We all know saving for retirement is an important part of life. With a 401(k) plan, we take our hard-earned money and stash it away for when we will inevitably need it later. You may be given the opportunity to save through an employer-sponsored 401(k) plan, but that doesn’t necessarily mean your employer is acting in your best interest.
Employer Sponsored 401(k) Plans
Some companies provide employer-sponsored 401(k) plans, which is often offered to employees at a low cost. With this type of retirement plan, employees are given the option to take some of his or her earnings and place it in a retirement fund before taxes are deducted. It is generally an easy way to immediately save money out of a paycheck. Some employers may also choose to match a portion or even all of their employees’ contributions.
Is My Employer Being Fair?
When it comes to employer-sponsored retirement plans, the employer is required by law to act in the best interest of its employees, also known as a “fiduciary duty.” This means it is the employer’s obligation to find the best rates for financial services and products for its employees and must continue to shop rates to ensure the investments are sound. Unfortunately, this doesn’t always happen. In fact, a 401(k) lawsuit was recently filed against Morgan Stanley, a major financial firm, over accusations that it completely mismanaged employee’s 401(k) funds.
If you do have an employer-sponsored 401(k) plan, the sponsor (aka your employer) must do the following:
- Notify you of all expenses associated with the plan. These costs may be passed along to you, and that information must be disclosed.
- Act prudently by shopping around to ensure the investments are sound and provided at the best rate.
- Ensure fees for administrative work are reasonable for the employees.
As you look ahead, you want to be sure your retirement plan is working for you—not some other entity. Money placed in your 401(k) is money you earned and money you deserve. For a free case evaluation regarding your employer-sponsored 401(k) plan, call the attorneys at The Ruth Law Team at (888) 783-8378 to discuss your options.