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New 401(k) Plan Disclosure Rules

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Background
As 401(k) plans have become more popular, plan participants have become increasingly responsible for making their own retirement savings decisions. The Department of Labor (DOL) has become concerned that participants in self-directed 401(k) plans (those that allow participants to direct the investment of their own accounts) might not have access to, or might not be considering, information critical to making informed decisions about the management of their accounts--particularly information on investment choices, fees, and expenses.

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New 401(k) Plan Disclosure Rules

  1. 1. 6363 Woodway Dr Suite 870 Houston, TX 77057 Phone: 713-244-3030 Fax: 713-513-5669 Securities are offered through RAYMOND JAMES FINANCIAL SERVICES, INC. Member FINRA / SIPC Green Financial Group An Independent FirmNew 401(k) Plan Disclosure Rules Background As 401(k) plans have become more popular, plan participants have become increasingly responsible for making their own retirement savings decisions. The Department of Labor (DOL) has become concerned that participants in self-directed 401(k) plans (those that allow participants to direct the investment of their own accounts) might not have access to, ormight not be considering, information critical to making informed decisions about the management of theiraccounts--particularly information on investment choices, fees, and expenses.As a result, in October 2010, the DOL issued new regulations that require self-directed 401(k) plans to providedetailed information to participants about the plan and its investments, on a regular and periodic basis, so thatparticipants can make informed investment decisions. Some information must be provided on an annual basis,and some information must be provided quarterly. For most plans, the initial annual disclosure must befurnished no later than August 30, 2012. The first quarterly statement must be furnished no later than November14, 2012 (for July through September).
  2. 2. Whats changing?If youre currently participating in a 401(k) plan, chances are youre already receiving similar information as aresult of an earlier set of DOL regulations. However, employer compliance with the older regulations wasvoluntary, whereas the new disclosure rules are mandatory for all self-directed 401(k) plans. Even participants inplans that previously complied with the earlier disclosure rules will see some changes when the new regulationstake effect. For one, youll receive more detailed information about investment fees and expenses. Anotherchange is that plan investment information must be provided in a chart, so that youll be better able to compareinvestment alternatives. And plans will no longer be required to automatically provide a prospectus, although onemust be provided if you request it.Which plans do the new rules apply to?These new disclosure rules apply to 401(k) plans and other plans that allow participants to direct their owninvestments, but they do not apply to IRAs, SEPs, or SIMPLE IRA plans. They also do not apply to plans that arenot covered by the Employee Retirement Income Security Act of 1974 (ERISA), including governmental plans,owner-only plans, certain 403(b) plans, and certain church plans.This information, developed by an independent third party, has been obtained from sources considered to be reliable, butRaymond James Financial Services, Inc. does not guarantee that the foregoing material is accurate or complete. Thisinformation is not a complete summary or statement of all available data necessary for making an investment decision anddoes not constitute a recommendation. The information contained in this report does not purport to be a complete descriptionof the securities, markets, or developments referred to in this material. This information is not intended as a solicitation or anoffer to buy or sell any security referred to herein. Investments mentioned may not be suitable for all investors. The material isgeneral in nature. Past performance may not be indicative of future results. Raymond James Financial Services, Inc. does notprovide advice on tax, legal or mortgage issues. These matters should be discussed with the appropriate professional.Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC, an independent broker/dealer, andare not insured by FDIC, NCUA or any other government agency, are not deposits or obligations of the financial institution, arenot guaranteed by the financial institution, and are subject to risks, including the possible loss of principal.Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2012.

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