Large 401(k) plans tend to be among the best run and least expensive for participants. Yet Schlichter already has lots of trophies on his wall: settlements with Bechtel, Caterpillar, Cigna, General Dynamics, International Paper and Kraft Foods. The core allegations in those cases involved imprudent investment options, excessive fees and misleading information about fees.
No matter how the pending cases conclude, they underscore a key fact that workers often don't understand: Plan participants bear most of the cost of their 401(k). "Your plan isn't free, and 99 percent of the time, the employer isn't paying the cost - you are," says Thom Clark, an expert in employee benefits law and partner at the Lowenbaum Partnership, a St. Louis law firm.
Schlichter says the recently introduced quarterly disclosure forms are helping workers understand fees, but he urges people to pay attention to the fees they are charged by workplace plans and compare them with published expense ratios for the same funds offered to the public.
"If it's more than 1 percent, they ought to be asking why that is - especially if they work for a very large company," he says. "Warren Buffett doesn't pay retail prices for stocks, and neither should the employee of a billion-dollar 401(k) plan."
(The opinions expressed here are those of the author, a columnist for Reuters)