Do you really want to know about your 401K fees?

I find many people have not yet heard about this issue so here it is. As part of the new requirement for disclosing information regarding 401K, the Labor Department issued guidance on the rules requiring companies to disclose 401(k) fees to employees. 
This may raise more questions if you happen to work for certain small companies with 401(k) plans.

Under DOL regulations, employers have to provide fee information by August 30 to employees on every “designated investment alternative,” or investment choice they offer in their 401(k) plans.
The requirement became more complicated when the DOL published guidance about complying with the rules when it comes to brokerage windows or self directed brokerage accounts in May. 
Some 401(k) plans offer brokerage windows with other investment choices in their plans, to enable employees to invest in many different investment vehicles, such as mutual funds and individual securities.
Monitoring the investments within these brokerage windows was not the responsibility of employers  according to previous rules, they were only responsible for the investment choices they put in their plans for employees.
Now DOL says that employers would have to monitor and disclose not just fees on the investments they offer within their plans, but also on the investments within their brokerage windows.
It's the first time employers could be held responsible for overseeing the investments within their brokerage windows.

Monday, the DOL made clarification, stating that employers would not be held liable for monitoring and disclosing the fees of all the investments within those windows. If a plan does not have “designated investment alternatives,”, that would “raise questions” about its “fiduciary duties of prudence and loyalty.” in other words are they doing the best they can.
Most mid to large sized 401(k) plans with brokerage windows do offer a number of other investment choices, however many small plans – especially ones with professional employees, such as lawyers or doctors – only offer brokerage windows. These companies may now have to address their plan design or risk getting in trouble with the DOL. 
Hope this makes things a little more clear.

This posting is for educational purposes only and is not meant to be a solicitation to buy or sell any product.