Bradford Campbell, counsel in the Washington, D.C., office, was quoted in a Human Resource Executive Online article exploring the affects new 401(k) transparency rules will have on plan sponsors and participants.
Brad, a former secretary of labor for employee benefits, explained the different components that plan sponsors will be required to offer participants in the coming months. These new requirements include a comparative chart, an expense ratio and an overview of the fees participants are paying in the dollars per thousand invested.
"The DOL determined that many participants did not understand expense ratios alone,” he explained, “so these were paired with the dollar illustration in the final regulation."
Brad added that compliance will be made difficult by the different combinations of service and fee arrangements, but pointed out that “the plan administrator needs to understand how their expenses are being paid, whether directly or through the investments themselves.”
Finally, Brad expresses the significance of these new fee disclosure rules. "The concern I have is that there is a group of plan sponsors [who may not be] aware of the seriousness of this obligation,” he says.
To read the full article, click here.