GAO report finds nearly 4 in 10 people with 401(k) plans are unaware they are paying fees
According to the report, 45 percent of participants are not able to use the information given in disclosures to determine the cost of their investment fee. And more than four in 10 plan participants incorrectly believe that they do not pay any 401(k) plan fees.
The DOL requires 401(k) plans to provide the nearly 85 million plan participants with a comprehensive disclosure of the fees they pay. Chairman Robert C. "Bobby"
"The GAO's findings are a wake-up call for the
The report's findings build on previous GAO reporting that has shown even seemingly small fees can significantly reduce participants' retirement savings over time.
"People making decisions that will affect their financial security for years to come need to have clear, complete, information. This report is a clear warning this simply isn't happening with respect to fees for 401(k) plans, which millions of people are relying on for their financial futures," said Chair Murray. "I look forward to working with my colleagues and the
The GAO makes several recommendations for how DOL can help 401(k) plan participants better understand and use fee information by adding information to disclosure requirements. Specifically, GAO recommends that the DOL:
* Require consistent terms and measure for investment fees in fee disclosures;
* Require participants individualized quarterly statements to show the actual cost of the investment fees;
* Provide educational information about the cumulative effect of fees;
* Require disclosures to include fee benchmarks which would help participants better gauge if their investment costs are competitive; and
* Require disclosures to include investment options' ticker information, which would help participants more easily research and compare their investments.
To read highlights of the report, go to: https://www.gao.gov/products/gao-21-357. To read the full report, go to: https://www.gao.gov/assets/gao-21-357.pdf.
Read this original document at: https://edlabor.house.gov/media/press-releases/scott-murray-new-gao-report-on-401k-fees-is-a-wake-up-call
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