By Susan Reynolds, QPA, QKA, FLMI
Developing and managing retirement plans for your employees can be complicated, especially when new regulations are added to the legal mix. For example, beginning later this year, sponsors of 401(k) plans will be required to comply with new fee disclosure regulations. This could increase the number and/or breadth of fee disclosures typically provided to 401(k) participants.
The regulations are intended to make it easier for both plan sponsors and participants to understand what costs they pay for their 401(k) plan, since providers may price their plans differently. Credit unions will be responsible for ensuring that participation fee disclosures are furnished in a timely and accurate manner. And, while the regulation doesn’t change the cost of a credit union’s plan, it may change the format in which a credit union must communicate the plan’s fees to participants.
Fee disclosures must be made in writing initially, before an employee begins participating, and then annually. Additionally, the new regulations require quarterly disclosures of such information as:
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Explanation of fees that may be charged to or deducted from a participant’s account based upon the participant’s actions, such as distribution fees, loan fees, investment advice and plan management fees.
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Actual dollar amount for what was charged for the above during the preceding quarter.
All those participating and/or eligible to participate in a plan, including employees who do not have an account balance, must receive some or all of the required disclosures. This may also include retirees, former employees and beneficiaries.
A quality retirement provider can help ensure your credit union complies with this new fee disclosure legislation and other retirement plan requirements.
Susan Reynolds, QPA, QKA, FLMI, is the senior retirement markets advisor for CUNA Mutual Group, Madison, Wis.
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