Have you read the expense information that the administrator of your 401(k) retirement savings plan sent you in the last month?
If it's sitting unopened on your desk -- or worse yet -- you threw it in the trash, Phyllis Borzi, assistant secretary of labor, is concerned.
"I can't stress enough how important it is to open the envelope," Borzi says.
"I'm really concerned that this information won't be used or even recognized as something important," she added. "I've been in this business for almost 40 years and, when ERISA (Employee Retirement Income Security Act) was passed, most people who had retirement plans had traditional defined benefit plans. In those days, experts made all the retirement planning financial decisions for companies and for employees. But the world has moved away from this, and today, most people have defined contribution plans. Now the responsibility for retirement security rests with each individual investor."
Borzi says the Department of Labor is getting a lot of the same questions about the new law that gives workers access for the first time to vital information about how much each saver is being charged for the investments and the management of their 401(k) plans.
Here are the answers to the questions that are asked most often:
Is the information going only to 401(k) participants? No, general information about expenses and charts that show the cost of each investment opportunity a company plan offers is being sent to every employee who is eligible to participate -- whether they currently do or don't.
Does the DOL review these statements for accuracy? No. Roughly 72 million Americans are covered by 401(k)-type retirement plans. "We can't review them all," Borzi says. "But the plan sponsor does have a legal obligation to provide accurate information." If you have concerns about the accuracy of the report you receive, you can call the DOL's Employee Benefits Security Administration, which has offices around the country.
Can I get the disclosure electronically? Plan sponsors are obligated to make the report available in print format, but if you prefer to get yours electronically, most sponsors are happy to comply and are permitted to send it to you at either your work email or to a private email address. Check with your company's human resources department.
Will people with defined benefit -- old-fashioned -- pensions or individual retirement accounts, or IRAs, get something similar? No. But Borzi thinks that once retirement plan providers get used to providing this information, they may decide that it is worthwhile to expand distribution to people with other forms of retirement plans, including plans that serve public employees.