A US law firm has found a new and growing revenue source; Suing businesses with 401k plans stocked with hidden and “not-so-hidden” fees deducted from employees’ 401k assets. This is not a minor issue. Millions of dollars are being skimmed and sliced off 401k plans’ assets daily across the country to pay various 401k providers and financial advisors.
We have written about this problem of 401k fees extensively. Our website is dedicated to the proposition that 401k fees should be illegal. Employers should pay the full freight for carrying the cost of the company’s 401k plan. Employers who have employees’ paying these fees are the ones getting sued.
There is no reason why the participants in the 401k plans should shoulder the cost of these plans. The people who save more money in the company’s 401k are shouldering more of the cost on a percentage basis. Does that seem fair?
This lawsuit seeking $10 Billion in damages may be the largest to date, but by no means is it the last one you will be reading about. This litigation represents the tip of a massive iceberg. More 401k participants begin to understand how they are being ripped off by 401k providers who skim fees from retirement savings. The growl you hear now will become an ear-splitting roar—Mark our words.