Released: April 22, 2007

What they are taking from your 401(k)?

Source: Kathleen Day, Washington Post (Free Registration)

Like 47 million other U.S. workers, software engineer Don Sengpiehl is counting on retirement money invested in a company-sponsored 401(k) savings plan.

But ask Sengpiehl how much that plan costs, and the 54-year-old Loudoun County resident—who studied math at Massachusetts Institute of Technology—won’t be able to do much more than guess. Disclosures about 401(k) fees bewilder him, and he says he doesn’t have the time or know-how to figure out what he’s being charged, much less to monitor whether his employer is pushing for the lowest possible fees.

“I basically set it up, put it in motion and hope for the best,” he said.

Many workers share Sengpiehl’s ignorance about retirement plan fees, even as 401(k)s have become the dominant retirement savings vehicle offered by corporate America. Financial industry executives, consumer groups and federal regulators say that confusing and often fragmentary disclosures by employers and 401(k) managers make it hard for most workers to understand what they’re being charged.

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