For many, business owners and employees alike, the retirement account is a major part of their net worth. Yet, until the day they finally look retirement square in the eyes, most people seem to be more concerned about the success of their vacations than their 401(k) investments.

Most 401(k) participants I've met, even the business owners, know very little about their plans. You probably know the investments you've selected. But do you know how well those investments have performed? Do you know how much they cost? Do you know how much the plan itself costs? Few people do. But you should, because all of those costs are deducted from your 401(k) account and directly reduce your retirement returns. The impact may be more than you think.

And you may never know it, unless you study the one document that hardly anyone reads: The Fee Disclosure Statement. As of Aug. 30, 2012, it became a required disclosure sent to all 401(k) participants. This regulation was a huge victory for the Department of Labor (DOL), which fought scores of lobbyists over many years in their altruistic effort to make fees and returns more transparent.

As Andrew Williams, a benefits lawyer and partner at the Chicago law firm of Golan & Christie LLP, told me, "This was the disclosure that was supposed to change the 401(k) industry. Both business owners and 401(k) participants would finally know what their plan investments cost and how they performed. This disclosure would shed a light on hidden charges and ultimately bring down plan costs, all of which would increase net investment returns."

Unfortunately, there were two problems:



1) The DOL regulation didn't mandate a template for the fee disclosure. This led insurance company and mutual fund plan providers to take advantage of the situation. They turned what could have been a concise, informative report into a complete mockery, a thick document of complex language that often spans 20-40 pages. Williams noted, "Many providers turned their fee disclosure document into a verbal smoke screen obscuring the relevant information. Finding even basic information about the plan can be like playing 'Where's Waldo'."

2) Few business owners and their employees read the document.

But they should. Many 401(k) plan participants are paying inflated fees and getting very little for it. Why do fees matter? Because they directly reduce the value of your investments.

In many fields of business, higher fees mean higher quality. Not in the investment field. Independent study after study have demonstrated that it's nearly impossible to beat the market over the long term. Moreover, the studies show that the higher the costs, the lower the investment returns. Higher fees don't add value; they subtract value.

Bottom line: Keep your investment costs low.

What can you do?

Read your Fee Disclosure Statement. If you don't have it, request it from your plan provider.

Look at the fees. Do they seem reasonable? If they're greater than 1%, check with your plan administrator to see if they can be lowered.

Look at the returns of each fund. Do they match up with their index benchmark? If not, maybe you can get the plan administrator to offer low-cost index funds that are designed to track the index benchmarks.

Does your asset allocation (your choice of investments and amount of each investment) make sense? Does it fit well with your personal objectives and risk tolerance?

These aren't simple questions. You may want to speak with an investment adviser who is well-versed in 401(k) plan investing. Or consult with another trusted professional.

In any case, give your 401(k) plan the attention it deserves; it may be the difference between an enjoyable retirement and one of constant concern.

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