New 401(k) and mutual fund disclosure rules might shine light into 401(k) reports

In her piece What's not on 401(k) statements, Kathleen Pender takes a look at new rules governing advertising and performance reporting for 401(k)s and mutual funds. According to the piece, "Under the National Association of Securities Dealers rule, any time a mutual fund shows any type of performance data, it also must show three things: standardized performance results that follow Securities and Exchange Commission requirements; the maximum sales charges applicable to that fund; and its annual operating expenses, known as the expense ratio. The expense ratio cannot reflect any fee waivers or reimbursements."

It's not clear what effect the rule will have on 401(k) reporting, but it seems like it should apply there too, where disclosures are traditionally all even more obfuscatory than they are in the mutual fund industry. I'm hoping that companies will be required to disclose this information for 401(k)s too, but I wonder how much good it will do. Most employees don't look at or understand their 401(k) statements.

I would like to see the NASD and/or the SEC put together a booklet to be included with 401(k) statements explaining how to read/understand/evaluate their investments.