Unlike the money belt pictured above, the dollars charged for 401(k) services will start to become more apparent under the recently published Department of Labor Interim Final Regulation on Improved Fee Disclosure.
Going forward, I’ll be commenting on the new rules as they start to impact service providers, plan sponsors, and employees. That’s I call the "who" and "how much" part of retirement plan fees.
But for now, don’ forget that there is also the "what" part which is subject to one of the basic qualification requirements. That is, the plan must be established and maintained by the employer for the "exclusive benefit" of the employees and beneficiaries.
That means that the plan cannot pay for expenses that are considered to be the responsibility of the employer. These are called "settlor" expenses. On the other hand, expenses that relate to the fiduciary’s administration of the plan can be paid out of plan assets. These are called "operational expenses".
You can find the details about what expenses can (and can’t) be paid with 401(k) plan assets in my recent column in Employee Benefit News.