Fees and expenses have always been part of a retirement savings plan–some fees are covered by your employer, while others are paid by you based on the specific investments and services you choose.
General administrative services
Generally, there are three types of administrative costs:
- Recordkeeping, accounting and legal services
- Customer service support
- Ongoing participant communications
Specific investment services
Each investment offered in your plan has annual operating expenses and other fees. But, you pay only for the investments you actually use and in proportion to the amount of your investment. These fees are not deducted directly from your account; they are paid indirectly through the investment's expense ratio. You'll see these fees included in the cost of the specific investment.
You pay for personalized services only if you use the specific feature. For example, if your plan allows for loans and you apply for one, you may pay a one-time loan initiation fee or annual loan maintenance charges. These fees are charged directly to your account—if and when you use the service.