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401(k) Reform

Keeping your company's program transparent.

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This story appears in the May 2007 issue of Entrepreneur. Subscribe »

With so many Americans depending on 401(k) programs to fund their retirements, it's no surprise that the plans are coming under scrutiny. The same charges of exorbitant fees and lack of transparency that plagued the mutual fund industry are now being leveled at 401(k) programs--only this time it's employers who are bearing the brunt of the criticism.

"Class action lawsuits have been filed against 12 companies alleging that the parties at the companies overseeing the plans were asleep at the switch," says Greg Ash, partner and chair in the employee benefits practice of Kansas City, Missouri-based Spencer Fane Britt & Browne LLP. "They are charged with not understanding or monitoring where the 401(k) money was going--who was being paid and how much--and in some cases even actively concealing information from participants."

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