Your 401(k) Plan: Costs, Compliance and Fiduciary Responsibility

Independent guidance for 401(k) plan sponsors on costs, compliance, and fiduciary responsibility.

Most 401(k) plans have not been independently reviewed in years. Fees have drifted. The investment menu has not changed. Nobody has checked whether the plan document reflects what the law now requires.

If you sponsor a 401(k) plan, you are personally responsible — under ERISA — for making sure it is running prudently. That responsibility does not sit with your plan provider. It sits with you.

An independent 401(k) plan review gives you a clear, documented picture of where your plan stands — and what to do about it.

Most 401(k) plans were designed when the company was smaller, the workforce looked different, and the regulatory landscape was less demanding. The matching formula seemed reasonable at the time. The record-keeper said everything was fine.

The problem is that nobody has questioned any of it since.

Meanwhile, several things have quietly gone wrong:

• Fees have drifted upward. Revenue sharing arrangements have changed. Your current costs may be well above market rate — and nobody has told you, because your provider has no incentive to.
• The investment menu is the same one you started with. Some of those funds may be underperforming their benchmarks. Others may have been superseded by better, lower-cost alternatives.
• The SECURE 2.0 Act introduced significant changes across 2024, 2025, and 2026. Some of those changes required plan document amendments and payroll system updates. Whether yours have been handled correctly is worth confirming.
• Participation rates may have fallen below industry benchmarks — a sign of plan design problems that are addressable, but only if you know they exist.

None of this is unusual. It is the natural result of treating a 401(k) plan as infrastructure rather than a benefit that needs active stewardship.

ERISA imposes personal fiduciary liability on anyone who exercises discretionary authority over a 401(k) plan’s management or assets. If you are the plan sponsor — or if you serve on a benefits or investment committee — that means you.

Fiduciary status under ERISA is functional, not formal. You do not need to be named in the plan document to carry the liability. You carry it by virtue of the decisions you make.

The core obligations are:

• You must act as a prudent expert would when managing the plan — not simply rely on the judgement of the plan’s service providers.: Duty of prudence
• Every decision must be made solely in the interest of plan participants. Your own convenience, or your provider’s commercial interests, cannot be a factor.: Duty of loyalty
• You must administer the plan in accordance with its written terms — which must themselves comply with current law.: Duty to follow the plan document
• The plan’s investment options must be sufficiently diversified to minimise the risk of large losses.: Duty to diversify
• You must ensure all plan fees — including those paid to advisors, record-keepers, and investment providers — are reasonable for the services provided. This requires evidence, not assumption.: Duty to pay only reasonable expenses

The most important word in all of this is ‘documented’. The DOL does not audit the intentions of plan sponsors. It audits the evidence. Without a written record of prudent decision-making — fee reviews, investment monitoring, plan document updates — you have no defence, regardless of how conscientious you have been.

Read more: 401(k) Fiduciary Duties — What Every Plan Sponsor Needs to Know

A thorough 401(k) plan review looks at six areas. Each represents both a common problem area and a fiduciary obligation.

What are you actually paying for record-keeping, trustee services, and TPA administration? Most plan sponsors have a rough figure but not a documented breakdown. Fee disclosure requirements mean the numbers exist — they just need to be reviewed and benchmarked against market rates.

Hard dollar costs — expense ratios and explicit charges — are visible on fund fact sheets. Soft dollar costs — revenue sharing, 12b-1 fees, and indirect payments to plan advisors — often are not. Understanding both is essential to knowing what your plan actually costs.

When did you last formally benchmark your advisor’s compensation against the services they provide? ERISA does not require advisors to be inexpensive. It requires them to provide reasonable value. Without a documented review, you cannot evidence that standard has been met.

A prudent investment review process requires written documentation: an Investment Policy Statement, meeting minutes, and a record of the rationale for investment decisions. Verbal reviews and informal discussions do not constitute sufficient evidence under ERISA.

What is your plan’s participation rate? How does it compare to industry benchmarks? Low participation is often a symptom of plan design problems — an insufficient employer match, no auto-enrolment, or a confusing investment menu. A review identifies the design changes that would improve outcomes without increasing employer cost.

