The Department of Labor’s new rule that has the potential to lower 401K fees, is a victory for those who’ve fought for more transparency.
Two and a half years after its original proposal, the Department of Labor’s new rule will require various business that provide services to 401K and other retirement plans to make fees they collect more obvious.
“Now these fees, which were many times either indirect or hidden, will have to be brought to light and disclosed, so people will know what they’re paying for,” said Marcia Wagner, who is with Boston-based Wagner Law Group which specializes in employee benefit issues.
She says this kind of transparency will likely lead to more reasonable fees, costing us less and resulting in greater rates of return for our 401K’s.
Don’t underestimate the impact these fees can have. A Department of Labor analysis estimates that a one percentage point difference in fees can cut your retirement income by 28 percent.