401(k) Fee Disclosure; Develop a Communication Strategy

  • Written by David
  • July 31, 2012 at 7:08 pm
  • 1
  • RE: 404(a)(5) Fee Disclosure for 401(k) Plans; including Self-Directed Brokerage Accounts

    Are you an employer that offers participants the use of a self-directed brokerage account (SDBA) inside of your 401k plan? If so, note that you must disclose those fees to participants via Department of Labor’s ruling on 404(a)(5).

    The first date of disclosure is August 30, 2012. Then the first quarterly disclosures will begin 45 days after end of quarter, no later than November 14, 2012.

    How is your executive management team handling this fee disclosure process?

    Enter Gratke Wealth, LLC and Retirement Plan Advisory Group, Inc.

    We offer educational presentations for both plan sponsors and plan participants regarding these new fee disclosures. We can assist plan sponsors in building a communication strategy for participants to demonstrate the value of the organization’s retirement plan.

    Recent studies show that many participants do not believe 401k plans have fees, or the participants are simply not aware of such fees. Reference our blog posting of May 31, 2012 “401k Hidden Fees? 7 of 10 workers did not know they paid 401k fees”

    Let us help you communicate this sensitive and time critical information to your employees with our educational presentations by reinforcing the value of your retirement plan. Our presentation topics include:

    For plan sponsors:

    • Fiduciary responsibilities
    • Prepare for potential participant inquires

    For plan participants:

    • Present concepts of plan services and administrative and investment costs
    • Provide education regarding plan, and investment, related vocabulary


    The presentations help quell employee fears by answering the most typical questions and concerns around these disclosures:

    • why do these fees exist?
    • what am I paying for?
    • are these fees reasonable?
    • help participants understand what they are reading


    The Department of Labor (DOL) issued an updated (July 30, 2012) field assistance bulletin with 39 FAQ’s to assist plan administrators in the 404(a)(5) disclosure process. That document can be found here.

    Recent media coverage:

    Labor Department clarifies fee disclosure rules on 401(k) retirement plans, Source Reuters July 30, 2012

    “Under Labor Department regulations, employers have to provide fee information by August 30 to employees on every “designated investment alternative,” or investment choice they offer in their 401(k) plans.”

    “But in its May guidance, the Labor Department said employers would have to monitor and disclose not just fees on the investments they offer within their plans, but also on the investments within their brokerage windows.”

    “On Monday, however, the Labor Department clarified its position, stating that employers would not be held liable for monitoring and disclosing the fees of all the investments within those windows.”

    “However, the Labor Department said if a plan does not have “designated investment alternatives,” to avoid having to disclose the fees associated with its offerings, that would “raise questions” about the plan’s “fiduciary duties of prudence and loyalty.”

    “While most mid- to large-sized 401(k) plans with brokerage windows offer a number of other investment choices, many small plans – particularly those with professional employees, such as lawyers or doctors – only offer brokerage windows, experts said. Those firms may now have to rethink their plan design or risk getting in trouble with the Labor Department, they said.”

    At a minimum, this is all confusing at best. Let us help your team ‘unwind’ the confusion for your employees.

    To learn more about Gratke Wealth 401k educational offerings, click this link; www.401kevents.com

    Gratke Wealth.


1 Comment


  1. Gratke Wealth August 3, 2012 Reply

    DOL Backs Off Controversial Brokerage Window Plan


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  • Gratke Wealth, LLC is a registered investment adviser in the State of Oregon. The adviser may not transact business in states where it is not appropriately registered, excluded or exempted from registration. Individualized responses to persons that involve either the effecting of transaction in securities, or the rendering of personalized investment advice for compensation, will not be made without registration or exemption.