401K Fee Disclosures Will Inspire Change

March 2, 2011

in 401K,403b,Employee Benefits

By July 16, 2011 you will know the total fees you are paying in your 401K.  That is when ERISA Section 408(b)(2) takes effect.  Most people and many plan sponsors are clueless about fees, even though plan fiduciaries are legally obligated to not only know what they are, but also to keep them reasonable.  I have seen plans with 1% in total fees and with 3%.  The difference in value over 30 years is staggering!  Plan sponsors should be seeking plans with 1% fees for an obvious reason – the performance of the underlying investments is the same before fees.  Plan sponsors should work with a fee-only investment advisor, a third party administrator, and a custodian with a robust technology platform to provide a low-fee plan for their employees.

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