401k Fee Disclosure Worksheet (Page 4 of 4) in pdf

Explanation of terms as used in this worksheet (some additional terms not referenced in this worksheet are also described):

Administration/ Recordkeeping Expense: Fee for administering the plan. This typically includes recordkeeping expenses.

Annual Audit: Federal law requires that all plans with more than 100 participants be audited by an independent auditor. It is also common to refer to a DOL or IRS

examination of a plan as a plan audit.

Back-End Load: Sales charges due upon the sale or transfer of stock, mutual funds, or other investments.

Commission: A fee paid to a broker or other intermediary for executing a trade.

Plan Conversion: The process of changing from one service provider to another.

Discrimination Testing Expense: Tax qualified retirement plans must be administered in compliance with several regulations requiring numerical measurements. Typically, the

process of determining whether the plan is in compliance is collectively called discrimination testing.

Distribution Expense: The costs typically associated with processing paperwork and issuing a check for a distribution of plan assets to a participant. May include the

generation of a Form 1099R. This transaction-based fee may apply to hardship and other in-service withdrawals as well as to separation or retirement distributions.

Education Program Expenses: Costs associated with providing print, video, software and live instruction to educate employees about how the plan works, the plan

investment funds, and asset allocation strategies. There may be a one-time cost associated with implementing a new plan, as well as ongoing costs for an existing

program.

Eligible Employee: Any employee who is eligible to participate in and receive benefits from a plan.

Enrollment Expenses: Costs associated with providing materials to educate employees about the plan, and to enroll employees in the plan. This may be part of, or

included in, the education programs. There may be a one-time cost associated with implementing a new plan, as well as ongoing enrollment costs.

Expense Ratio: The cost of investing and administering assets in a mutual fund or other collective fund expressed as a percentage of total assets.

Form 5500: A form which all qualified retirement plans (excluding SEPs and SIMPLE IRAs) must file annually with the IRS.

Front-End Load: Sales charges incurred when an investment such as a stock or mutual fund is purchased.

Fund Fee: Fee charged by some vendors for each fund provided in the plan. There may be a one-time fund fee at plan inception and an ongoing charge per fund.

Hardship or In-Service Distribution: A participant’s withdrawal of their plan contributions prior to retirement. Eligibility may be conditioned on the presence of

financial hardship. These distributions are taxable as early distributions and are subject to a 10% penalty tax if the participant is under age 59 ½.

Installation Fee: One-time fee charged by some vendors for initiating a new plan.

Investment Transfer Expense: Charge associated with a participant changing his or her investment allocation.

Loan Fees: Vendors may charge a fee when a plan loan is originally taken, as well as an ongoing fee for each outstanding loan.

Management Fee: Fee charged to pay for the management of a mutual fund’s or other collective fund’s portfolio by an investment manager.

Out of Pocket Expenses: Expenses such as travel, postage and printing.

Participant: Person who has an account in the plan.

Plan Document/ IRS Filing Fee: Costs associated with preparing and filing IRS required documentation, including the request for a determination letter.

Plan Loan: Loan from a participant’s accumulated plan assets, not to exceed 50% of the balance or $50,000, whichever is less. This is an optional plan feature.

Sponsor: The employer who establishes and maintains a plan.

Sub-account Transfer Credit: An expense charged against the fund that is used to offset the administrative expenses of a third party administrator.

Transaction Expenses: Fees charged on a per-incident basis for activities such as investment transfers, in-service withdrawals and distributions.

Trustee: The individual, bank or trust company having fiduciary responsibility for holding plan assets.

Wrap Expense: A fee based on all the assets in the plan and in addition to individual fund-related fees. Typically pays for the bundling of services related to

investing plan assets, possibly including administrative services such as recordkeeping or the preparation of signature-ready Form 5500’s.

12(b)1 Fee: A charge to shareholders to cover a mutual fund’s distribution and marketing costs.