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updated July 2012
The U.S. Department of Labor’s (DOL) 401(k) fee disclosure rules take effect in 2012. It's time for benefits and HR managers to start communicating with employees about embedded 401(k) fees, advised Jennifer Benz, founder and chief strategist of
Benz Communications, an HR and benefits communications firm.
According to a 2011 AARP study, 71 percent of Americans with a 401(k) don’t think they pay any fees.
“That means fees—no matter how well negotiated and low they are—will be a shock to most employees. Start communicating about the fees now so they don’t diminish the value of your 401(k) plan,” said Benz.
2012 Disclosure Deadlines
Final regulations released by the DOL in February 2012 identified three disclosure deadlines (assuming a plan year beginning Jan. 1):
“While these may seem like just another set of legal notices, at stake are employee engagement, the perception of your 401(k) plan and, most importantly, employees’ long-term financial security,” said Benz.
“At a time when few people are saving enough for their futures, don't let 401(k) fees be a confusing factor that discourages employees from participating in their plan.” She offered the following to-do list:
Once a strategy is set,
“it will be much simpler to decide how to pace your messages leading up to the initial announcement and through the open enrollment season in advance of the initial quarterly disclosure,” Benz concluded.
is an online editor/manager for SHRM.
ERISA Service Provider Disclosures: What Plan Sponsors Need to Do Now, Drinker Biddle & Reath LLP, July 2012
SHRM Online Retirement Plans Resource Page
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