Full disclosure is on the horizon for 401(k) plans, as new federal rules mandate employees are made aware of the fees associated with each plan beginning next summer. In the meantime, though, employee outrage is heating up, as multiple lawsuits spring up across the country.
In the next several months before the disclosure laws are enacted, employees should focus on asking the right questions and identifying just how much value they’re getting for the fee they’re paying.
Russel Kinnel, Morningstar’s director of mutual fund research, said employees should determine their plan’s expense ratio and fee level. Fund participants can view Morningstar’s rating for a fund and its performance history on the Morningstar website if the fund is public and has a ticker symbol.
Employees can also go to BrightScope’s website to check if their employer’s 401(k) plan has a BrightScope rating, which takes into account company contributions, fees, investment menu quality, vesting schedules, eligibility periods and other criteria.