It’s surprising how often I’ve heard that exact phrase or a variation on the question mentioned above over the years, but there are still people who think these 401 (k) plan providers and advisers are doing pro bono work. Let this be a wake-up call for those who really think that’s the case – the reality is, you ARE paying fees, but you probably don’t know how much those fees really are. Changes are coming into effect soon that will make these rates much more transparent to 401 (k) plan participants as well as plan sponsors.

How could people really think that? Due to a lack of compliance with rate disclosure requirements and a lack of uniformity in reporting across the industry among providers, it is clear why some people believe they are not paying any fees for their plan. However, as is often the case, a quality 401 (k) plan is NOT just about who has the lowest rate structure, but about the entire 401 (k) process and what it is designed to do ( very often forgotten) – helping people save effectively for retirement.

There should be a group of quality professionals who combine their efforts to handle all the important components of the 401 (k) plan. Advisors who will share fiduciary responsibility with the plan sponsor, TPA who know how to handle complex reporting requirements, providers who offer an open architecture platform of investment options, these and other professionals (ERISA attorneys, payroll providers, etc. .) are critical to making a 401 (k) plan the best possible plan for your employees. They must also have the quality of character not to charge excessive fees, but to charge what is appropriate given the market, the size of the plan (both the number of participants and the total dollars), and the amount of work done. After all, we all want to make a living in our professions, but it should not be at the expense of the best interests of our 401 (k) participants.

In closing, I want to make it very clear that it is okay to pay fees for your 401 (k) (or any other type of retirement plan you may have in your workplace: 403 (b), pension, 457, cash balance plan, etc.). We all pay something for these plans, whether we know it or not. Getting the clear value of a 401 (k) plan (saving for retirement and a reduction in taxable income) comes at a cost, but it’s whether or not we think those fees for all services provided are fair. Hopefully, with the advent of these new rate disclosure requirements, we can all feel confident about that part in the future and focus on the real reason for a 401 (k): helping people reach their retirement goals.