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All investments have internal fees but the fees vary dramatically. If your company representative ( the person at your company that makes the final decisions on what vendor is selected for your 401k - that is usually the owner or CEO ) does not monitor these fees closely, they can cost you a lot of money. You have an absolute right to have a CLEAR understanding of the fees that you are paying inside your company sponsored 401k investments. Since you can only pick from a menu of funds that your company approves, they are the ones that have the responsibility to make sure that ALL fees that are taken from your account are necessary and that they are competitive to industry standards.
In fact, your company has a fiduciary responsibility to make sure you are paying reasonable fees and they should be doing everything possible to assure that the fees that you are paying have been disclosed to you in an Easy and Clear format. There have been several recent lawsuits from plan participants suing their company's fiduciaries for not clearly disclosing fees. Your company has the right to charge ALL applicable administrative fees or the can pay ALL administrative fees, most company pay a portion if not all of the administrative fees but I not aware of any company that pays the management fees of the funds. Ask for an explanation of fees being charged against your account. If you do not ask or question the fees, they will continue to go up, reducing the money that you will have at retirement. John J. Moynihan, Accredited Investment Fiduciary, specializing in 401k plans |
