The U.S. Departments of the Treasury and Labor are taking steps to make it easier for Americans to effectively save for their retirement.
The Department of Labor's Employee Benefits Security Administration has issued a new final rule governing disclosures for 401(k) plans, which will impact employers in multiple ways when it goes into effect. Service providers will be required to disclose both their direct and indirect compensation and investment expense information.
The agency also announced plans to release a rule mandating that they help plan fiduciaries to locate and organize the information they must disclose. For employers, that may mean less difficulty in understanding their 401(k) plans, and an easier time helping employees get the most out of them. Current laws and regulations require employers to educate 401(k) plan participants about their investment options and help them comparison shop.
Such plans can still be complex, however. Employers attempting to adjust to the new rule and other regulatory changes may find that employee benefits consulting services are helpful in ensuring HR compliance and running programs smoothly.
Service providers are required to be in compliance by July 1. Deadlines for employers to disclose fee and expense information to participants and provide the first monthly statement under the new regulations are August 30 and November 14, respectively.
