Benchmark Your 401(k) Fees
A recent study determined that 60%-70% of employees and 30% of senior finance and human resource professionals think their company’s 401(k) plan is free.
A consequence of this lack of knowledge is that employers were very complacent regarding the underlying costs of their plan. As a result, over the years most corporate 401(k) plans have fee structures that have come to be 20%-60% higher than necessary for the services being received.
The New Burden of Knowledge for Employers
Compounding this issue is that the new 401(k) fee disclosure regulations (ERISA §408(b)(2)) place significant responsibilities on employers to document, benchmark, and evaluate their company's 401(k) plan fees on an on-going basis. click for article published by the Michigan Association of CPAs
An employer's failure to document compliance and formally take steps to determine if 401(k) plan fees are reasonable can create a Prohibited Transaction under the laws governing 401(k) plans and result in excise taxes and other negative consequences.
Time and Money Saving Solution
To assist employers and trustees in evaluating and benchmarking their company's 401(k) plan in order to comply with the law, Cygnet utilizes the FeeInsight℠ retirement plan fee audit and 408(b)(2) compliance service developed by Fiduciary Firewall Consulting, Inc.
 Koski Research, survey conducted for Charles Schwab, 2011