Almost 40% of 401(k) plan participants do not fully understand the fees they are paying, a Government Accountability Office report released Thursday found.
Moreover, 41% of participants incorrectly believe that they do not pay any 401(k) plan fees, according to the report.
The Department of Labor requires plans to provide participants with fee disclosures, but GAO found that 45% of participants are not able to use the information in disclosures to determine the cost of their investment fee.
"The GAO's findings are a wake-up call for the Department of Labor and for consumers who have 401(k) plans," said Rep. Robert C. "Bobby" Scott, D-Va., chairman of the House Education and Labor Committee, in a news release. "This report is clear evidence that the Department of Labor should require plan providers to make fee disclosures easier to understand and ensure that participants are fully informed about how these fees impact their savings."