In 2007, CNN reported the hidden danger in undisclosed 401(k) fees, a potential forfeiture of $85,000 for an employee who expects an 8 percent return over 25 years with a contribution of $150 per pay period to an existing $30,000 401(k) account balance.
In 2012, the U.S. Labor Department finalized new rules governing the disclosure of 401(k) fees, requiring providers to publish easy-to-understand "roadmaps" of fees for all enrollees. In the past, 401(k) plan sponsors buried the information about the fees they charged in lengthy plan disclosure statements.
By Aug. 30, 2012, investors will receive an initial report from their 401(k) plan provider with a simplified roadmap, that, for the first time, will give a comprehensive overview of all fees related to the employee's 401(k) account. In November, quarterly statements will also begin to include fees charged by the sponsor. To help prepare employees for these reports, the U.S. Department of Labor released the publication, "A Look at 401(k) Plan Fees."
Though analysts project 401(k) fees to ultimately fall as a result of this full disclosure, upon receiving the summer report, it is vital that employees determine their plan's level of fees charged in the past so as to determine whether they have been gouged by their 401(k) providers.
According to the Investment Company Institute, median 401(k) fees run the gamut from 0.3% for stable value accounts to 0.75% for equity accounts. Meanwhile, most balanced accounts contain fees in the 0.5 to 0.6% range.
If you believe you individually or your employees collectively have been unjustly overcharged 401(k) fees, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.