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Legislation & Regulation

Fee Disclosure Regulations

Retirement plan fees can be complicated to understand. With the passing of new legislation around fee disclosure in recent years, plan sponsors are dealing with tough questions. By working together with your financial professional and using the resources on this page - you can gain a better understanding on what you're paying in retirement plan fees and how they may measure up based on the services provided.

The Department of Labor (DOL) has released both final 408(b)(2) plan sponsor fee disclosure regulations and 404(a) participant disclosure regulations. These were both effective in 2012 and state:

  • Covered service providers, including financial professionals and third party administrators (TPAs) who work with retirement plans, now need to disclose to plan sponsor clients the fees they receive and the services they provide.
  • Plan fiduciaries must now disclose certain plan, fee and investment-related information to participants and beneficiaries in participant-directed defined contribution plans that are subject to ERISA, such as 401(k) and 403(b) plans.

Plan sponsor resources

The DOL regulations around fee disclosure for plan sponsors/fiduciaries and plan participants provide a new framework for disclosing fees related to retirement plans.

It's important for plan sponsors (and participants) to understand the value they are receiving from their or the employer's retirement plans. This includes plan fiduciaries reviewing the overall value of the services provided to assess whether the fees being paid are reasonable. The Principal provides a variety of resources that can help plan sponsors evaluate plan services and fees and communicate benefits to participants.

The following resources, along with your financial professional, can help you educate yourself and plan participants:

  • The Retirement Plan Value Hub helps plan sponsors review at-a-glance services available and used by the plan.
  • The Fee Reasonableness Review Checklist (PDF: 141 KB) is a sample template that helps guide plan fiduciaries through the evaluation process.

    Consider three variables when determining whether what you are paying is reasonable:
    1. What is being paid? It's up to the plan fiduciary to understand all the fee components - both direct and indirect - being paid for the retirement plan.
    2. What is being received in return? The plan fiduciary should also understand the breadth and depth of the services being received for the fees paid.
    3. What is the assessed value? The plan fiduciary should aim to strike a balance between overall cost and the services rendered through the plan.
  • The 408(b)(2) Disclosure Checklist (PDF: 103 KB) can help plan fiduciaries evaluate the reasonableness of fees related to the operation and management of a retirement plan.
  • The ERISA 404(a) Participant Disclosure Regulation Resource Center assists plan sponsors in complying with the new participant disclosure regulation and communicating changes to participants about the plan and fee information.
  • The Understanding Retirement Plan Fees Brochure (PDF: 225 KB) is available for plan sponsors to help educate participants on the fees associated with the company retirement plan.

Questions about fees?

If you have questions about retirement plan fees or fee disclosure regulations, please contact your financial professional, third-party administrator (TPA) or local representative from The Principal.



Prepare for questions from participants - get helpful tips from finance journalist Jean Chatzky*.

Have a question? Call us at 1.800.986.3343

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