Since 401(k) plans are becoming the sole source of retirement savings, according to an article in the Wall Street Journal on July 12, 2006, there is concern that 401(k) fees reduce the dollar amounts to participants.
This reduction in amounts to participants leads to ERISA class actions, and a need for plan fiduciaries to understand plan recordkeeping, trustee, and investment fees; revenue sharing issues; and float concepts.
Fiduciaries for 401(k) plans have duties to comply with plan documents, to prevent self-dealing, and to exercise prudence. In order to carry out these duties, a fiduciary should review plan documents, be aware of compensation arrangements for services, review expense allocation procedures, understand participant fee disclosure procedures, and review situations that generate floats for service providers.
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