The Daily Item, Sunbury, PA

Entertainment

March 17, 2014

The Color of Money: On 401(k)s, fees really do matter

You may not believe it, but there really are government forces trying to help you become better informed about your workplace retirement plan.

     I wonder if their efforts are in vain.

     The Department of Labor is moving ahead with a proposal for transparency, opening a 90-day comment period to collect opinions on a proposed guide to help employers find fee information in disclosures they get from the investment companies that manage their 401(k)-type retirement plans.

     The department felt it needed to step in because companies were having a hard time locating the required fee information, which often was buried in legalese and multiple documents, said Phyllis C. Borzi, assistant labor secretary for employee benefits security.

     Call the guide a road map, Borzi said during a media conference call. After watching what was being sent, Borzi said the department became "particularly concerned some employers, especially small employers, may not be reaping the full benefit of fee disclosure regulation."

     Like a GPS device calling out turn-by-turn directions, the guide would direct employers to a specific page or section to easily find fee information.

     Why does this matter to you?

     Because your employer has a fiduciary responsibility to act in your best interest regarding your workplace plan. To this end, your employer also has an obligation to watch the fees and expenses and to make sure they are reasonable. Folks, this guide directly affects you. The more your employer understands what you are being charged to invest your retirement funds, the more likely the company  may negotiate a better deal so that your fees come down. And fees matter to what you ultimately end up with in your retirement account.

     I hope you know -- and you would know if you opened your 401(k) statements -- that fee and expense disclosures were mandated two years ago. You are supposed to receive detailed information about the fees you pay.

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