Department of Labor unveils 401(k) fee rules

[Omaha Steve]

http://www.reuters.com/article/idUSTRE66E78Y20100715?type=domesticNews

By Helen Kearney

NEW YORK | Thu Jul 15, 2010 7:11pm EDT

NEW YORK (Reuters) - Advisers and brokers who manage 401(k) plans will have to provide detailed information about the fees they charge under new rules unveiled by the U.S. Department of Labor on Thursday, but the changes are not as onerous as the brokerage industry first feared.

The rules require advisers to provide a detailed account of the fees they are charging to manage the retirement plans, which are mainly employer-sponsored.

Phyllis Borzi, assistant secretary for the Labor Department's Employee Benefits Security Administration, said the rules are scheduled to be published in the Federal Register tomorrow and go into effect in July 2011.

Advisers will also have to reveal how they and their firm will be paid. Are they paid, for example, by billing the plan's sponsor directly or through revenue-sharing agreements, where some of the expenses charged for a mutual fund included in the plan are used to pay the adviser and firm?

"For broker-dealers, this is really as good as it could have been," said Jason Roberts, an attorney with Reish & Reicher who specializes in pension plans.

Under the initial proposed rules, advisers and brokers were also going to have to give employers a written contract detailing their services. This requirement has been removed.

FULL story at link.