- The Department of Labor issued regulations in 2012 under section 408(b)(2) of ERISA requiring more disclosure from 401(k) service providers to Plan Sponsors (employers).
- Plan Sponsors have received this disclosure from their 401(k) service providers.
- Insurance companies, mutual fund companies, brokers, advisors, record keepers and administrators are now required by law to inform Plan Sponsors of exactly what they charge.
- These charges are often excessive and until now have often been hidden. Further, the services may not align with actual participant (employee) needs.
Why is this so important? ERISA law places a fiduciary standard on Plan Sponsors. Plan Sponsors are required to keep the interests of the participants ahead of all other motives. If the plan fails to benefit employees adequately, or the investment choices are not prudent, or too much is being charged for services, Plan Sponsors would be considered failing to satisfy their fiduciary duty.
Although the new required disclosure is an opportunity for you as a Plan Sponsor to make sure you are fulfilling your fiduciary obligation, many of you require some context in order to interpret this new disclosure information.
- First, click here and use our 401(k) Calculator for a quick check of what your total plan costs could be.
- For more detailed infomation, we offer a FREE analysis of your company’s 401(k) plan.
- Using the disclosures from service providers that you have received, we will provide a report that clearly identifies your company’s current 401(k) expenses, and the industry averages for your plan’s size and type.
- The report will include a comparison of alternative service providers so a you can evaluate how efficient, effective and compliant your plan is.
- The process takes virtually no Plan Sponsor staff time. The results will assist your company to meet its fiduciary obligation and benefit plan participants.
If you would like an objective analysis of the services needed for your 401(k) plan and a comparison of what you are paying for plan services relative to the marketplace, please call Debbie Wise at 847-834-9473 or email us.