Thursday, October 12, 2006

401(k) Fees - Documented or Defendant

There couldn't be a better time to ask your service provider to help you document how your employer/employees 401(k) dollars are being spent. Take a minute to familiarize yourself with Plan fees using these resources;DOL Plan fees , 401khelpcenter Collected Wisdom on Plan Fees,or CIEBA Plan Fees , then send a request like this to your 401(k) service provider.

Dear Service Provider,

Pension plan fiduciaries are responsible for selecting and monitoring both their plan service providers and the investment options that are made available to their plan participants. Responsible plan fiduciaries must ensure that the compensation paid directly or indirectly to their service provider is reasonable, taking into account the services being provided to the plan as well as other fees or compensation received by the provider in connection with the investment of plan assets.

The Department of Labor has consistently taken the position that plan fiduciaries must obtain sufficient information regarding fees or other compensation that service providers receive related to the plan's investments and then must make an informed judgement as to whether the service provider's compensation is reasonable.

Recent litigation has placed renewed emphasis on these fiduciary responsibilities and the attendant demand for full disclosure and transparency of all Plan fees, expenses and revenues received by any Plan service provider. Therefore, we request you complete the attached fee disclosure worksheets for the XYZ 401(k)Plan as of September 30, 2006.

The intent of the attached DOL Fee Disclosure Worksheets , or ASPPA Fee Disclosure Worksheet or 401khelpcenter Annual Service Provider Disclosure Worksheet is to confirm the hard dollar fees paid directly by either Plan participants or the Plan sponsor and to identify any additional soft dollar or intermediary fees which your organization may receive related to your service or investment relationship with the Plan. The completed worksheets should reflect the total actual or estimated fees for the Plan and any revenues which your organization receives related to your servicing relationship with the Plan.




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