Who pays your 401(k) plan expenses?

Paige

Are they paid by the employees or by the company?

deltadays

Our employees contribute to our 401K plan. I think all 401Ks are employee driven, but I'm not that knowledgeable otherwise I would have a heck of allot more than I do now. Contributions which are deducted each paycheck may not exceed 12% of gross wages. Our company does contribute based on company's profits on a quarterly basis. Since we haven't been that profitable, it's not worth talking about. Our plan offers some 12 options for investments from low to high risk.

Paige

I'm talking about just expenses--asset-based fees, etc. Are they divided up amongst the employees and taken out of their accounts or paid by the company?

deltadays

Sorry! Paid by the company.

Pork

[font size="1" color="#FF0000"]LAST EDITED ON 07-15-04 AT 03:19PM (CST)[/font][br][br]PAIGE: Expenses of the 401K plan can be paid by both the employee participants or by the employer. As I wrote on a previous thread to this subject, you should be able to read from your Plan Document the rules as established by the plan. Sometimes the company will pay and then reduce their subject profit sharing amount by the expense amount. Our company says they pay for all expenses, but there is no way to tell that this is true, because one does not know the amount decided by the company to award as a subjective amount of contribution. Now, if your company does not, at the end of the year contribute an additional profit sharing amount then the plan most likely reads that the employee participants pay for the expense of the plan. Three weeks ago, I had a reduction of the total number of shares assigned to my account reduced. I watch it every day, so I know what is happening so I can explain to our employee members. I called the plan administrator our CFO, he did not know why my shares were reduced, so he called the 3rd party administrator and got a response that there was an expense charged to all participants based on % value of the total plan amount. All participants were charged and their share value reduced by the % share of the overall plan value. Most participants would not know this because they get an invoice/statement quarterly. Expenses are one of those items that is a concern ever where.

Ask your question of your 3rd party administrator or your CFO or read it for yourself from the approved 401K Plan Document, which should be in the hands of the plan administrator, CFO, of the Dir of Benefits/manager.

PORK

Paige

Good to get some feedback from folks.

I'm already aware that our participants pay administrative fees--I just wanted to get an idea of whether it was common for the company to pay for the fees or to pass it along to participants.

Sounds like some companies pay, some pass it along. Works for me.

Beave

Employees here. Employees in my previous life as well.

Kiwi

Account administration fees are taken out of the participants' accounts by the plan administrator. The company pays for expenses that cover the whole plan, such as non-discrim testing and 5500 preparation.

qsausagelm

We (the Company) pay all admin. fees to include loan processing fees.

Nicole

Up until June 1, 2004 when we converted to an ESOP, the company paid all fees to maintain the 401(k) plan.

Since the company will no longer be making any contributions to the 401(k) plan (all profits will now be used to pay off the ESOP loan)the fees will be paid by the employees on a basis point fee schedule.

DeidreFR5

Our company pays administrative fees, loan fees are withdrawn from the loan amount.

ScorpioHR

Company pays all fee's.