You may have heard that employers finally will be required to give employees detailed information about 401(k) plan fees. You could be disappointed when you see the results.
The new annual disclosure form, which the U.S. Labor Department said employers must provide to workers by Aug. 30, may run more than 15 pages long. But it won't provide a simple figure for your annual cost and some employers may bury the plan's administration costs in with investment expenses. ...
...Other costs will remain hidden, too. For instance, expense ratios don't include trading costs generated when the fund manager buys and sells stocks. These costs can vary widely. Still, they are reflected in a fund's net performance—and funds' past performance is detailed on the disclosure form.
The new disclosures can help workers seeking to improve their plan. "Challenge the benefits department," says David Kudla, chief investment strategist at Mainstay Capital Management, a Grand Blanc, Mich., advisory firm.
Workers might ask, he says, "Why is our average expense ratio this high? What are the revenue-sharing arrangements that I don't know about?"
Employees aren't alone in gaining more information. By July 1, 401(k) service providers must give employers clearer disclosures about who gets paid what relative to the plan. ...