Hidden Fees as a Source of Fiduciary Risk in Defined Contribution Plans

The Employment Retirement Income Security Act (ERISA) requires various disclosures be made to pension plan participants. These disclosures are required to ensure that plan participants are able to make informed decisions regarding their investment choices, for the plan to remain a tax-qualified plan under the Internal Revenue Code (IRC), and to provide fiduciary protection. The intricacies of the fees require plan sponsors to be particularly diligent that they understand the fees and are able to clearly disclose them in a manner that allows participants to make appropriate choices. This paper will examine fiduciary and disclosure rules as they apply to IRC 401(k) plans to determine if such rules are able to provide full fee transparency