Time for Sponsors to Reconsider 401(k) Expenses Employee Benefit News (09/01) Vol. 15, No. 10 p.49; Ford, Elliot
Plan sponsors continue to overlook internal cost when assessing the overall quality and performance of their clients' 401(k) plans. Typically, the plan participant pays the investment expenses, which are deducted periodically from the returns of the accounts rather than itemized separately. Investment expenses are thus "hidden expenses" and plan sponsors need to know that the expenses are made up of separate components. Plan sponsors can best serve their plan participants by making sure that they completely understand all of the plan's features, especially hidden expenses, before choosing their next 401(k) plan provider.