The Secret Your Boss Is Keeping About Your Retirement



Pension-planMany companies have gotten rid of their pension plans and put the responsibility for saving for retirement entirely on employees’ shoulders through 401(k) plans and related options. You’d think they would at least make understanding those plans easy for workers.

But instead, your bosses may be keeping you in the dark about the costs of your retirement plan — and those secrets may stay under wraps for a lot longer than expected.

What’s the Delay?

Earlier this month, the Labor Department said that it might once again push back an April 1 deadline for employers who offer retirement plans for their workers to tell employees about the fees those plans charge.

Apparently, the final versions of the rules have already suffered long delays. And since they are not even scheduled to be published until the end of this month, the government agency believes that plan providers need to have enough time to prepare before complying with the rules.

Finding the Fees in the Legalese

If you want to know how much you’re paying badly enough, you can probably get most of what you need to know now — if you’re willing to jump through big hoops. You can find the numbers that you need to calculate what you’re paying for your 401(k) or other retirement plan at work within the hefty prospectuses, plan documents, and other legalese-filled pages available.

But realistically, few workers have the expertise, time, or inclination to go that far out of their way to get price information that ought to be stated upfront. That’s the purpose of the new rules: to get workers the information they need and have a right to as easily as possible.

Postponing the Big Reveal Once Again

Unfortunately, these rules have already been a long time coming. The soon-to-take effect rule is about 18 months old already, and was due to take effect last July, but the financial industry got it delayed until April. Now, financial providers want another full year to deal with whatever the final rules require.

Which begs the question: How can these providers know they need more time if they haven’t even seen the final rules yet? If the rules are pretty much the same as the currently proposed rules, it should be easy to implement them quickly.

What may end up turning the tide is the fact that 2012 is an election year. At least some lawmakers will want to give workers something tangible before the election. Based on that, you might finally know how much you’re paying for your retirement plan by the end of 2012.

Motley Fool contributor Dan Caplinger has his own retirement plan, so he can’t blame anybody else for its costs. You can follow him on Twitter: @dancaplinger.


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Tagged: 401k, 401k fees, 401kFees, Finance, Labor Department, LaborDepartment, pensions, retirement, retirement planning, retirement savings, RetirementPlanning, RetirementSavings, rules, secret

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