Unanticipated 401K Fees

[Guest chuck53]

A year ago our company entered into Chapter 11 bankruptcy and the workforce has been reduced from around 100 employees to less than 10. Recently, we found that our plan administrator had levied over $800 and in some cases $1500 against each of our personal dwindling 401K balances without prior notification. Since we had not encountered fees before the bankruptcy is it legal for the administrator to levy fees without representing or notifying us beforehand? Secondly, please consider our dilemma where we risk losing our savings and the only recourse is to leave the company and seek employment elsewhere allowing us to rollover the plan to an IRA or another plan. What are our options in what appears to be excessive fees and perhaps illegal intervention of our 401K savings plan? What are the requirements that the administrator must convey to allow such large fees? If this is indeed inappropriate, under what terms may we contact the savings institution and notify them of the transgression by our administrator?

[Guest JimJ]

If your company is no longer able to pay the fees, than there may be no other alternative but to take fees from the trust. Your current recordkeeper/administrator is entitled to be compensated for the services they have provided and will continue to provide into the future. I would hope that they have received permission before the actual fees were spread among plan assets. You should contact the person responsible for the plan. In some cases, the service agreement between your company and the service provider will have a clause that states upaid fees will be allocated to participant accounts after a certain period of time.