How much does your 401(k) cost?

That’s the million-dollar question Robert Powell takes on in his June 10 MarketWatch column, and his answer is surprising. In short: we don’t know.

And it isn’t easy to find out, not yet at least.

Apparently, the Senate backed off one reform proposal that would have forced the 401(k) industry to disclose fees to participants. But, as Powell writes, “That’s OK, because the numbers still favor retirement savers.”

Some 50 million participants deserve, and will begin to demand, to know. The industry is fronted by a few dozen lobbying groups. Powell concedes industry objections may be valid, especially when it comes to the present system’s ability to generate the number.

The debate, from the industry side, is still at the level of “consumers won’t know how to read the numbers,” but that’s bound to change. Already companies such as Putnam are breaking out the asset management fees for client review, ostensibly as a service to their customers. Still, it can be argued that data beyond expense ratios will ultimately provide a competitive advantage (or expose a serious disadvantage) for 401(k) managers.

The trend toward transparency, whatever the industry, is inevitable. Isn’t that the argument for information-based free markets?

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