401K Fees: How Much Are You Paying?

Many individuals are only just discovering that they have been charged excessive fees on their 401k, causing the retirement plan’s savings to decrease. As a result, many people are now filing 401k lawsuits or joining 401k class action lawsuits against their employers for charging higher fees when options for lower fees were available.

Tips for Discovering 401k Plan Hidden Fees

Here are some tips to figure out how much you’re paying in 401k fees and if your employer is charging you too much:

• Estimate your direct investment expenses by looking for each of your funds’ expense ratio. This 401k fee may be found on your 401k retirement plan website and they are generally expressed as an annual percentage.
• Review your most recent 401k statement and record the expense ratio next to each fund’s balance. Then, multiply the expense ratio by the ending balance in order to determine the cost of each fund, and add up the expenses for all said funds.
• If your 401k plan’s expense ratio is 1% or less, then it is considered to be reasonable. However, if your 401k retirement plan employs a broker or an investment consultant, then you may be charged an extra 2% or more for a portfolio managing fee.
• Find out if operating expenses are tacked on to your 401k fees and expenses. In some cases, employees may be sharing the cost of operating the 401k plan with their employer. Bigger companies usually choose to pay plan expenses for their employees; however, this is not always economically feasible for smaller businesses, in which case you may pay some operating fees for you 401k plan. Even when paying these fees, these expenses are usually less than employees would pay if they were investing on their own.
• Find a copy of your 401k plan’s annual report summary, which you can get from your benefits office. You can look for your plan’s expenses under the “basic financial statement” section, then subtract the amount of benefits paid. The difference that results from equation is the net administrative expenses of your 401k plan.
• Compute the administrative costs by dividing the net expenses by the total value of the 401k plan then multiplying the percentage by the total account balance of your 401k.
• Investigate 401k hidden fees (also known as undisclosed fees), which could be funding an employer’s retirement fund, especially if revenue sharing is involved in this 401k plan, which are almost never disclosed.

401k Retirement Plan Litigation

Under the Federal Employee Retirement Income Security Act (ERISA), companies must act in the best interest of their employees by making sure the 401k fees being paid by employees are reasonable. If an employer is found to be charging employees higher 401k fees when lower fees were available, they may be at risk of being sued in an ERISA lawsuit.

Join a Free 401K Class Action Lawsuit Investigation

If you believe you have been overcharged for 401k fees by your employer’s retirement plan, or that the investments were otherwise imprudent, you may be eligible for a FREE class action lawsuit investigation and pursue compensation for these violations.

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