A three part series by Bloomberg TV originally aired on 6/19/2008 reveals “The Truth Behind Hidden Fees in 401k Plans.”

According to a survey conducted in 2007 of those who have 401k retirement accounts, 8 out of 10 people are completely unaware of the cost of their management fees. The fees are buried in fine print and so confusing, they may as well be written in a foreign language.

Plan managers can levy as many as 17 different fees against your plan according to The U.S. Department of Labor. Fees such as Wrap fees, Revenue Sharing, Surrender Charges, Finder fees, 12b-1 fees, Soft Dollars, and Shelf fees are just some of the fees levied against your account.

These are just a few of the fees charged by brokers or management to 401k retirement accounts. What you don’t know can and does hurt you!

401k account savings should compound over a period of time to make a comfortable retirement nest egg. Most of us are unaware how much of our savings is offset by management fees. At 2%, over a period of time, as much as half of your savings can be eroded according to Ted Benna of Malvern Benefits Corporation.

Edward Siedel- SEC Investment Management Division tells us that excessive 401k fees have become “epidemic”. He has seen fees in excess of 3%-5% and tells us that fees this high can “kill a retirement nest egg!”

401k fees need to climb a lot higher says SEC Chairman Cox, or more and more Americans will be forced to work in their Golden Years. “Pension plans are going the way of the 8 track tape” he warns.

With about 3 trillion dollars in 401k investment plans, Americans should take notice and ask questions. Burton G. Malkiel PhD of Princeton University tells us that financial institutions and insurance companies aren’t obligated to disclose management fees and often when they do, it’s done in such an obscure way that it is very difficult to understand.

People should be aware of the fact that 401k fees can make the difference between eating cat food or cordon blue in their retirement years. Unless laws governing disclosure rates change in the near future, there is not much you can do except ask questions.

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Ask your broker about your 401k fees. Don’t put all your nest eggs in one basket. Having a 401k, with social security and a small business can help you hedge your bet against receding assets in what should be your “Golden Years”.

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