The Department of Labor finally implemented the Employee Retirement Income Security Act 408(b)(2) regulation on July 1 after multiple fits and starts. The overriding intent is noble - defined benefit and defined contribution pension plan providers are now required to disclose the internal costs and fees of operating 401(k) retirement plans. With this "full disclosure," a self-correction of plan pricing may occur. As fees are now clearly stated, fiduciaries and plan sponsors will compare apples to apples, and, I believe, shop for a less expensive plan. As a result, higher-cost plans will be replaced with lower-cost plans.

Whilst 408(b)(2) doesn't specifically require plan sponsors to replace their plans with the lowest fee service plans, the lure of saving money will certainly attract a greater market share. One of the unintended consequences and repercussions, which may not become evident for a few years but could have a dramatic and negative impact on 401(k) participants, is that these lower cost plans may compromise the level of service provided. As plans compete on price, services may take a backseat.

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