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Disclosure
Senate Testimony Recommends Better Disclosure of 401(k) Fees
 

  
In testimony before the U.S. Senate’s Special Committee on Aging this past fall, the U.S. Government Accountability Office (GAO) prescribed ways to improve the disclosure of 401(k) plan fee information to plan participants and sponsors.
 
Among the GAO’s recommendations:
  • At a minimum, participants should be given basic information about each plan fund’s expense ratio, which states operating fees as a percentage of fund assets.
  • Fee information should be presented in plain language and a clear, concise format that allows for easy comparison between funds.
  • Plan sponsors should be offered more information on service providers, investment options and revenue-sharing arrangements so they can better monitor fees and fulfill their fiduciary responsibility to act in the best interest of plan participants.

Fees can take a significant bite out of a 401(k) plan participant’s retirement account over the years. Yet in a recent survey conducted by AARP and cited by the GAO, 83 percent of 401(k) participants said they don’t know how much they are paying in fees within their plan account.

The GAO previously advised Congress and the U.S. Department of Labor (DOL) of the need to improve the understanding of 401(k) fees and their effect on retirement savings. Both Congress and the DOL are currently working to address this need.        

GWM helps plan sponsors evaluate the cost of their qualified retirement plans, and can educate employees about investing for retirement – including the cost of investing. We've also included a link to the complete GAO Report.

            


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