401(k) Fees Too High? Your Employer May Not Be Doing Its Due Diligence
Nov 09, 2018
November 9, 2018 – For many of us, employer-sponsored 401(k) retirement plans are the cornerstone of our financial security in retirement. However, excessive fees can eat into our hard-earned savings and leave us questioning whether our employer is managing the plan properly and operating in our best interest.
The Employee Retirement Income Security Act (ERISA) requires retirement plan fiduciaries to set up, monitor and manage 401(k) and retirement plans solely in the interest of participants and beneficiaries and for the exclusive purpose of providing benefits to them. This includes making suitable, appropriate and diversified investment decisions that consider the cost and performance of the plan.
ERISA also requires employer-fiduciaries to ensure participating employees pay only reasonable fees for services including, but not limited to, investment consultation, accounting, recordkeeping, customer service and investment management. These are commonly referred to as “plan administration fees,” “investment fees” and “account maintenance fees.”
Sometimes fees for these services are bundled and deducted directly from employees’ investment returns, making them difficult to track and determine. Since employees often pay most of these fees, employers must apply prudent decision-making and due diligence to understand how fees are calculated, as well as negotiate lower fees when appropriate and ensure all fees remain reasonable relative to other plan providers. Employers offering investment products with high fees when lower fee options are available may be liable to make good on plan losses, to restore profits, and to provide any other equitable or remedial relief.
For more information about your rights concerning 401(k) and retirement plans, click here.
Contact Our Employee Benefits Attorneys
Baillon Thome Jozwiak & Wanta LLP is committed to protecting the rights of all employees who have been treated unfairly by the illegal practices of their employers. If you believe your employer has violated your ERISA rights or failed to act in your best interests concerning your 401(k) retirement plan, we want to hear from you. Contact us by clicking here for a free initial consultation.