Big news! The new fee disclosure regulations, known as Section 408(b)(2), have been pushed back to July 1, 2012, as reported in the final ruling by the Department of Labor yesterday.
What’s this mean to you and me? Transparency.
In plain English, these regulations are meant to help all of us know exactly how much we’re paying for a 401(k). In recent years, the DOL has been installing some checks and balances for those in charge of our retirement. From Enron to the recent economic state, it’s become clear that there are too many hands in the cookie jar. No wonder there’s a looming retirement crisis!
The changes due in July should bring about an awareness in 401(k)s that we’ve never seen before. The 401(k) industry will become fully transparent. If you have a 401(k) plan, you will start receiving comprehensive information about who’s running your plan and the cost that goes into those services. You’d think that would’ve been happening all along, right?
Don’t expect these changes to impact you too soon, though. There have already been quite a few stalls. These regulations were initially supposed to roll out in the fall of last year but were pushed back to spring – and now, summer. That said, we should see our first disclosures around August 30, 2012, hopefully on our 401(k) statements. There may be other disclosures that are released, but who reads any of the fine print related to their 401(k) – other than their statements from time to time? If you’ve got a good provider, they’ll be so open you won’t miss it!
This is a clear indication that there’s never been a better time to have a 401(k). An entire industry that has built its wealth on back-end fees is now changing to inform and protect their clients. The DOL have done us a big favor, so let’s say thanks and help ourselves for the future!