The 401(k) fee issue continues to percolate. This time it’s 12b-1 fees, those fees charged by mutual funds to compensate underwriters and brokers for sales. And last year, it was $11 billion according to Securities and Exchange Commission estimates. It’s time for review said the SEC, and it announced last week  that it will hold a roundtable on June 19 to discuss so-called 12b-1 fees, which are also used to cover advertising and promotion and for mailing fund prospectuses.

This would be the first look by the SEC at 12b-1 fees since their inception in 1980. At that time, the mutual fund industry was still limping along from bear markets of the mid-1970s. The SEC provided a boost in the form of the 12b-1 fee to help mutual funds pay for marketing and distribution expenses justified on the basis that the fund operating expenses would be less if more investors could be attracted.SEC Chairman Christopher Cox said,

Today’s uses of 12b-1 fees have strayed from the original purposes underlying the rule, and it is time for a thorough re-evaluation.

The SEC could take one of a number of approaches ranging from better disclosure to outright repeal. And 401(k) plans will be part of the mix with over 40 million investors owning mutual fund shares through 401(k) plans.