Low Fee 401(k) pricing is simple: You pay a one-time $495 plan setup fee upon staring your 401k plan, then pay the applicable annual fee listed below each year you want to use our plan-specific 401k plan. That's it. All 401k options, services and companion material are covered, including annual software updates, technical support, 401k plan conversions, and IRS reporting help.

Many 401k plans contain significant hidden fees. This is especially true of 401k plans offered to small companies, where it is easier to hide fees from small business owners, who are busy running their businesses and do not have the time or staff to review all the legal mumbo-jumbo of setting up a new plan or reviewing plan documents.

These hidden fees are being lifted from the back pockets of 401k plan participants. The US Department of Labor is trying to force 401k plan providers (banks, mutual fund companies, insurance companies, brokerages, etc.) to come clean about these hidden fees. But there is significant lobbying power at play to stymie the government's effort to force comprehensive 401k fee disclosure.

Here are the facts:

According to a recent study by the ICI (Investment Company Institute) and Deloitte titled, "Defined Contribution / 401(k) Fee Study". the average 401k plan has hidden fees of 0.72% per year. That may not seem like much, but it costs the average participant about $11,000 in hidden fees for the lifetime of his or her 401k. These fees are extracted directly from the 401k participant's account. In their study, ICI and Deloitte call these hidden fees "all-in" fees. The average hidden "all-in" fee of 0.72% equates to $350 per year, extracted from participants' accounts.

For small 401k plans that cover less than 20 employees and less than $1 million in total assets, the hidden "all-in" fee situation is much worse. For small 401k plan participants, hidden "all-in" fees can jump from 0.79% to a whopping 1.89%, or up to $920 per plan participant per year! For small plan participants, this can mean paying an astounding $28,000 in hidden fees for the lifetime of his or her 401k. See pages 6, 16, 19 and 20 of ICI/ Deloitte report by clicking the report cover. If you are selecting a 401k for your employees, did you know they could be unknowingly losing $350 to $920 a year in hidden fees?

In most 401k plans, large and small, the employer pays the 401k plan's annual record keeping fees. These fees vary; below is a representative sample of annual record keeping fees:

401k fees for a company with 15 employees & $1 million in assets...
Low Fee 401k		(www.low-fee-401k.com)	=	$695
401k Easy Online		(www.401k-easy-online.com)	=	$995
The Online 401k		(www.theonline401k.com)	=	$1,100
Wellington 401k		(www.wellington401k.com)	=	$1,350
Employee Fiduciary		(www.employeefiduciary.com)	=	$1,500
Sharebuilder 401k		(www.sharebuilder401k.com)	=	$1,800

...and how prices skyrocket when the "all-in" and hidden fees are disclosed...
Low Fee 401k	:	$695 + [No hidden "all-in" fees]	=	$695 per year complete!
401k Easy Online	:	$995 + [No hidden "all-in" fees]	=	$995 per year complete!
The Online 401k	:	$1,100 + ["all-in" fee of 0.72% to 1.89% of $1 million]	=	$8,300 to $20,000 per year
Wellington 401k	:	$1,350 + ["all-in" fee of 0.72% to 1.89% of $1 million]	=	$8,550 to $20,250 per year
Employee Fiduciary	:	$1,500 + ["all-in" fee of 0.72% to 1.89% of $1 million]	=	$8,700 to $20,400 per year
Sharebuilder 401k	:	$1,800 + ["all-in" fee of 0.72% to 1.89% of $1 million]	=	$9,000 to $20,700 per year

So it's not rocket science to understand why many plan providers in the 401k industry are blowing smoke to make any discussion about hidden or "all in" 401k fees confusing and bewildering. There is a great deal of money at stake, and all this smoke clouds the fact that many small employers are unknowingly offering their employees 401k plans laden with hidden fees.

Hidden and "all-in" 401k fees are getting noticed by the news media and the legal profession via class-action law suits, and some 401k plan providers that made fortunes mining hidden fees are now scrambling to cover their tracks. They are generating the kind of PR confusion many of us remember from years past, when major tobacco companies tried to explain to Americans that smoking was not hazardous their health. Many in the 401k industry are launching the same kind of PR assault, confusing and clouding the issue, but what is really at stake is the end of their 401k hidden fee gravy train, pure and simple.

We at Pension Systems Corporation have always worked hard to keep 401(k) plans as affordable as possible for our clients, many being small and very small companies.

Our policy is not to accept any rebates or revenue sharing of fees deducted from our clients' plan assets unless those fees can be returned to the plan, or used by Pension Systems Corporation to offset plan expenses. Entities that provide and support 401(k) plan investments, include mutual funds managers, fund distributors, asset custodians, asset trustees, investment brokers and advisors, and plan administrators and record-keepers. These entities typically earn at least a portion of their compensation from asset-based fees deducted from plan assets.

The Low Fee 401(k) is an exception to the norm in that we do not earn any compensation, either directly or indirectly, from our clients' 401(k) plan assets. If rebates are offered, we instead have the rebates returned to the client or directly applied to reducing our clients' costs. Our published prices, available online for all to see, are the only net compensation we collect.

