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New retirement plan fee disclosures coming in 2012

December 9, 2011
By Jim Fisher
As 2012 approaches, businesses must be aware of two new regulatory changes by the U.S. Labor Department pertaining to employer-sponsored retirement plans.   
Effective Jan. 1
The first rule, referred to as 404(a), concerns fee and expense disclosures to plan participants. This new regulation is intended to help participants better understand the fees they pay on investments and transactions in an employer-sponsored retirement plan. 
A recent survey AARP showed that seven of 10 participants didn’t think they paid any expenses in their retirement plans. In most cases, the plan service providers will be including this information in the participants’ quarterly statements.  
Plan sponsors and trustees will be fielding many new questions regarding plan fees and expenses from their plan participants and need to be ready.  
Effective April 1
The second rule, referred to as 408(b)2, has to do with required disclosures from plan service providers to plan sponsors and trustees on their services, compensation and fiduciary status. 
The new fee and service disclosures will serve to heighten the level of responsibility that plan fiduciaries have to determine whether they are receiving the appropriate level of service for the costs that are incurred.
This new regulation will fully disclose all costs for their retirement plans.  Dealers will need to be aware of what to look for on these new statements. 
The author is a financial advisor for GCG Financial Inc., a CATA allied member.