CMG: Prepare for Misunderstandings About New Retirement Plan Fee Disclosures

Receiving more prominent, detailed information about retirement plan fees—as required by new U.S. Department of Labor (DOL) regulations—will likely raise questions among plan participants in the near future.

Even if your credit union and/or your retirement plan provider had been communicating with plan participants in advance of this change, be ready to answer questions once the fee information is actually published.

The effective date is August 30, 2012, for providing initial disclosures to participants in calendar-year plans or plan years that started November 1, 2011. For plan years with an October 1, 2012, effective date, the deadline for the initial disclosure is February 28, 2013.

Learn more about the DOL’s new regulations, the compliance timeline, and how to communicate with plan participants about the changes with these resources:

Fees aren’t new, and they pay for valuable services.

Although some plan providers have been making fee information available for years, the new requirements for disclosures will inevitably bring plan fees to many participants’ attention for the first time. And, understandably, employees may believe the fees are new or higher.

Beyond explaining that the fees aren’t new, it will be important to help participants understand the value they’re getting in return for the fees. Points to emphasize include:

  • Fees are standard in the retirement plan and investment industries. They pay for a retirement plan’s administrative expenses and infrastructure. For example, for a plan provider, fees help pay to create and maintain Web services that allow participants to get up-to-date data about their plans, research plan options, make changes, etc. Plan providers must also track and adjust to new laws and regulations, and continually assess the performance and compliance of investment funds.
  • Participant fees are not the total cost of providing and maintaining retirement plans. Give participants a breakdown of which fees participants pay and which are paid by the credit union. In fact, this may be a good time to remind employees about the total cost of their benefits.
  • Some fees apply to all participants in a plan, but some are for specific services such as the processing fee for withdrawals.
  • Regarding the fees for individual investment funds: Higher fees aren’t always a worse option. Some funds make the most sense for an investor’s specific circumstances even if the fees are higher than those for other options.


Strategic Link is the NWCUA’s wholly-owned service corporation, providing the Association’s member credit unions with exclusive high-quality, competitively-priced products and discounted services. Questions? Contact Sales & Marketing Associate Craig Reed: 206.340.4789,

Posted in Business Solutions, Marketing & Communications, NCUA.