Little-Known 401(k) Fees

The Associated Press

Companies offering 401(k) plans are increasingly scrutinizing the fees they're charged by service providers as a result of lawsuits and government regulation.

Identifying fees can be tricky. Some are charged as flat dollar amounts, some others are charged as a percentage of invested assets.

There are numerous service fees that are paid out of 401(k) accounts, which are generally straightforward and easy to understand. But there are also several indirect fees that may be charged. Here's a rundown of the types of fees you should be aware of.

SERVICE FEES

1. Trustee. A 401(k) plan must name a trustee to handle contributions, plan investments and pay outs. An employer may handle this internally or hire an outside company.

2. Recordkeeping. This fee is charged for making sure transactions in a 401(k) program are credited to participant accounts accurately. This can be done in-house by an employer or hired out to a recordkeeping company.

3. Administration. Oversight of the retirement plan often covers accounting and legal services and may include access to customer service representatives, education, retirement planning software and electronic access to accounts. May be deducted from investment returns or charged as a percentage of a plan's assets.

4. Investment Advisory/Investment Management. Ongoing charges for managing assets of the investment fund. Usually charged as a percentage of assets invested.

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