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Disclosure of Fees and Other Information to 401(k) Participants

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The 401(k) Fair Disclosure for Retirement Security Act of 2009 (H.R. 1984) would require that those 401(k) plans that give participants control over their investments, provide them with a yearly statement including itemized information about the fees charged to their 401(k) accounts and other information about their investments.

The statement would have to include:

  • Total fees assessed to the participant’s account during the preceding plan year.
  • The percentage of assets that fees represent.
  • Service fees charged for each investment option during the preceding year, including
    • Investment management fees and trading costs
    • Load fees, insurance contract and other purchase costs
    • Recordkeeping and other administrative expenses
    • Loan and other participant transaction fees
Other information that would have to be included in the statement would be:
  • The total investment earnings “net” of fees for the preceding year for all of the participant’s 401(k) investments, both as a dollar amount and as a percentage of assets.
  • A comparison of the performance of the investment options selected by the participant during the year compared to a nationally recognized market-based index.
  • Information about the amounts accumulated in the participant’s 401(k) account, including starting balance, earnings, ending balance, vesting status and how assets were allocated among stocks, bonds and other investments.
Employees would also have the right to request a copy of the disclosure statement that the mutual fund company, insurance company or other firm providing 401(k) services provided to the plan administrator before the firm was hired detailing the fees that the firm charges the plan, and any conflicts of interest.
Read Section 2 of the 401(k) Fair Disclosure for Retirement Security Act of 2009 (H.R. 1984).
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