DES MOINES, Iowa (AP) — Workers with a 401(k) retirement account will soon know exactly how much they're paying in fees.
The Department of Labor released new rules on Thursday designed to force companies that provide 401(k) plans and services to employers to spell out all the fees charged.
Most people don't know that more than a half a dozen fees may be charged against their 401(k) account for recordkeeping, administration, investment advisory, brokerage and management services.
In addition, at least eight kinds of indirect fees and expenses could be charged. These are often shaved off the top of the account's investment gains.
Any service provider paid more than $1,000 in connection with retirement accounts must provide detailed reports on fees, according to the new rules. That includes brokerage services and recordkeeping companies.
The regulations also will affect major providers and administrators of 401(k) plans including Fidelity Investments, The Vanguard Group, Principal Financial Group and Charles Schwab Corp.
Labor officials will give them a year to plan for the new rules, which have been years in the making. The department first published a notice it intended to make new rules in December 2007. A public hearing was held in 2008.The department will publish the interim regulations Friday in the Federal Register and take comments until Aug. 30. It's specifically seeking comments on the costs service providers will incur by providing a summary statement of fees to companies offering 401(k) plans to workers.