Are Your U.S Plan Fees Too High? Get Ready for Mandatory Fee Disclosure

Plan fiduciaries have a responsibility to make sure that the plan is not overpaying for services, but until now it has been difficult for them to get the information necessary for them to evaluate and compare fee arrangements. In July, the U.S. Department of Labor issued final regulations requiring mandatory disclosures of fees received by pension plan service providers and their affiliates to the fiduciaries who hire them.

These regulations give fiduciaries leverage and actually require them to obtain detailed information about direct and indirect fees. Although they are not effective until July of next year, the regulations will apply to all pension plans – not just to 401(k) plans – and to all arrangements in existence on the effective date. The increased transparency required by the regulations could potentially lead to lower fees for all U.S. pension plans.