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Using the 404(a)(5) to add value to your services

The soon-to-be-mandatory Education Policy Statement should provide 401(k) plan participants with clear objectives, performance standards and results.

By Charlie Epstein | Updated on March 02, 2012

Merrill Lynch agreed to pay Wal-Mart 401(k) plan participants $13.5 million dollars over excessive plan fees. This settlement comes on the verge of the final deadline for ERISA 408(b)(2), which requires service providers to give plan sponsors fee disclosure information by July 1, 2012. Receiving less focus, however, is the next step in the disclosure process: 404(a)(5).

This ERISA section compels sponsors to compile and analyze these disclosures and supply participants with an initial annual fee disclosure by August 31st, 2012. At this time, an investment comparative chart is also required for participants. These changes present a variety of opportunities for advisors to offer value-added services to their clients.

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