Do you have a 401(k) plan?
Good. These tax-favored workplace retirement plans are a handy way to help build a decent cushion so that you can live the kind of post-work life you want.
Now answer me this. Do you know how much of your 401(k) retirement money is lost to fees?
If you don't, help (if it hasn't already arrived) is on the way.
A new Department of Labor rule went into effect this summer requiring 401(k) providers to disclose certain plan fees.
And employers must distribute those disclosures to plan participants by Aug. 30.
Facing up to fees: One of the biggest complaints about 401(k)s and similar employer-sponsored savings options is that they are full of fees that eat into earnings.
A report from Demos found that the total fees paid on 401(k) plans reduce the total retirement accounts of the average American couple by 30 percent.
The next biggest complaint is that those fees are cleverly hidden.
Maybe that's why an AARP survey last year found that 71 percent of workplace retirement plan participants said they didn't pay fees. They just couldn't see them.
But such fee invisibility is ending.
What you'll see: The new disclosure statement due by next week is an annual statement that must provide you a list of available plan investments and the fund management fees associated with each.
A little later this year you'll also receive a quarterly statement with details on how much you're paying for investment and administrative fees. This initial required report will arrive after the quarter ending Sept. 30.
All this newly-available fee data should help you figure out how big of a bite plan charges are taking out of your overall retirement account.
It also should help you and your employer compare retirement plans and shop around for the best options.
And the new transparency also should force the plan providers themselves to examine their charges and see how they can be more competitive.
Let's face it, if no workers are choosing ABC Fund because XYZ Fund has better returns when its lower fees are factored in, then ABC Fund isn't going to be in business for much longer.
Details, details: Of course, when any new program takes effect, there are always some problems.
Ideally, the data will help workers and their bosses who choose the plans make better informed choices.
But ideal is not a situation that applies to most government mandates.
There already have been reports that some fee disclosure statements are confusing. That's not exactly what the Labor Department or workers were hoping to hear.
Dave Gray, vice president of client experience for Charles Schwab, told USA Today that the statements typically are "lengthy, wordy, and there is a bit of complexity."
Still, it's a start.
If your 401(k) fee document has already arrived, dig it out of that stack of unopened mail and look it over. If you have trouble deciphering it, call your plan manager for help.
And if you haven't received your fee disclosure document, keep an eye out for it.
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