Employees are often given few choices when it comes to their 401(k) or retirement plan. In many instances, plans contain excessive or hidden fees. Brokers and middle-men may be collecting fees which grossly exceed the value of the services provided to plan participants. Furthermore, plan sponsors may be failing to satisfy affirmative obligations to act in the best interest of the plan participants. These excessive fees deprive you of valuable retirement savings.
401(k) plan abuses are not without remedy. Federal law prohibits excessive fees and allows you to recover damages from a plan sponsor who violates its fiduciary obligations.
Employees can look to several factors that might indicate excessive fees, including:
Employees have a right to request fee and expense information from their employer. The United States Department of Labor’s website provides a closer look at the type of fees that may be relevant to your 401(k) or retirement plan.
ERISA 401(k) claims are often brought as class actions, where one or more individuals sue on behalf of all other similarly situated plan participants. Many ERISA class actions allege that plan participants are paying “hidden” or “excessive” fees. Potential conflicts of interest arise when fees paid by plan participants to investment advisers (mutual fund companies) are then paid to brokers or other service providers as rebates or reimbursements. Known as “revenue sharing,” this practice may provide an incentive for service providers to promote certain investment funds, marketing services, and record keeping expenses over other more prudent and less costly options. Fiduciaries may also breach their duty to the plan by paying an excessive investment management, administrative and record-keeping fees. Excessive fees often occur when plan sponsors fail to monitor and change 401(k) investment fund options to maximize revenues and minimize expenses for the benefit of plan participants, such as selecting higher cost retail class shares or bundled service arrangements.
Our Albany litigation attorneys are committed to protecting the rights of employees and their retirement plans.
