gaken
My wife's employer, a large healthcare-related nonprofit, swtiched to a new 403-B provider at the start of the year. We were displeased in that itself, as it meant TIAA-CREF was being removed as a plan option -- an organization that I felt was an excellent choice for her retirement money. Nevertheless, the new provider had Oakmark Equity and Income (a clone of the retail fund I would guess) as an investment option, which after some research I considered to be a pretty good choice for her going forward. But now comes a really rude surprise adding not just insult, but injury, to injury. Shortly after the second quarter my wife gets this e-mail from her human resources/benefits department which in effect says -- on by the way, there is a $110 annual fee for your 403-B account deducted in quarterly installements of $27.50. What was really insulting to our intelligence was how they justified the fee -- saying that it was fixed and a better bargain than the internal expenses we incurred with the previous TIAA-CREF funds (which are in fact better than Vanguard in terms of their low cost). No mention whatsover was made of this fee in the transitionary period before the change of providers was implemented. I've looked at the "educational" materials that were provided to my wife, and I can't even find any mention of it in the small print.
I think at best this reflects a degree of incompetence and sloppiness on the part of the human resources/benefits department. At worst, I think there may be something a little bit "cozy" going on behind the scenes with the new provider.
Anyway, my question on the floor is -- first of all, did my wife's employer fail in a fiduciary responsibility by not disclosing this fee early on? I think it's big enough that it might have made a difference in employees' decision making process -- whether to continue paricipating at the same level or at all, or to weigh the pros and cons of other options -- such as diverting some of their funds to a Roth IRA. Secondly, if there is a breach of fiduciary responsiblity here, what are the options in terms of contacting regulatory authroities, etc.
My wife does receive a match on a percentage of her contributions, and for that reason we will "suck it up" and continue to participate. However we feel this fee stinks and believe it is unreasonably high -- especially since the previous provider, TIAA-CREF, did not charge one at all.
Feedback welcome.
I think at best this reflects a degree of incompetence and sloppiness on the part of the human resources/benefits department. At worst, I think there may be something a little bit "cozy" going on behind the scenes with the new provider.
Anyway, my question on the floor is -- first of all, did my wife's employer fail in a fiduciary responsibility by not disclosing this fee early on? I think it's big enough that it might have made a difference in employees' decision making process -- whether to continue paricipating at the same level or at all, or to weigh the pros and cons of other options -- such as diverting some of their funds to a Roth IRA. Secondly, if there is a breach of fiduciary responsiblity here, what are the options in terms of contacting regulatory authroities, etc.
My wife does receive a match on a percentage of her contributions, and for that reason we will "suck it up" and continue to participate. However we feel this fee stinks and believe it is unreasonably high -- especially since the previous provider, TIAA-CREF, did not charge one at all.
Feedback welcome.