California ERISA lawyers · 401(k) fees & denied benefitsA fraction of a percent, quietly, for thirty-five years.
Fees come out of a 401(k) every year, and they compound just as returns do. ERISA requires the people who run your plan to act solely in your interest and keep its expenses reasonable. It also protects the disability, pension, health and life benefits you earned at work. We handle both, exclusively for workers.
Move the fee. Watch the gap.
Hypothetical illustration, not your plan
Shown: the Department of Labor’s example. $25,000 today, nothing added, 35 years, and fees of 0.50% versus 1.50% a year (an extra 1.00%, or $10 more per $1,000 invested, every year).
- Plan A · 0.50% fees
- $226,556
- Plan B · 1.50% fees
- $162,846
- The quiet fraction costs
- $63,71028.1% less at retirement, from the same savings and the same investments.
AssumptionsA 7% average yearly return before fees. Plan A pays 0.50% a year in fees; Plan B pays the same plus the extra fee, so its return is lower by exactly that amount. Returns compound once a year; yearly additions arrive at the end of each year. No taxes, inflation, employer match or withdrawals. A teaching example, not a prediction, and not a statement about any employer’s plan.
SourceU.S. Department of Labor, “A Look at 401(k) Plan Fees” (Sept. 2019): $25,000 with 35 years to retirement, 7% average returns, fees of 0.5% versus 1.5%, no further contributions. The DOL rounds the results to $227,000 and $163,000 and says the 1 percent difference reduces the balance by 28 percent.
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Free Case Review401(k) fee investigations
Is your employer’s plan being investigated?
We are investigating whether participants in the 401(k) plans of the employers below were charged excessive fees. If you have, or used to have, money in one of these plans, its page explains what we are looking at and how to reach us.
An investigation is not a lawsuit, and no court has found that any of these employers did anything wrong.
- Caltech401(k) fee investigation
- Automobile Club (AAA)401(k) fee investigation
- HCL America401(k) fee investigation
- Block Inc401(k) fee investigation
- LPL Financial401(k) fee investigation
- City of Hope401(k) fee investigation
No match among our current investigations. That says nothing about your plan either way. Bring your plan’s fee disclosure to a free virtual consultation and we will look at it with you.
Not on the list? The duties below apply to the people who run most private employers’ plans. A free virtual consultation is a good place to start.
Read the fine print
Where fees hide
Five lines on a sample plan statement, read in plain English.
The chart above shows what fees can cost. This shows where to find them on your own paperwork: your plan’s fee disclosure and quarterly statement.
Each numbered mark on the sample document matches a numbered note.
Sample document — not any real planIllustrative figures
Sample documentNot any real plan
Example Co. Retirement Savings Plan
Fee Disclosure & Quarterly Statement
I Your account this quarter
- Beginning balance48,200.00
- Your contributions1,950.00
- Employer contributions975.00
- Investment gain (loss)1,312.40
- Fees and expenses deducted (see Part II)(41.25)
- Ending balance52,396.15
II Fees and expenses charged to your account
- Plan administrative expenses
- 1Recordkeeping & administrative services(22.50)
- Legal, audit & trustee services(6.25)
- Individual expenses
- Loan maintenance fee(12.50)
- Total charged this quarter(41.25)
2In addition, some of the plan’s administrative expenses for the preceding quarter were paid from the total annual operating expenses of one or more of the plan’s investment options (e.g., through revenue sharing arrangements, Rule 12b-1 fees, sub-transfer agent fees).
III Investment comparison chart (excerpt)
| 3Investment option | Share class | Expense ratio | Per $1,000 |
|---|---|---|---|
| Sample U.S. Stock Index Fund | Institutional | 0.04% | $0.40 |
| 4Sample Large-Company Growth Fund | Retail | 0.98% | $9.80 |
| Sample Target Date 2055 Fund | Collective trust | 0.42% | $4.20 |
| Sample Bond Fund | Investor | 0.55% | $5.50 |
| Sample Stable Value Fund | — | 0.36% | $3.60 |
Fees and expenses are only one of several factors to consider when making investment decisions. The cumulative effect of fees and expenses can substantially reduce the growth of your retirement account. Visit the U.S. Department of Labor’s website for an example demonstrating the long-term effect of fees and expenses.
