Feature
FAIRNESS FOR
DEFINED CONTRIBUTION FEES
By Daniel Sharpe, Bond, Schoeneck and King, PLLC
T
here has been a tremendous
amount of focus on participantassessed fees in 401(k) and
403(b) plans over the last couple of years.
This has come about, in part, because of
lawsuits and the Department of Labor
(DOL) regulations that require greater fee
disclosures to both plan administrators
and participants. While it has been
slow to develop, the focus on fees is
a natural progression from traditional
pension and profit sharing plans, where
employers paid most of the expenses, to
401(k) plans as the primary source of
retirement benefits where participant
accounts and plan assets pay the lion’s
share of administrative costs.
Plan administrative committees who
ignore these issues could find themselves
busy as defendants in excessive fee
lawsuits. It’s far better to respond to
the emphasis on fees in several ways
that will reduce fiduciary risk. In 2012,
16 | SPRING
SUMMER
2014
2013
the effective date arrived for service
providers to deliver fee information