November often acts as a transition into many things: the holiday season, end of the year preparations, and winter’s arrival. This November will signal another transition for employees with a 401(k) plan: the transition from ignorance to knowledge. According to a recent AARP survey, 70% of all people aren’t aware that they currently pay fees for their company’s 401(k) plan. This November will change all that when, for the first time, investors will be able to see the amount they paid in fees for the previous quarter.
Many financial experts expect to see some backlash from most investors and even believe the fees will cause many people to withdraw from their 401(k) programs altogether and pursue other investment options.
Prior to the new Department of Labor regulations requiring employers to provide fee information, the only deductions most employees saw were attributed to market loses. The statements this November will contain a much different landscape. Unfortunately, as people transition from ignorance to knowledge, it can take even more time before that knowledge turns to understanding and comprehension. In order to help you with that comprehension, I have set out to answer the most common questions surrounding this fee disclosure and what changes this November will bring for you.