Fees & Investments FAQs

Fees are "excessive" under ERISA when they're unreasonable for the services provided — often because a large plan failed to use its size to negotiate, or kept high-cost funds when cheaper, comparable options were available. Even small fee differences compound into large losses over a career.

• Excessive 401(k) Fees →
• 401(k) Fee Impact Calculator →

Recordkeeping fees pay for plan administration — statements, the website, the call center. They should generally be a reasonable, roughly flat amount per participant; courts have scrutinized plans paying far more than comparable plans for the same services.

• Recordkeeping Fee Litigation →

There's no fixed legal number — reasonableness depends on the plan's size and the services provided. As a rough reference, large plans can access very low-cost institutional investments and modest per-participant recordkeeping, so paying well above market is a common reason plans get reviewed.

Many costs aren't obvious — they're built into fund expense ratios or paid through "revenue sharing" between funds and the recordkeeper. The result is that participants often pay more than the headline fee suggests.

• Hidden 401(k) Fees →

An imprudent investment is one that a careful fiduciary, following a sound process, wouldn't have chosen or kept — for example, a fund that persistently underperforms cheaper, comparable alternatives. ERISA focuses on the decision-making process behind the choice.

• Underperforming Funds →

Self-dealing is when a fiduciary benefits itself instead of participants — for instance, a financial company stocking its own plan with in-house ("proprietary") funds that underperform while generating fees for the company.

• Self-Dealing & Proprietary Funds →