Pushing to Uncover Hidden 401(k) Fees

— Illustration: Mark Matcho

Are you overlooking a "leak" in your 401(k) plan—one that could dribble away thousands of the dollars you'll be depending on for a comfortable retirement?

That leak comes from all the fees that can be levied on your account, year after year, for everything from money management to record keeping.

Unfortunately, only a handful of workers appear to understand what's going on: A poll sponsored by AARP found that 83 percent of workers don't know how much they pay in fees—and most do not realize that they pay fees at all.

Help may be on the way. The U.S. Department of Labor has proposed regulations that would require that workers receive clear and complete explanations of the fees imposed on their 401(k) accounts.

"We decided to do this ... because of a growing sense that [workers] weren't getting enough information," says Bradford P. Campbell, assistant secretary, Employee Benefits Security Administration. They get either "too little information, scattered all over the place, or too much," as in fat mutual fund prospectuses, he says.

Campbell says the department grappled with how to write rules that will produce information that workers can understand but are also complete and accurate.

If Labor falls short, members of Congress are crafting legislation on the issue.

"I'm sure that many workers, if they knew about these fees, would not be willing to pay them," George Miller, D-Calif., chairman of the House Education and Labor Committee, said recently.

For more information, get the pamphlet "A Look at 401(k) Plan Fees" by calling toll-free 1-866-444-3272. Or go to www.aarp.org/money/financial_planning and under "Retirement Planning" click on "Fees, Fees, and More 401(k) Fees."