Your employees probably cherish the 401(k) plans you’ve set up for them, but they won’t love the hidden fees—up to 17 of them in some of these plans. Last year, the U.S. Department of Labor said all fees must be disclosed and issued a new set of guidelines for plan providers that take effect next year. Employers now must issue quarterly statements detailing all fees and expenses deducted from employees’ accounts in an easier-to-understand format.
Most employees don’t know about these fees, says Geoffrey Frazier, president of Global Financial Private Capital in Sarasota. Some employers are also in the dark about the extra legal and administrative costs in 401(k)s, but the consequences of not knowing can be harsh. The new rule is already leading to class action lawsuits against employers across the nation. Employers who do not comply with the new regulations may be personally named in lawsuits, says Frazier, who adds that Global Financial is preparing its clients for the change at xraymy401k.com.
It is essential that employers understand the new regulations before it is too late. The DOL offers a Fiduciary Education Campaign—the 401(k) Plan Fee Disclosure Tool will be especially useful. Frazier also advises that some employers consult a qualified ERISA (Employee Retirement Income Security Act) attorney to study their current plan and highlight any issues raised by the new legislation.) to help employers comply with the new legislation as cost effectively as possible
You can read the entire amendment on the Department of Labor’s website.
Rank of North Port/Sarasota/Bradenton when measuring personal income growth in 2010 among nation's 366 metro areas.
Source: U.S. Bureau of Economic Analysis
“Anybody who gets money from the government is going to get less. Anyone who pays taxes will pay more. If we do that together, the changes will be modest. It’s like getting that cavity filled. You know it’s got to happen, so get it over with.”
—Biz(941) interview about the national debt with economist Donald Grimes, University of Michigan