Plan sponsors need to realize that they are a fiduciary of the company’s retirement plan and reviewing the quality of your plan is not optional. 401k hidden fees are at the forefront of new DOL regulations because service providers have taken advantage of plan participants for far too long. However, it is the plan sponsors willingness to actually do their due diligence and review information that is provided and to take appropriate action in regards to providing the best possible plan experience for employees. Failure to comply with the many detailed requirements of the new regulations generates personal liability for the plan fiduciaries.
Here is a link to an article from this weekend Barrons, “True 401k Fees to Be Revealed“, on 401(k) fees and how the true cost of plans will finally be revealed later this year for all participants to see. As the article states:
“Whether you are in a position to weigh in on your plan’s administration or you are simply a participant, the new fee and benchmarking disclosures will finally allow you to know what you are paying. It’s about time.”
Better information will lead inevitably to better plans provided for employees. Awareness of fiduciary responsibility and risk, especially as it pertains to fee oversight, is at an all-time high. Fee allocation, revenue-sharing and asset-based payments vs. hard-dollar payments are all areas plans sponsors should pay close attention to in order to uncover any 401k hidden fees and more importantly to avoid numerous lawsuits filed by employees who learned after the fact that they were paying large hidden fees to investment firms managing their accounts.