Participant-Directed Individual Account Plans Subject to New Disclosure Requirements

On October 20, 2010, the U.S. Department of Labor finalized regulations requiring enhanced disclosures to plan participants about their plans and the various fees associated with the available investment alternatives. For the past few years, 401(k) plan fees have been a hot-button issue, spawning numerous class-action lawsuits against both employers and service providers. Because of the nature of the investment vehicles made available to plan participants, the fee structure is both complex and opaque. Participants need to know about any fees because they affect the rate of return on plan investments.

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