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If you plan to retire on time, you must know and understand the impact of fees on the investment returns in your account.
Plan participants and their beneficiaries are the ultimate recipients of the required service provider fee disclosure regulations under ERISA 408(b)(2).   The law requires that the plan sponsor, and its designated responsible plan fiduciary, act prudently and solely in the interest of plan participants and beneficiaries and for the exclusive purpose of providing benefits and defraying reasonable expenses of administering the plan. This duty is known as the duty of prudence and loyalty under ERISA 404(a)(1).

If your plan fiduciary does not understand the fees being paid and the value of the services provided to your plan, it is possible you are being charged more than necessary as a participant in your plan.

Department of Labor service provider fee disclosure regulations under ERISA 408(b)(2) (effective July 2012), require that certain fee and services information be provided to your plan’s responsible plan fiduciary by the plan’s service provider(s).  The intent of the regulation was to make it easy for your responsible plan fiduciary to determine the fees, the value of the services, and whether they are reasonable and necessary to the operation of your plan.

Similarly, the Department of Labor issued participant fee disclosure regulations under ERISA section 404a-5 (effective August 2012), in which an annual disclosure is required to be distributed to you outlining the various fees which are or may be charged to your account balance in the plan.  Additionally, an updated notice is required 30 days in advance of any changes.  The regulation also requires quarterly statements to report any fees deducted from your account.

If you have questions or concerns about the fees being charged to your account, or the total fees being charged to your plan, seek out your plan’s responsible plan fiduciary.

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