According to a recent Supreme Court ruling, employers may now be at risk of being sued by individual 401(k) participants. Justice John Stevens has ruled that ERISA authorizes recovery for fiduciary breaches that impair the value of plan assets in a participant's individual account.
Since excessive 401(k) fees can certainly decrease the value of a participant’s plan assets, this ruling may put many employers at risk of potential lawsuits.
Many employers are not aware that they need to take these steps and many would have difficulty answering questions from their participants regarding the costs they are currently paying. Participants are even more in the dark as evidenced by a Government Accountability Office study and three pending bills in the House and Senate regarding fee disclosure.
An independent Employee Retirement Income Security Act of 1974 (ERISA) fiduciary, wealthcare capital management, is offering protection to both employers and participants regarding this issue.
Participants who are concerned that their 401(k) fees may be high are being offered a free and confidential ‘401k Fee Protection Service’, which uses a non-obtrusive approach to get employers to act, without triggering government involvement.