports and lists of assets in the portfolio.

The investment information must be presented in a format for easy comparison among alternatives. The Department of Labor designed a model notice for comparison that is part of the final regulations.

Investment information to be automatically disclosed includes the following: 

  1. Name and category of investment (e.g. mutual fund, index fund);
  2. Reference to an Internet web site with supplemental information, such as strategies and risks of the investment;
  3. Performance data for each investment alternative after fees have been subtracted and reference to an appropriate market index that can be used as a benchmark;
  4. For investments with a fixed rate of return, the contracted interest rate and the term of the investment, or in cases where the issuer reserves the right to adjust the future rate of return, the current rate of return, the minimum guaranteed rate of return if any, and a statement advising that the issuer may adjust the future rate of return;
  5. Amount and description of each shareholder fee, such as sales fees, surrender charges, exchange fees which are not included in the annual operating expenses of the investment and any restrictions or limits that may apply to the investment;
  6. Total annual operating expenses of the investment expressed as a percent of assets. Operating expenses include investment management fees and may also include administrative and recordkeeping fees if these are not reported separately;
  7. Total annual operating expenses of the investment expressed as dollars per $1000 invested;
  8. A statement that fees and expenses are only one factor to consider when choosing investments;
  9. A statement that the cumulative effect of fees and expenses can substantially reduce the growth of a retirement account and that the Employee Benefit Security Administration’s Web site has examples;
  10. Required information must also be given in a chart or similar format to enable comparisons of investment alternatives. The chart should include a statement that additional information is available on a given Internet web site and that paper copies of the Internet information can be requested free of charge.   

If the ownership of any investment shares gives the employee the right to vote at shareholder meetings, participants must receive any information about these rights that has been given to the plan.

Investment information to be provided upon request includes copies of prospectuses, financial statements or reports, list of assets in the portfolio, and a statement of the value of a share for each designated investment and the date of valuation.

Read about the disclosure of plan-related information.

Go back to the summary of the 401(k) fee disclosure regulation.

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