401k fees Tag

https://www.kielichlawfirm.com > Posts tagged "401k fees"

Top Five Questions You Should Ask About Your 401k Plan (updated 2021)

The more information you know about your plan the better off you will be because your retirement plan account is very likely going to be one of your largest assets over the course of your life if not the largest. If you are new to saving for retirement or new to a plan this is a good place to start understanding your 401k. The plan’s summary plan description (SPD) should address these issues Does the plan offer employer match and if so how is it calculated? Many plans offer some sort of matching contribution from the employer when you make contributions from your...

Continue reading

Can you sue your financial adviser under the DTPA in Texas?

Disputes with financial advisers are common, particularly in periods of economic decline and volatility. When things are good most people do not carefully watch what their financial adviser or broker is doing. When things turn south people look to their financial advisers to help them out and problems are uncovered. Sometimes the complaints about financial advisers are just people looking for a place to blame losses. Sometimes the complaints are just that the financial adviser did not personally manage a client's accounts when the adviser was not responsible for personally managing the accounts and the client suffered market losses. However, sometimes...

Continue reading

Vanguard funds targeted in new 401k excessive fee litigation

401k excessive fee litigation has been an active area of ERISA litigation for over a decade with 401k participants arguing the plan administrator--along with various other plan fiduciaries--breached the duty to prudently manage the investment options of the plan. Most of these cases argue the plan administrator failed to select investments with reasonable fees, particularly in light of the buying power of the 401k plan to obtain lower fee share classes or to obtain access to lower fee funds in the market. Although this issue has been litigated for over a decade we still do not have a clear rule...

Continue reading

Dissecting fact and fiction from a recent report on retirement savings

As somebody who spent a decade working in employee benefits and now practices employee benefits law, I have an understanding of the employee benefits industry. When I saw WFAA in Dallas covering a report about retirement savings I couldn't pass up the opportunity to fact-check. Predictably, the piece mixes a little truth with a lot of scare tactics and misdirection. (You can read the WFAA story here.) Let's get right into the thick of it. The first thing we should note is who conducted the study involved in this news story. The study comes from the Employee Benefits Research Institute (EBRI). Although...

Continue reading

Can my employer change the 401k plan or make an exception for me?

Generally, no. The federal regulations that govern 401k plans require that 401k plans do not discriminate against employees. Plans must have uniform rules and the rules must apply in a uniform manner. For example, if your plan permits hardship withdrawals it must establish specific rules for those distributions. Plans can establish some variances in rules across different business units, but once the rules become effective they cannot change without amending the entire plan. In order to make an exception or change the rules, the plan has change for everybody. Even when a 401k plan desires to make a change, changes often require amending...

Continue reading

Should I be concerned about 401k fees?

401k fees have come into focus as one of many ways the financial services industry leeches money from the investors. That focus turned into litigation by participants against their plans (and plan service providers). Eventually the Department of Labor instituted fee disclosure rules that require plan service providers to break down fees charged to the plan and participants. Although most of the litigation has been unsuccessful in recovering awards for participants, the fee disclosure rules did force the financial service industry to better expose the relationships between the plan, participants, investments and fees. That way the plan can assess the fees paid...

Continue reading

Retirement Plan Participant Disclosures

By now you received fee disclosure statements on your 401k, ESOP, 403(b) and profit sharing plans. These fee disclosure statements, known as 404a5 Participant Disclosures, ensure these retirement plans provide plan participants with a minimum amount of information about the fees charged by plan investments and fees paid by the plan (often from those investment fees) to companies that provide services to the plan, such as auditing, accounting and investment management. These disclosures provide participants with information necessary to adequately assess the investment options within your plan. Why these retirement plan disclosures began In the 1990s mutual fund and insurance companies realized the...

Continue reading

Can I sue my Texas broker for investment losses?

It depends. Generally you cannot hold anybody else responsible for market losses on your investments. However, there are some situations where another party may be responsible for your investment losses. Some claims against brokers do not relate to market losses but to other negligent or fraudulent acts by a broker or adviser. When considering lawsuits against a broker or adviser one must consider: (1) the liability issues; (2) the value of any lawsuit or other claim; and (3) the cost to prosecute claims with a consumer attorney in Texas. Often claims against brokers have to be filed in a specific forum....

Continue reading

ERISA Retirement Plan Participant Disclosures

By now you received fee disclosure statements on your 401k, ESOP, 403(b) and profit sharing plans. These fee disclosure statements, known as 404a5 Participant Disclosures, ensure retirement plans provide participants with a minimum amount of information about the fees charged by plan investments and fees paid by the plan (often from those investment fees) to companies that provide services to the plan, such as auditing, accounting and investment management. These disclosures provide participants with information necessary to adequately assess the investment options within your plan. Confused about the disclosures? Talk to an employment lawyer near you. Why these 401k fee disclosures began In the...

Continue reading

What is an Summary Plan Description?

SPD is a Summary Plan Description. It is the employee benefit plan documentation that must be provided to all participants and beneficiaries that explains the basic rules of the plan in layperson’s terms. It contains descriptions of the rules for eligibility, participation, vesting, benefit calculation, benefit availability and how to file a claim for benefits. An SPD can be an important tool to understand your 401k or other retirement plan. According to the Department of Labor: The summary plan description is an important document that tells participants what the plan provides and how it operates. It provides information on when an employee...

Continue reading

What can I do to dispute my benefit plan?

You may have many reasons to dispute your benefit plan, such as 401k or pension. You may disagree with the facts used to calculate your benefits, the formula used to calculate your benefits, an investment option or distribution opportunity denied. ERISA lays out a specific set of rules that plans must follow. You must comply as required by ERISA before the next step occurs. You cannot simply hire a Texas employment attorney and sue the plan. Also, you have to give the plan administrator an opportunity to review the decision and confirm its accuracy. Assuming you inquired about the focus of your...

Continue reading

401k Plan Fees – What Are They and Do They Matter?

Employers operate 401k plans at a cost. Like other labor expenses (hiring process, salary, vacation pay, etc.) employers have to pay for compliance with labor and employment laws. Benefit plans are somewhat unique. Under ERISA employers can shift the cost of plan administration from the plan sponsor to plan beneficiaries. 401k plan fees often are handled through revenue sharing with the financial institution operating the plan in which the administrator selected funds that would absorb the costs of the plan. After years of federal litigation challenging whether employers could select higher fee funds to absorb plan costs, many 401k plans...

Continue reading

401k Fee Disclosure: What Does It All Mean?

401k fee disclosure was a project in the works for many years, going back to the mid-2000s. Eventually the Department of Labor promised Congress it would create regulations requiring plans to disclosure fees charged by service providers. The purposes are two-fold. First, disclosures help plan administrators figure costs so they can assess whether fees are reasonable and shop for better deals. Second, the disclosures to participants is meant to better inform participants what they are paying for and help them see the fees paid for the different investments in their plans so they could make investment decisions with those fees in...

Continue reading
error: Content is protected !!