408(b)(2) Notices Have Been Delivered, Now What?

BALTIMORE, July 10, 2012 /PRNewswire/ -- Fee disclosure is upon us. The 408(b)(2) deadline of July 1, 2012 has passed. Now what should plan sponsors and their advisors do? "Employer's should have their providers' fee disclosure in hand, now they need to determine if the fees that have been disclosed are reasonable," says David W. Huntley, co-publisher of the 401k Averages Book.

According to the 401k Averages Book the average total plan cost for a small plan with 100 participants is 1.30%. If your plan is larger and has 1,000 participants, average total plan costs are 1.08%. The range in fees employers pay can be significant also. The difference between the high and low total plan costs for the 100 participant plan is .36% to 1.71%, while the range for the 1,000 participant plan is .30% to 1.55%.

"Determining whether a plan's fees are 'reasonable' is an important step in the fiduciary process. Thankfully provider fee disclosure notices have made the fee comparison process easier for employers and their advisors," says Joseph W. Valletta, co-publisher of the 401k Averages Book.

Employers Need To Be Prepared To Answer Participant Questions

Another reason why it's important employers benchmark 401(k) fees is ERISA Section 404(a)(5). "Participant fee disclosures are being mailed out and the first question participants will ask their employer upon receipt is, 'How do our 401(k) plan fees compare?' If you haven't benchmarked your plan fees you can't answer that question," says Huntley.

The 401k Averages Book shows investment related fees, which are typically paid by participants, equaled 1.24% for the 100 participant plan and 1.05% for the 1,000 participant plan. Benchmarking plan fees and the long awaited plan sponsor and participant fee disclosures will help both employers and participants better understand their fees. 

About 401k Averages Book

Published since 1995, the 401k Averages Book (www.401ksource.com) is the only resource book available for non-biased, comparative 401k average cost information. It is designed to provide financial professionals and employers with essential 401k cost information needed to determine if their 401k costs are above or below average. The 12th Edition of the 401k Averages Book is available for $95. Advisors may purchase an annual individual Advisor License which allows them to use the data in their client reports.  The 401k Averages Book can be ordered by calling (888) 401-3089 x1 or online at www.401ksource.com.

SOURCE 401k Averages Book

WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?

440k+
Newsrooms &
Influencers

9k+
Digital Media
Outlets

270k+
Journalists
Opted In

GET STARTED