ADP RESOURCE® – The Resource
On and after August 30, 2012, this information must be provided to plan participants on or before the date they can first direct their investments, and then again annually thereafter. The investment-related information must be furnished to participants or beneficiaries in a chart or similar format so that a plan participant can compare the fees associated with each investment option under the plan. The final rule issued by the DOL included a model comparative chart that can be utilized by a plan sponsor to provide the information to plan participants.
Fee Transparency on Participant Statements
The fees that plan participants pay aren’t new; they’ve typically been reflected in a participant’s account balance after the charges have been taken out. The new DOL rules were established in an effort to improve the transparency of fees and expenses associated with 401(k) retirement plans to help ensure that plan participants are given or have access to the information they need to make informed decisions regarding their investments.
The legislation doesn’t change the fees that participants pay – at least not directly. But the new rules are expected to put pressure on 401(k) administrators and service providers to keep their fees and expenses as competitive as possible.
The bottom line is that plan participants should be able to clearly see what they’re paying in fees and make informed decisions about how to invest their retirement savings. Fees should not be the only factor that participants need to consider in their investment allocation, but being fully informed will certainly help them make better decisions.
Clients of ADP Resource® choosing to take advantage of the retirement plan solutions offered through ADP Retirement Services gain access to flexible investment platforms that they can trust to meet their employees’ needs and their fiduciary requirements and which also integrate seamlessly with their ADP payroll.