Labor Department Proposes 401(k) Fee Disclosure

July 28, 2008

The Department of Labor on Tuesday proposed requiring 401(k) plan fiduciaries to supply investors with standard account summaries that will clearly state fees, expenses and any administrative costs such as legal, accounting and recordkeeping charges-in actual dollars. Plans will also have to provide performance figures and comparable benchmark returns, information on investment options and how to obtain more detailed information, including education and/or advice. The Labor Department projects the disclosure will result in $6.1 billion in savings for investors between 2009 and 2018, a third of it due to lower fees due to increased transparency. That works out to a savings directly related to fees of $2.1 billion, or $225 million a year.

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