Am I Paying Excessive Fees in My Employer-Sponsored Retirement Plan?

You could be paying excessive fees in your employer-sponsored retirement plan without even realizing it. Many people enrolled in their employer’s 401(k) don’t know what fees they’re paying or how these charges are paid. The reality is that the money that you have saved in your retirement plan is paying those fees. 

Unfortunately, employer-sponsored retirement plan fees are often way too high. If you believe you were misled about these fees or how your retirement account funds are allocated, you could have grounds for legal action against a financial advisor or other liable parties. Meet with a broker misconduct lawyer who can discuss your legal options with you.

What Employer-Sponsored Retirement Plan Fees do I Have to Pay?

Employer-sponsored retirement plan fees vary. Your plan’s size, provider, and management are three factors that could determine the fees you pay. Common fees associated with 401(k) plans include:

Administration Fees

These relate to the day-to-day operation of your 401(k). They can include costs associated with recordkeeping, accounting, and legal services. You could pay administration expenses via investment fees taken directly from your investment returns or be required to cover these costs separately. 

Investment Fees

You could pay fees associated with managing your plan investments. These fees are generally assessed as a percentage of the assets invested. They can be paid via a charge against your account, as they are deducted from your investment returns. 

Individual Service Fees

You could face individual service fees relating to optional features available under your 401(k). For example, you want to take out a loan from your 401(k). Your plan allows you to do so, but you could be charged individual service fees if you move forward with this request.

Plan participants should be made aware of all associated fees. If you have not received information about myriad 401(k) fees but have been charged them over an extended period, seek legal help.

A financial advisor negligence lawyer can determine if you can file a lawsuit and provide insights into what this legal process entails. 

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How Can I Tell if I Am Paying Excessive Fees in My Employer-Sponsored Retirement Plan?

Review your plan’s 408(b)(2) form, which details the services provided. This will give you a rundown of all associated fees. Take a look at your 401(k) plan fees closely, and you can see how the funds you invest are being used.  

Each year, your plan provider is legally required to give you a 404(a)(5), also referred to as a participant fee disclosure. This is a record of your 401(k) fees and includes information about the cost of investments, administration, and recordkeeping. Evaluate this record annually so you can assess how fees change from one year to the next. 

If you conduct research and feel you are paying excessive fees in your employer-sponsored retirement 401(k), alternatives are available. Explore these options with a trusted financial advisor.

Together, you and your advisor can find ways to achieve your savings goals and continuously focus on protecting your retirement account from investment fraud. 

What Should I Do if I Am Paying Exorbitant Fees in My Employer-Sponsored Retirement Plan?

Remember, you have the flexibility to use your funds any way you choose. If your employer-sponsored retirement 401(k) fees seem high, it may be time to reassess your options. Here are tips to help you find ways to maximize the value of your retirement funds. 

See How Your 401(k) Stacks Up Against Alternatives

Consider administration fees and others in conjunction with those of comparable 401(k) options. Investment advisors can assist you with your analysis. They can share relevant information to help you make informed investment decisions.

Speak to Your HR Department

Tell an HR representative that you are concerned that you are paying high fees in your employer-sponsored 401(k). This representative could provide risk disclosures and other 401(k) information. Ideally, plan sponsors will do everything they can to make sure your 401(k) meets your expectations.

Make Changes to Your 401(k)

Combat high fees by making sure you can realize the full benefit of having your employer match your 401(k) contributions. You can also supplement your 401(k) with an individual retirement account (IRA). Investment managers can teach you about IRAs, how they work, and the risks associated with them. 

If your 401(k) fees are extremely high and you are worried a broker is lining their pockets with your retirement money, a lawsuit may be warranted. An investment fraud lawyer can explain the claims process and excessive fee lawsuits. They can help you decide if now is the right time to proceed with litigation. 

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Trust Our Investment Fraud Attorneys to Help You Contest Excessive Employer-Sponsored Retirement Plan Expenses

Excessive fee litigation may seem like it is more trouble than it is actually worth. However, 401(k) policies are in place to protect you and other stakeholders against many types of fees. If you incur exorbitant fees that limit the true value of your investment, it could be beneficial to take legal action against your employer. 

The Meyer Wilson legal team has more than 75 years of combined experience. As national leaders in investment fraud litigation, we will commit the time, energy, and resources required to help you achieve your desired case outcome.

Schedule a case consultation with our team if you’ve suffered more than $100,000 in losses from excessive fees. 

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