NEW YORK (AP) - Federal disclosure rules that go into effect Sunday will make it easier for workers and retirees to see how much their 401(k) accounts are being docked in fees.
As of July, 401(k) providers must clearly disclose to employers for the first time the fees they charge the retirement savings plans for investment management, record keeping, administration and other services.
Under the new rules, the Department of Labor will require plan providers to disclose detailed 401(k) fee information to employers. The companies must then share that information with their plan participants.
Employers are required to provide information to participants by Aug. 30 showing what fees various investment options in their 401(k) plans entail. But it won't be until fall, when most participants receive their third-quarter account statements, that they will see the exact amount of fees deducted from their accounts.
Fidelity Investments, the nation's largest 401(k) administrator, already has sent out fee disclosure information to about two-thirds of its approximately 12 million accountholders.
Along with employers that sponsor 401(k) plans, many of the nation's 72 million plan participants will likely be surprised by the amount of fees.
A recent survey of employers by Congress' nonpartisan Government Accountability Office found that half did not know if they or their plan participants paid investment management fees, or they wrongly believed that the fees were waived.
Fees can be as high as 1.9 percent of assets annually but average about 1.3 percent for plans with fewer than 100 members, which account for 88 percent of plans, according to the GAO report.
The fees can be complex because several different companies may play roles in administering plans, leading to layers of fees shared among the primary plan provider, the plan sponsor and participants.