Sample document — not any real plan. Created by Employees First Labor Law for education. Its names and numbers are invented and are not drawn from any employer’s plan.
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Stop 1 of 5
Recordkeeping & administrative fees
On the sample: “Recordkeeping & administrative services … (22.50)”
- In plain English
- The plan pays a company to keep the books: track every account, process paperwork, run the website and send statements. Some or all of that cost can be taken from your account as a dollar charge each quarter.
- Why it matters
- It is charged every quarter for as long as you are in the plan. A fee investigation asks whether what participants paid for these services was reasonable.
- The duty behind it
- Plan fiduciaries must act for the exclusive purpose of providing benefits and “defraying reasonable expenses of administering the plan.”29 U.S.C. § 1104(a)(1)(A)
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Stop 2 of 5
Revenue sharing
On the sample: “… paid from the total annual operating expenses … (e.g., through revenue sharing arrangements …)”
- In plain English
- Not every cost shows up as a dollar line. Part of what a fund charges through its expense ratio can be passed along to pay the plan’s recordkeeper or other service providers. That is revenue sharing.
- Why it matters
- The dollar fee on your statement may not be the whole cost of running the plan. To see the full picture, you look at the dollar charges and at what flows out of the funds.
- The duty behind it
- Federal rules require the quarterly statement to tell you when some administrative expenses were paid this way, and fiduciaries must act solely in participants’ interest.29 C.F.R. § 2550.404a-5(c)(2)(ii)(C) · 29 U.S.C. § 1104(a)(1)
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Stop 3 of 5
Expense ratios
On the sample: the “Expense ratio” column, from 0.04% to 0.98%
- In plain English
- The yearly cost of a fund, as a percentage of the money you have in it. It is not billed to you; it comes out of the fund’s returns, so it never appears as a charge.
- Why it matters
- It is charged on your whole balance, every year. On this sample, every $1,000 costs $0.40 a year in one fund and $9.80 in another.
- The duty behind it
- Fiduciaries must act with prudence, and have “a continuing duty to monitor trust investments and remove imprudent ones.” Even when you pick your own funds, they must independently evaluate what goes on the menu.29 U.S.C. § 1104(a)(1)(B) · Tibble v. Edison Int’l (2015) · Hughes v. Northwestern Univ. (2022)
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Stop 4 of 5
Share classes
On the sample: “Sample Large-Company Growth Fund · Retail · 0.98%”
- In plain English
- Many funds are sold in several share classes: the same portfolio and managers at different prices. A retail class is generally priced for individual investors; institutional classes often cost less.
- Why it matters
- One question a fee review asks is whether a plan offered a higher-priced class when a lower-priced class of the same fund was available to it.
- The duty behind it
- In Tibble, workers alleged their plan offered higher-priced retail-class funds when institutional classes were available. The Supreme Court did not decide that question; it held that the duty to monitor investments continues over time.Tibble v. Edison Int’l, 575 U.S. 523 (2015)
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Stop 5 of 5
The fine print itself
On the sample: “The cumulative effect of fees and expenses can substantially reduce the growth of your retirement account.”
- In plain English
- That sentence is required. Federal rules make your plan tell you, in writing, that fees add up over time, and point you to a Department of Labor example.
- Why it matters
- In the Labor Department’s own hypothetical, one extra percentage point of fees over 35 years leaves an account about 28% smaller. See it on the chart above.
- The duty behind it
- Plan administrators must give participants this fee information each year and the dollar fees charged each quarter.29 C.F.R. § 2550.404a-5(c), (d)(1)(iv)(A)(5)
Fiduciary duties
Who owes you what
The people who run your plan are fiduciaries. The law holds them to a high standard.Anyone with discretionary authority over how a plan is managed, how its money is invested or how it is administered is a fiduciary. At most companies that means a benefits or investment committee. ERISA gives them four core duties.
29 U.S.C. § 1002(21)(A); § 1104(a)(1)(A)–(D)Loyalty
Act solely in the interest of participants and beneficiaries, for the exclusive purpose of providing benefits and paying reasonable plan expenses.
Prudence
Use the care, skill, prudence and diligence that a prudent person familiar with these matters would use.
Diversification
Spread the plan’s investments to minimize the risk of large losses, unless it is clearly prudent not to.
