Assessing Retirement Plan Value - 11

1.68%
0.67%
1.27%
27%
2%
7%
%
0.36%
1.68%
1.61%
7%
1.23%
0.21%
1.17%
27%
1.2 %1.61%
1.68%
0.58%
0.87%
1.2 %27%
NUMBER
>MORE THAN A
2.27%0.83% 0.78%
1.27%
0.21%
1.68%
1.27%
0.21%
0.47%
1.68%
1.68% 0.68%
0.87%
1.68%
1.27%
0.58%
1.68%
0.27%
2.27%
07
0.230%8%.58%
0.58%
2.27%
0.27%
WHAT DOES IT MEAN?
UNDERSTANDING
RETIREMENT PLAN COSTS
The Department of Labor (DOL) ERISA 404(a) regulation
requires plan fiduciaries to disclose certain plan, fee and
investment-related information to participants and
beneficiaries in participant-directed defined contribution plans
that are subject to ERISA. The regulation is intended to
ensure that participants in these types of plans have the
information they need to make informed decisions about the
management of their retirement plan accounts and the
investment of their retirement savings.
REVIEWING PLAN SERVICES
NAVIGATING
COST CONSIDERATIONS
EVALUATING
REASONABLENESS
ADDRESSING
PARTICIPANT QUESTIONS
GLOSSARY OF TERMS
How did you decide on the investment line-up that’s provided
in our plan? Are the investment fees competitive?
• Examples of information that may be appropriate to
mention in a response:
• The use of an investment committee and investment policy
statement, and in general the quantitative and qualitative
analysis used in monitoring the investment line-up.
• The use of investment advice or management services to the
plan, such as ERISA Section 3(21) or 3(38) fiduciary services
to help in the selection of the investment line-up.
* Jean Chatzky is a compensated financial commentator, is not affiliated with any
company of the Principal Financial Group and the views she expresses are not
necessarily those of any member company.
PARTICIPANT
REGULATIONS
TOOLS & RESOURCES
> BACK TO HOME
UNDERSTANDING
PLAN FEES
Retirement plan participants have access to more information
than ever with the media focused on economic and financial
matters. Plan fees and retirement readiness are common topics
that can prompt participants to seek information from you. Be
ready to respond and help your participants by thinking through
the following common questions that may be asked, what
response fits your particular retirement plan and share a video
from personal finance journalist Jean Chatzky.*
What fees am I paying in the retirement plan?
How do I know if these fees are fair?
• Examples of information that may be appropriate to
mention in a response:
• The plan’s 404(a) annual fee disclosure notice or other sources
of fee information available such as a participant website or
participant statement. (If you are a client of The Principal®
• The general steps taken by the plan fiduciary or committee to
regularly review services required for the plan, fees for those
services, and reasonableness of the services and fees.
• The value of the retirement plan to the participants, including
participant services available to them.
Am I better off contributing to an Individual Retirement
Account (IRA) instead of in the 401(k) plan?
• Examples of information that may be appropriate to
mention in a response:
• The decision to participate in the plan or an IRA, or both is up to each
individual to decide, balancing both the costs and benefits of each.
• The ability to contribute to an IRA while participating in a 401(k).
The participant should consult a tax advisor about the tax benefits
of participating in either the IRA or 401(k), or both. There are limits
to the amount that a participant may defer into a 401(k) plan or
contribute to an IRA. A participant is not taxed on amounts deferred
into a 401(k) plan. Depending on the participant’s income and
other factors, all or a portion of the contribution to an IRA may be
deductible on the participant’s tax return.
• The services and features available from the 401(k) plan that
the individual can compare to an IRA.
• The opportunity to receive additional contributions in the 401(k)
plan, if an employer matching contribution is provided.
WHAT PARTICIPANTS
NEED TO KNOW
MORE THAN A NUMBER • ADDRESSING PARTICIPANT QUESTIONS | 11
0.78%
0.78%
1.68%
0.58%
0.72%
0.78%
0.58%
1.27%
1.68%
1.27%
1.68%
1.27%
1.68%
1.68% 0.83%
1.68%
2.27%
2.13%
1.68%
0.32%
2.27%
2.13%
2.13%
Addressing Participant Questions
, visit
the ERISA 404(a) Participant Disclosure Regulation Resource
Center for more information, including fee education materials.)
0.27%
RETIREMENT PLAN VALUE
Assessing Retirement Plan Value

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