If your company has a self-directed 401K plan, there are new disclosure rules that take effect no later than Aug.30, 2012. The U.S. Department of Labor (DOL) legally requires the plan sponsor to disclose in writing the fees and other “reasonable” nature of the funds selected in the plan. Additionally, specific Employee Retirement Income Security Act (ERISA) language requires plan sponsors to “act solely in the interest of the participants.”
It is not unusual for plan participants to think they do not pay any fees, while in reality, the fees may be significant. Thanks to these new rules, you need to be prepared to explain all of the fees that are charged to your plan. This includes fees that are paid by the employer and fees that are paid through the fund.
As the plan sponsor, you might consider getting a second opinion about the fees that are charged through your 401K plan. Many times, these fees represent an opportunity to save money. Even if there is not cost savings available, as the sponsor you are certainly acting in the best interest of your participants.
If you are not sure how the fees you pay as the plan sponsor compare to others, contact Silverback for help.