Understanding your 401(k) plan fees is important when determining if they are necessary and reasonable. Plans may charge just one fee, or any combination of fees depending on your service providers. This outline addresses the three main types of fees common to 401(k) plans and how to look for hidden fees.

Employers who offer a 401(k) plan have certain fiduciary responsibilities under ERISA—for instance, understanding 401(k) plan fees to determine if they are reasonable. This is an outline of the three main types of fees common to 401(k) plans. 401(k) plans may be charged just one type of fee, or any combination of the fees described here, depending on the service providers involved. To calculate the total 401(k) plan cost, all fee categories need to be included. You can often find all your plan fees in the 408(b)(2) disclosure.

Clearing Up Your 401(k) Plan Fees

  Investment Fees Fund operating expenses, including asset management fees
+    
  Administrative & Recordkeeping Covers the cost of running the 401(k) plan including recordkeeping and administration
 
+    
  Fiduciary & Consulting Covers the cost of the fund lineup management, investment advice, fiduciary support, participant enrollment and education
 
=    
  Total Plan Cost
  95%

of plan fees are paid for by employees.* Often, administrative fees are subsidized by investment fees, which can include indirect payments to fiduciaries and consultants. This process is referred to as revenue sharing, and is a common way to hide additional fees that you and your employees pay.

  *Source: 401(k) Advisors, Inc.

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Fisher Investments 401(k) Solutions is dedicated to helping small and mid-size businesses deliver successful ‭retirement plan services. Our success is defined by each business achieving its custom 401(k) plan goals and by ‭empowering employees with the dedicated support and resources necessary to achieve a dignified retirement. Our ‭solutions are built on the core principles of providing employers and employees ready access to dedicated 401(k) ‭specialists, flexible investment options, and fee transparency.

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