The Labor Department should compel defined contribution plan providers to fully disclose all revenue-sharing agreements and investment management fees charged in retirement plans, said Christian Echavarria, senior vice president of Invesmart. With a mandate of complete fee transparency, "plan sponsors and participants could finally evaluate the fairness and competitiveness of the fees they're paying," Mr. Echavarria said in a statement.
The Labor Department and the SEC are looking into 401(k) fee practices.
"There's been much-needed fee disclosure reform in the retail mutual fund industry, but many retirement plan participants are still in the dark when it comes to how much they're paying in plan fees and what the fees are for," he said. "Our analysis of 3,000 quality mutual funds earlier this year revealed a surprising level of hidden service and marketing fees embedded in mutual funds expense ratios paid by participants in addition to service fees paid by plan sponsors."