Certainly the facts of this case suggest there was something fishy about the arrangement. However, it was not a development that occurred overnight and you can imagine how, over time, minor decisions related to costs and fees can compound into major problems for plan sponsors. Plan sponsors should make themselves keenly aware of what fees and expenses can and cannot be charged to the plan and also make inquiries about the reasonableness of fees. This case also serves as a reminder that regular review of fees (monitoring) is an important component of satisfying that fiduciary obligation and your plan should be reviewed on a regular basis to see if (1) you are being charged the correct amounts under your agreements, (2) those amounts are reasonable and (3) there are ways to reduces those fees. Otherwise, you might end up paying back the plan.
Now is the time to address the fees in your plan. July 1, 2012 is fast approaching.
Please comment or call to discuss.
- Rosenberg on Breach of Fiduciary Duty Claims Involving Excessive Fees after Tibble v. Edison International (lawprofessors.typepad.com)
- 401(k) Fee Disclosures: It’s Time for Employers to Prepare (401kplanadvisors.com)
- 5 Reasons to Shop Your 401(k) NOW (401kplanadvisors.com)