It can be hard to make sense of the fees that can accompany a typical 401(k), and that confusion can carry a steep price tag. In 2012, for example, a study from the public policy think tank Demos found that fees can cost a median-income two-earner family nearly $155,000 in lost savings, eating up nearly one-third of their investment returns.
But the cost of investing in a workplace retirement plan, like a 401(k), might not be so high, says attorney Jerome Schlichter, if some businesses paid closer attention. Employers have a legal obligation to follow what’s known as the fiduciary standard — meaning they must put their employees’ interests before any other consideration — but that’s not always what happens, according to Schlichter.
With more than $6 trillion invested by Americans in 401(k)-type plans, the Supreme Court has chosen to get involved. Last week, the high court heard arguments in a class-action case by Schlichter that could help decide whether workers can sue their employer for failing to meet its fiduciary duty.