SECURE 2.0 introduced significant requirements across 2024, 2025, and 2026 — including mandatory Roth catch-up contributions for high earners, updated auto-enrolment rules, and emergency savings provisions. A plan review confirms that your plan document and payroll configuration reflect current requirements, not those of two or three years ago.

Six questions. Under three minutes. A scored result that tells you exactly where your plan stands — and what to do next.

The scorecard covers all six areas of plan health outlined above. Your result is instant, personalised, and — depending on your score — will route you to the right next step.

ERISA Advisory Group has operated as an independent fiduciary since 1995. We do not sell investment products, receive revenue sharing from fund providers, or take referral fees from service providers. Our advice is purely fiduciary.

That independence matters. When your plan advisor is paid by the fund provider, their interests and yours are not the same. When your record-keeper reviews your plan, they are reviewing work they produced. An independent review removes that conflict entirely.

Our 401(k) plan review services cover:

• Comprehensive independent analysis of plan design, fees, investments, and participant outcomes — with a full written report and actionable recommendations.: 401(k) Plan Design & Efficiency Review
• A structured 60-minute independent review for plan sponsors who have completed the Health Check scorecard and want to understand their results in depth.: Plan Health Check Assessment
• Annual independent review engagements that maintain your plan’s compliance position and keep your fiduciary documentation current.: Ongoing fiduciary governance

We work with plan sponsors across industries and company sizes. Our fiduciaries have personally managed the audit response process, defended plans under DOL investigation, and corrected plans that had accumulated years of compliance gaps.

The SECURE 2.0 Act of 2022 introduced changes across multiple plan years. Several provisions that took effect in 2025 and 2026 have payroll and plan document implications that many sponsors have not fully confirmed.

The most operationally significant for 2026:

• Plan participants with FICA wages exceeding $150,000 in the prior year must make catch-up contributions on a Roth (after-tax) basis only. This is not just a plan document change — it requires payroll system configuration. Plans processing these contributions as pre-tax are generating errors with every pay cycle.: Mandatory Roth catch-up contributions
• New 401(k) plans established after 29 December 2022 must include automatic enrolment at a minimum deferral rate of 3%, with auto-escalation to at least 10%.: Updated auto-enrolment requirements
• Plans may now allow participants to make withdrawals from a linked emergency savings account without the normal early withdrawal penalty. Whether your plan has adopted this provision — and whether it is correctly documented — should be confirmed.: Emergency savings provisions

If your plan document has been updated but you have not independently confirmed that your payroll provider and TPA are processing contributions correctly, that confirmation is worth getting in writing before the next pay cycle.

Read more: The SECURE 2.0 Roth Catch-Up Contribution Rules Are Live — Is Your Plan Ready?

A complete 401(k) plan review with ERISA Advisory Group follows a structured five-to-six-week process.

A kickoff call with your team, followed by a data request covering plan documents, fee disclosures, investment statements, and Form 5500 filings. We review your existing documentation and conduct stakeholder interviews where relevant.

We evaluate your plan design against current best practices, benchmark your fees against peer plans, review investment performance and menu construction, assess your compliance position, and calculate the financial impact of any recommended changes.

A preliminary findings call presents our initial conclusions and gives you the opportunity to ask questions and provide context. We refine our recommendations accordingly before producing the final report.

The final report covers: fee benchmarking findings, investment review conclusions, compliance gaps and corrections required, plan design recommendations, five-year cost projections, and an implementation roadmap. We deliver the report in a presentation session and remain available for follow-up questions.

From the ERISA Insights blog:

• 401(k) Fiduciary Duties: What Every Plan Sponsor Needs to Know
• The SECURE 2.0 Roth Catch-Up Contribution Rules Are Live — Is Your Plan Ready?

Our Services:

• 401(k) Plan Design & Efficiency Review
• 401(k) Plan Health Check
• 3(16) Plan Administrator Services
• ERISA Fiduciary Training Programme

If you sponsor a 401(k) plan, you have a legal obligation to manage it prudently — and a documented record to prove it. The Health Check takes three minutes and gives you an immediate, scored picture of where your plan stands across six critical areas.

(925) 250-4030 | info@erisaadvisorygroup.com