Asset-based fees are an unavoidable fact of life if your company is using mutual funds or self-directed brokerage accounts for the 401(k). The cost of these asset-based fees must be included when determining the true, overall cost of a company's 401(k). By applying these fees to keep overall costs down, Pension Systems Corporation is doing its part to keep 401(k) plans as affordable as possible

According to Forbes Magazine, "Retirement Plans From Hell" 7/13/09 by Scott Woolley, hidden fees are a common occurrence in 401(k) plans offered by AIG, John Hancock, AXA Equitable, Lincoiln Financial, and other providers. The following are some excerpts from the article:

Early this year the woman overseeing the 401(k) plan for a rural Oregon company gathered her 25 colleagues together to hold an election. At stake: whether to continue paying AIG an annual 1.25% of assets to manage their 401(k) plan as part of an insurance contract, or switch to mutual funds costing a third less. No surprise that the proposal to convert passed easily.

Then the nasty surprises started popping up. As she sought to unwind the plan, the administrator discovered that AIG had been tacking on a variety of fees all along. One nicked employees for 2% annually when they borrowed money from their own 401(k) s--work the new plan was willing to do for a flat $50 a year.

To top it off, AIG said that many of the employees would have to wait five years to get back their entire nest eggs, with no choice but to keep paying the fees. AIG says such lockups are disclosed in its plan contracts and are shorter than the ones many other insurers impose.

The company's frustrated administrator, who agreed to talk only anonymously, says she's still baffled by the complex annuity contract. "We still don't have a good handle on what they're charging us," she says.

Like the Oregon outfit, lots of mostly small companies are finding out the hard way that the 401(k) plans they bought from insurance companies, usually set up as "group annuities," came with a variety of hard-to-find charges and lockups. Or, more aptly, the plans they were sold by people motivated by lavish commissions. Many hyped the product as a low- or no-cost proposition for employers while glossing over the fees charged to employees. A successful ruse it is. All told, insurers have lured 18,000 companies into parking $185 billion of 401(k) assets inside group annuities and similar insurance contracts, according to an analysis by Larkspur Data Resources of plans with under $250 million in assets.

"Insurance companies cater to the smaller, less sophisticated part of the market," says Robert Prall, managing partner of Rx Investment Solutions, which advises companies on how to build low-cost 401(k) plans. "Every time we've gone into a company that has a group variable annuity contract, no one has really understood how it worked."

One John Hancock group annuity contract allows it to skim off up to 5% of assets before the remains go to work for savers. That's on top of "trailer" commissions of up to 1.4% of assets annually for as long as the plan exists and "asset charges" of up to 4%. John Hancock says those maximum fees provide a distorted picture and that it offers a variety of competitive rates. Why then, you might ask, does another piece of fine print state that John Hancock makes no claim "that any expenses paid directly or indirectly by the plan are reasonable"?

"When it comes to fee abuse in retirement plans, you can put group annuities at the top of the list," says Daniel Maul, an investment advisor in Seattle, Wash. who helps small firms set up 401(k) programs.

Among 401(k) plans with assets of less than $250 million, group annuity-style menus account for 55% of the market and are sold by AXA Equitable, Lincoln Financial and other insurers. A few are like the deferred annuities sold outside retirement plans that combine some life insurance coverage with savings features. Those products typically offer investors a choice of mutual funds; the insurance takes the form of a pledge to pay their heirs what they put in if they meet with an untimely end at a point when the value of their assets has fallen. At the end of their careers, deferred annuity holders can receive their savings either as a lump sum or as annuity payments for life.

The annuity trappings do, however, mean that investors get hit up for higher fees. John Hancock's group annuity offers the JH American Funds Growth Fund of America at a cost of 0.91% annually. Other 401(k) investors can get an identical fund at less than half the cost.

An accountant at a five-person Texas firm was shocked to discover while looking through his 401(k) statements recently that AXA Equitable's group annuity was charging 1.69% annually to own its version of an S&P 500 index fund.

While insurance salesmen are free to present themselves as honest brokers, they are not required to regard themselves as fiduciaries with a legal obligation to put plan participants' interests first. Often they don't.

Among 401(k) plans designed for small companies, the total fees on some group annuities can top $1,000 per participant every year, or three times what low-cost 401(k) plans cost, according to data provider 401kSource. Have second thoughts after signing up and you'll discover that buying a group annuity is like joining the Sopranos.

"Surrender charges allow insurers to offer very generous commissions," explains Parker Payson of Employee Fiduciary, a Mobile, Ala. firm that sets up low-cost mutual-fund-based 401(k) plans for small companies. "The annuity provider wants to make sure the client is there long enough to recoup the commission."

Customers, for the most part, haven't evolved to the point where they know what's going on. Two-thirds of workers are unaware that they're paying anything for 401(k) plans, according to a 2007 survey by AARP.