401K Plan Trustee – Do You Know What You’re Paying For?

8 May

If you aren’t the contact or trustee of a 401(k) plan in Santa Rosa or Sonoma County, I’ll do you a small favor…go ahead and skip my blog today. Today’s blog is really only for people who are in charge of their company’s 401(k).

You might be aware, now that it has been going on a few years, that the US Department of Labor (DOL) requires plan service providers to disclose fees these days.  We call this ERISA 408(b)(2) and this disclosure is apparently a real focus for DOL auditors.

So, are you doing this right? Are you finding out if there are conflicts of interests? Are you sure what these fees are paying for and if the fees are reasonable? Are you sure the disclosures are proper? Are they easy for your employee participants to understand?

The DOL is finding that small companies are generally not getting this done right. That the disclosures are not concise and clear.  The DOL is finding that small company trustees are having trouble with this new aspect of the law. In many cases, they are violating their fiduciary responsibility to assess whether their plan is disclosing relevant information and determine if the plan fees and expenses are reasonable.

Ask yourself, when is the last time you had a plan cost comparison done for your company plan? If it has happened, it would be in your investment committee meeting notes. What? You don’t have an investment committee?

You need to call us!

For more on this topic, click here


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