Page 1 GAO-24-107125 Fee Disclosures
September 27, 2024
Congressional Requesters
401(k) Plans: Reported Impacts of Fee Disclosure Regulations, and DOL Efforts to
Support Implementation of Regulations
Millions of workers save for retirement through employer-sponsored 401(k) plans. Plan
sponsors (employers) hire service providers to help operate their retirement plans. Service
providers charge fees for activities such as tracking participants’ contributions and providing
investment education. These fees are paid by the plan sponsor or by plan participants
(generally current or former employees). When paid by participants, such fees can significantly
impact retirement savings growth.
1
Recognizing the importance of plan sponsors and participants having greater awareness of fees
and investment performance, the Department of Labor (DOL) issued two 401(k) fee disclosure
regulations in 2010 and 2012.
2
One regulation requires service providers to disclose information
about the fees they receive for providing plan-related services. Service providers must furnish
this information to plan fiduciaries, which include plan sponsors, so that fiduciaries can make
informed decisions in selecting and monitoring service providers. The other regulation requires
plan administrators, which could be the plan sponsor, to provide plan and investment fee
information to participants and beneficiaries so that they can similarly make informed decisions
about the management of their individual accounts and the investment of their retirement
savings.
3
In July 2021, we reported on participants’ understanding of fee disclosures. We found that 40
percent of participants we surveyed did not fully understand fee information, and 41 percent did
not know they paid fees.
4
You asked us to review plan sponsor and service provider
perspectives on DOL’s fee disclosure regulations. This report addresses (1) literature and
selected stakeholder groups’ views on how the fee disclosure regulations affected 401(k) fees
1
Department of Labor, Understanding Retirement Plan Fees and Expenses (Washington, D.C.: Sept. 2021). We have
also reported that even seemingly small fees can significantly impact 401(k) plan participants’ retirement savings,
even as investment returns may grow their savings overall. See GAO, Private Pensions: Changes Needed to Provide
401(k) Plan Participants and the Department of Labor Better Information on Fees, GAO-07-21 (Washington, D.C.:
Nov. 16, 2006).
2
See 29 C.F.R. §§ 2550.404a-5 (effective December 20, 2010, and applicable to plans beginning November 1, 2011),
2550.408b-2(c) (effective July 1, 2012). The regulations refer to fees and expenses in some instances and refer only
to fees in other instances. We will use the term fees in this report. For the purposes of this report, we refer to these
regulations as 401(k) fee disclosure regulations although the regulations also apply to other types of retirement plans.
3
For ease of reporting, we generally refer only to plan sponsors (rather than plan fiduciaries or administrators) and
plan participants (rather than plan beneficiaries) in this report.
4
GAO, 401(k) Retirement Plans: Many Participants Do Not Understand Fee Information, but DOL Could Take
Additional Steps to Help Them, GAO-21-357 (Washington, D.C.: July 27, 2021). We made five recommendations,
including that DOL make certain changes to the disclosures participants receive. DOL has not yet addressed our
recommendations but told us, in September 2023, that these recommendations will be considered as the agency
reviews fee disclosures in 2024. DOL’s review is expected to be completed in 2025.