The plan’s own rules
Follow the plan documents, as long as they are consistent with ERISA.
The duty does not end once the menu is chosen. Fiduciaries must keep watching, and remove investments that are no longer prudent.
Tibble v. Edison International (2015) · Hughes v. Northwestern University (2022)The Supreme Court has said fiduciaries have a continuing duty to monitor a plan’s investments, separate from choosing them carefully at the start. Offering some good options does not excuse keeping imprudent ones.
Not every high fee is a breach of duty. Whether a fee is unreasonable depends on the services the plan receives and the process its fiduciaries followed, which is what an investigation looks at. A fiduciary who breaches these duties can be held personally liable to restore the plan’s losses.
29 U.S.C. § 1109(a) · Guide: Fiduciary responsibilities under ERISA401(k) fee cases
How a fee case works
You bring it on behalf of the plan. The money goes back to the plan.A fee case is not a claim for your account alone. ERISA treats a breach of fiduciary duty as a harm to the plan, so the case is brought for the plan and any recovery is paid to the plan for the people in it.
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A participant brings the claim, for the plan
ERISA lets a participant sue for relief on behalf of the whole plan when its fiduciaries breach their duties.
29 U.S.C. § 1132(a)(2) -
Fiduciaries are asked to make the plan whole
A fiduciary who breaches is personally liable to make good the plan’s losses and to give back any profits made using plan assets.
29 U.S.C. § 1109(a) -
Any recovery returns to the plan
It is then allocated to participants’ accounts under the plan or the settlement’s terms, not paid to one person.
29 U.S.C. § 1109(a): losses are made good “to such plan”
Six years, or three from when you knew
A fiduciary-breach claim generally must be filed within six years of the last breach, or within three years of when you actually learned of it, if that comes first. If a breach was hidden by fraud or concealment, it is six years from discovery.
A fee disclosure you received but never read does not, by itself, start the three-year clock. The six-year limit still runs. 29 U.S.C. § 1113 · Intel v. Sulyma (2020)What a complaint must say
In 2025 the Supreme Court held that participants alleging a prohibited transaction, such as a plan paying a service provider, do not have to disprove the statute’s exemptions in their complaint. The defendants have to raise them. It is a ruling about pleading, not about who wins.
29 U.S.C. § 1106(a)(1)(C) · Cunningham v. Cornell University (2025)Who pays the lawyers
In an ERISA case the court may, in its discretion, order a reasonable attorney’s fee and costs, to either side. A participant generally must show some degree of success on the merits. It is up to the judge, never automatic.
29 U.S.C. § 1132(g)(1) · Hardt v. Reliance Standard (2010)Denied benefits
The other half of ERISA: a claim that was denied
Disability, pension, health and life coverage through work, and a clock that starts with the denial letter.When an employer-sponsored plan denies or cuts off a benefit, ERISA lets you sue to recover the benefits due under the plan, usually after you first appeal to the plan itself.
29 U.S.C. § 1132(a)(1)(B) · Guide: Understanding ERISALong- and short-term disability
An insurer denies, or stops paying, monthly benefits.
Pension & retirement
A denied application, or a dispute over vesting, service credit or the amount.
Health coverage
A denied claim under an employer’s health plan.
Life insurance
A denied claim on coverage provided through work.
The appeal clock
Federal rules set the minimum time to appeal a denial to the plan. Plans can allow more. Your denial letter should state your deadline: circle it, and plan to file well before it.
- Then the plan decides
Disability: within 45 days, with one 45-day extension possible. Most others: within 60 days, plus 60.
- If the plan breaks the rules
If a plan does not follow the claims rules, you may be treated as having exhausted the appeal and can go to court. For disability claims the plan must follow them strictly.
- Then, court
A lawsuit for the benefits due under the plan. These cases are generally decided by a judge, not a jury, and punitive damages are generally not available.
The appeal builds the record
Your appeal is usually your best, and sometimes only, chance to put evidence in the record a judge will later review.
- Ask for your claim file. On request, the plan must give you the relevant documents free of charge.
- Send what the denial says is missing: medical records, your doctors’ statements, the duties of your job.
- For disability claims filed after April 1, 2018, the plan must share any new evidence or reasoning before it decides your appeal, and give you time to respond.
