If your retirement planning includes saving in a 401(k) or other company-sponsored plan, here's some important news that should, in the long run, make it much easier to save enough money to retire.
The U.S. Department of Labor announced today that beginning Jan. 1, 2012, companies providing 401(k) accounts must also provide information about fees and other charges in plain language that retirement savers can understand.
These new rules will affect about 483,000 retirement plans, the DOL estimates, as well as the 72 million workers enrolled in them. The rules require employers who are plan sponsors to:
- Give workers key information about the various investments available under their plans, including the cost of the investments before they sign up for them.
- Present information in a format that makes it relatively easy for workers to comparison shop among the investment options.
- Give workers access to supplemental investment information about each option.
- Provide workers quarterly statements -- in print and online -- of plan fees and expenses deducted from their accounts.
"For the first time, workers will have at their fingertips important and accessible investment-related information to comparison shop among the plan options available to them," said Secretary of Labor Hilda L. Solis in a statement.
The reason this is so important is that if you're not careful, fees, especially in this low-return environment, will eat up your savings. Part of the reason so many people lost so much money in the 2008 meltdown was that they had their money in expensive investments -- many of them sponsored by their employers. After this law takes effect, we'll all be able to make much more informed decisions about how we're using the savings vehicles available to us. That's very good news.