MINNEAPOLIS--(BUSINESS WIRE)--

New disclosure requirements by the U.S. Department of Labor (DOL) have pulled back the curtain on fees paid to service providers by retirement plans.

The level of detail in these disclosures is giving many retirement plans a Wizard of Oz moment similar to Dorothys dog pulling back the Wizards curtain to reveal some surprising truths, said Dan Esch Managing Director of DCAdvisors, a Minneapolis-based retirement plan consulting firm.

What plan sponsors and their retirement committees do with these new insights will be carefully watched by the DOL. An inadequate response could lead to financial penalties or even threaten the qualified status of the retirement plan itself.

In a white paper entitled New Disclosure Requirements Pull Back the Curtain on Retirement Plan Fees, DCAdvisors argues the new service provider fee disclosures give retirement plans a valuable tool to match fee structure and service provider relationships to industry best practices while benchmarking fees to determine reasonableness. The paper also describes a methodical five-step approach retirement plan committees can follow and mitigate fiduciary risk:

Under DOL Reg 408(b)(2) service providers, including investment managers, recordkeepers, advisors, trustees and consultants are required to disclose an unprecedented level of detail in what they charge directly as well as indirect revenue received from revenue sharing arrangements.

The stakes are huge. An estimated sixty million workers and retirees hold retirement savings across more than 460,000 employer sponsored 401(k) plans with approximately $3.4 trillion in assets. At the same time, the U.S. Government Accountability Office (GAO) has determined that more than half of all 401(k) plan sponsors were either unaware or misinformed about the fees they or their plan participants were paying on this massive asset pool.

About DCAdvisors:

Since inception in 1994, DCAdvisors has focused on the retirement plan industry. Acting as a fiduciary partner to plan sponsors and retirement committees, we provide strategic advice and expertise related to plan design, investment selection, and plan governance.

To find out more, please visit http://www.DCAdvisors.com

The rest is here:
Retirement Plans Respond to Their “Wizard of Oz” Moment as New Disclosure Requirement Pulls Back the Curtain on Fees