California’s rule on discretion
For insured life and disability coverage of California residents, California law generally voids clauses that give the insurer discretion to decide your claim. That usually means a court looks at the denial fresh instead of deferring to the insurer.
Self-funded plans can be different, and whether a plan is insured turns on its documents. It is one of the first things we check.
Cal. Ins. Code § 10110.6Fired to stop a benefit?
It is illegal to fire, discipline or discriminate against you because you used a benefit, or to keep you from getting one, for example to keep a pension from vesting.
29 U.S.C. § 1140 (ERISA § 510)What to do now
Four things you can do this week
None of this costs anything, and all of it helps, whether your question is about fees or about a denied claim.
Find the fee pages
Look for your plan’s yearly fee disclosure, often called a participant fee disclosure or investment comparative chart, and the fee line on your quarterly statement. Each fund’s cost is listed as a percentage and as a cost per $1,000.
29 C.F.R. § 2550.404a-5Ask for the plan documents, in writing
The administrator must send the summary plan description, the latest annual report and the documents the plan operates under, and may charge a reasonable copying fee. If it does not respond within 30 days, a court may impose a penalty of up to $110 a day, in its discretion.
29 U.S.C. § 1024(b)(4), § 1132(c)(1); 29 C.F.R. § 2575.502c-1Keep every letter, and mark the date
Save each denial letter, the date you received it and everything you send. The appeal window is at least 60 or 180 days, and your letter sets the actual deadline.
29 C.F.R. § 2560.503-1(h)Talk it through with us
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Questions
ERISA, answered plainly
What is ERISA, and does it cover my plan?
ERISA is the federal law that governs most retirement and benefit plans offered by private employers: 401(k) and pension plans, and disability, health and life coverage provided through work. It generally does not apply to government plans such as CalPERS or CalSTRS, most church plans, or insurance you bought on your own. Those may be governed by state law instead.
29 U.S.C. § 1003(b)Can I sue over excessive fees in my 401(k)?
If the plan’s fiduciaries breached their duties, yes, but the claim is brought on behalf of the plan and any recovery goes back to the plan for participants’ accounts. Not every high fee is a breach; it depends on the services the plan receives and the process the fiduciaries followed.
29 U.S.C. §§ 1104, 1109, 1132(a)(2)My long-term disability claim was denied. What should I do?
Find the reason and the deadline in the letter; you have at least 180 days to appeal. Ask for your claim file, then use the appeal to add the evidence the denial says is missing. The appeal is usually what a judge will later review, so it is worth getting right. In California, insured disability policies generally cannot give the insurer discretion, so a court typically reviews the denial fresh.
29 C.F.R. § 2560.503-1(h)(4) · Cal. Ins. Code § 10110.6 · Guide: If your LTD claim is deniedHow long do I have?
To appeal a denial to the plan: at least 60 days for most plans and at least 180 days for disability and group health claims. Your letter states your deadline. To sue over fees or another fiduciary breach: generally six years from the breach, or three years from when you actually learned of it, if that is sooner. A plan can also set its own deadline to sue for benefits; for disability claims, the denial notice must state it.
29 C.F.R. § 2560.503-1(h), (j)(4) · 29 U.S.C. § 1113Are ERISA cases handled in state or federal court?
Most ERISA claims can be brought only in federal court. A claim for benefits due under the plan can be filed in state or federal court. ERISA cases are generally decided by a judge, not a jury, and punitive damages are generally not available.
29 U.S.C. § 1132(e)(1)Can my employer fire me to keep me from getting benefits?
No. ERISA makes it illegal to fire, discipline or discriminate against you because you used a benefit, or to interfere with a benefit you would otherwise earn. If that happened, other California employment claims may apply too.
29 U.S.C. § 1140 · Wrongful terminationWhat does it cost to talk with you?
The consultation is free and virtual. We work on contingency: our fee is a percentage of what we recover for you. How case costs are handled is spelled out in your written fee agreement.
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Bring what you have. We will read it with you.
A quarterly statement, a fee disclosure, a denial letter: any one of them is enough to start. Or call (310) 853-3461 · Lea esta página en españolAttorney advertising.Exclusively for workers, serving California since 2012.This page is general information, not legal advice. Contacting us does not create an attorney–client relationship.
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