Employer Switches 401K...Employees Charged 2%

[Slothower]

What is the name of your state?What is the name of your state? VT

Recently the company I work for switched 401K plans. When our $ was withdrawn from our old 401K accounts to roll over into our new ones, we were all charged 2% in expenses from the old company. Is this standard practice?
Also, if it is, is our employer legally responsible for picking up those expenses since it was their choice to switch plans and we had no say in it?

 

[Beth3]

Administrative fees are typically paid out of the general assets of the Plan. So whether or not those fees show up specifically on each employee's statements, all the participants are "paying for" the investment management and administrative services fees, which is the case for any sort of investment fund. The people that manage the Plan and provide the service gotta get paid.

I can't tell you specifically whether this 2% fee being directly charged to the participants to roll over the funds to a new investment advisor is legal or not though. Give the federal DOL a call - they should be able to advise you. 202-693-4650.