New 401k Fee Disclosure Rules Released
LINDA WERTHEIMER, host:
NPR's business news starts with new rules for nest eggs.
(Soundbite of music)
WERTHEIMER: Americans will soon have more information about their retirement investments.
NPR's Wendy Kaufman has the details.
WENDY KAUFMAN: About 72 million Americans have 401(k) plans. And new rules announced yesterday by the Labor Department are designed to make it easier for them to compare investment options. Beginning in January 2012, employers will have to lay out administrative expenses and other charges that can be imposed on their retirement accounts. The disclosures are designed to be user-friendly.
Ms. KAREN FRIEDMAN (Policy Director, Pension Rights Center): It's extremely important for consumers to compare and contrast the different fees that they're paying under 401K plans.
KAUFMAN: Karen Friedman is with the Pension Rights Center. She says oftentimes, consumers aren't even aware that fees exist for things like accounting and investment services.
Ms. FRIEDMAN: And what a lot of workers and retirees don't know is that high fees can really eat away their balance, and for millions of people, their 401(k) plan is going to be their only supplement to Social Security.
KAUFMAN: In addition to information about fees, the new rules will require disclosures about the performance of various mutual funds that are offered as investments. Individuals will see one-year, five and 10-year investment results, along with benchmark numbers, so they can assess a fund's performance.
Wendy Kaufman, NPR News.