The Wall Street Journal has an article today about how small 401(k) plans often pay big fees. In an effort to ensure transparency, the Committee passed the 401(k) Fair Disclosure and Pension Security Act of 2009 to the House floor in June of this year. This bill will help small business owners like Mr. Maccani:
Some small employers say that it’s difficult to get a handle on exactly what they pay in fees, and that it often requires digging through documents or calling the various parties involved.We encourage you to read the entire article and learn more about the 401(k) Fair Disclosure and Pension Security Act of 2009.
Gordon Maccani, chief executive of Digital Telecommunications Corp., in Van Nuys, Calif., says he thought he was paying only $3,600 a year to a third-party recordkeeper to manage his company’s 15-year-old 401(k) plan, which has about $920,000 in assets and 38 participants.
But Mr. Maccani says he recently started reviewing his annual plan statements from Transamerica Retirement Services and noticed there’s an array of other fees paid out of assets, including a 1.2% “contract asset fee,” $8,500 in “charges and fees” and about $1,400 in partner distribution fees. He originally didn’t get a clear answer, he says, when he called the company to inquire. But Transamerica called Mr. Maccani and gave him a comprehensive fee breakdown after being contacted by The Wall Street Journal. The company is a unit of Transamerica Life Insurance Co., owned by Aegon NV, a multinational Dutch insurance firm.
Transamerica’s recently provided breakdown shows Digital Telecommunications’ 401(k) plan actually paid about $16,300 in fees last year.
