17 January 2018

Supreme Court May Weigh In On 401(k) Fees

#
Share This Story

Jerry Schlichter is a 401(k) hunter. He's a litigator who sues retirement plan sponsors for charging excessive fees to participants - and he goes after big game.

Schlichter has brought lawsuits against 14 large corporations since 2006 aimed at forcing them to change practices he contends cost retirement savers dearly. He has settled six of the cases, recovering $125 million for participants (before legal fees) and getting important agreements from plan sponsors to cut plan fees.

Now, one of Schlichter's pending cases may be taken up by the U.S. Supreme Court. If that happens, it would be the first time the high court has considered a case involving high 401(k) fees. A win there could force plan sponsors to take greater fiduciary responsibility for their plans.

The cost of workplace retirement investing has gotten more attention in recent years, especially since the rollout in 2012 of federal regulations requiring that fees be spelled out more clearly in quarterly statements sent to participants. Fees and expenses are one of the most important determinants of success in retirement saving. The U.S. Department of Labor calculates that a 1-percentage-point difference in costs for a 35-year-old worker could reduce a retiree's account balance by 28 percent at retirement age.

Click here for the full article in Reuters.

Join Our Online Community
Join the Better Way To Retire community and get access to applications, relevant research, groups and blogs. Let us help you Retire Better™
FamilyWealth Social News
Follow Us