Retirement Plans Aren’t Free

Retirement Plans Aren’t Free

In a 2007 AARP survey, approximately 65% of those surveyed believed that they were not paying any fees for their retirement plans and 83% acknowledged that they didn’t know how much they were paying.

Here are some thoughts and reminders related to dealing with your company’s employee benefit plans:

  • As a reminder, effective January 1, 2012, plan service providers are required to disclose in writing to plan sponsors the direct and indirect fees greater than $1,000 that are being charged to a plan.
  • Effective April 1, 2012, plan sponsors will be required to communicate quarterly to plan participants fees that are being charged to them. The first quarterly report will be due to the participant by May 31, 2012 and thereafter, will be due within 45 days of the end of the quarter.
  • Currently, certain investment fees, administrative and other fees have been offset to net investment income as part of the return on investment and are not readily determinable.

As a result of the above, it is a best practice disclosure in employee benefit plan financial statements to disclose that certain investment related fees have been offset with net investment income. Plans could consider the following example disclosure: “Certain investment related fees have been reflected as an offset to net investment income and are not readily determinable.” Plans are encouraged to institute processes to deal with these new developments.

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If you need more information regarding this or any other topic affecting your retirement plan, fill in the form below to arrange a free consultation today.


The information contained herein is not necessarily all inclusive, does not constitute legal or any other advice, and should not be relied upon without first consulting with appropriate qualified professionals for your plan’s individual facts and circumstances.

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