Final 401(k) Fee Disclosure Regulations

On October 20, 2010, the Department of Labor issued final regulations that require private retirement savings plans, such as 401(k)s, to tell employees how much they are being charged in record-keeping, investment management and other fees. The regulations also include rules for disclosing information about the plan’s investment options. These rules apply only to plans where employees are able to choose their own investments.  The rules were effective December 20, 2010 and will apply to participant directed individual account plans no later than May 31, 2012 for required disclosures other than quarterly disclosures.  Quarterly disclosures must comply with the new rules no later than August 14, 2012.

The regulations are divided into two categories:

1. disclosure of plan-related information
2. disclosure of investment-related information

All information must be provided according to current Department of Labor rules. These rules require that the plan obtain an affirmative consent from employees without ready access to a computer at work before the plan can provide disclosures by e-mail or other electronic means; and that the information disclosed must be presented in a manner that can be easily understood by the average plan participant. 

The regulation includes a statement that the plan fiduciaries are responsible for prudently selecting and monitoring any record-keeping, investment management, or other firms that provide services to the plan.  The plan administrator is responsible for compliance with these disclosure rules.  

Read the Pension Rights Center’s comments on the proposed regulations.

Read the Consumer Federation of America’s comments.

Read a letter sent by Rep. Miller, Rep. Andrews, Sen. Kennedy, Sen Kohl and Sen Harkin.