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Did you get your 401(k) report?

By Jennie L. Phipps ·
Thursday, September 6, 2012
Posted: 5 pm ET

If you have a 401(k) retirement plan at work, Aug. 31 was the deadline for your employer to provide an annual report that lists all of the investments available in the plan, plus its fees and historic performance. If you are putting your money in investments with variable rates of return, the report must include benchmarking information so you can compare how you're doing.

By Nov. 14, your employer has to send a second and more personal notice. This report will detail how much your individual account is being charged in administrative and investment fees. If you have a 401(k) loan, it will explain the costs and requirements associated with it. Going forward, employers will be required to send out these notices quarterly.

These reports are the result of new rules from the U.S. Department of Labor that have been debated since 2006. It has taken this long to iron out the details. These changes could have an impact on your retirement planning. The Labor Department estimated in February that this information would save 401(k) participants 54 million work hours spent uncovering and understanding expense information, valued at nearly $2 billion.

Of course, for this to be the case, you have to actually read and understand these reports. A survey from State Street Global Advisors, released in July, reported that while 36 percent of participants in defined contribution plans haven't been reading the information provided by the plan, some 86 percent said they will read it now that it is being sent to them. Another 61 percent said they didn't understand much about how fees affect their retirement savings.

State Street recommends to its clients that they designate one day a year as "Retirement Day," allocating at least 30 minutes for employees to review and reconsider their 401(k) plans.

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