That's no 401k, that's my mother-in-law!
May 8, 2013 4:29 PM   Subscribe

How can I determine the hidden fees associated with my employee 401k through Prudential?

After watching this documentary and reading the comments, I'm curious to see how much my fees actually are for my employer-linked 401k with Prudential. I've gone up and down through the Prudential website, but haven't been able to find any information other than expense ratios. Is there a way to figure this out? I'm young, newly investing, and pretty naive about a lot of this stuff. I've read what I can, but I'm having trouble finding specific details about my specific investments.
posted by taltalim to Work & Money (6 answers total) 8 users marked this as a favorite
Best answer: A 401(k) plan must disclose fees and expenses once a year. Ask your HR representative to get you a copy of last year's disclosure.
posted by saeculorum at 4:35 PM on May 8, 2013 [1 favorite]

So, there are basically two ways they can get you as I understand it. One is through a fee inside the share class of whatever given mutual fund you are in that basically is a drag on fund performance. That's covered by the expense ratio of the share class you are in, and whether it has a sales load. If the fund you are invested in has a front-end or back-end load, or a suspiciously high expense ratio compared to a comparable fund, changes are you are being ripped off.

The other way would be some kind of account maintenance fee that would be taken out, either as a reduction of your initial contribution or a redemption out of the funds you are in. This should be fairly easy to see on your statement, as it should be broken out into a separate transaction.

But the expenses charged INSIDE the mutual fund are the big ones, and those are "hidden" because they just drag on the performance of the fund over time.
posted by selfnoise at 4:53 PM on May 8, 2013

Look for the prospectus for each fund you own. If you have online access to your account, you can probably find this information most easily by logging in to the site. In the prospectus, look for the "Net annual Fund operating expenses" to see what the annual expenses. For example, for this Prudential fund the fees total 0.99% to 1.99% of the value of your investment, anually, depending on the class of shares you own.
posted by mbrubeck at 5:01 PM on May 8, 2013

Sorry, I just re-read and saw that you already found the expense ratios. The prospectus also lists maximum fees charged by the fund, but saeculorum's suggestion might be a better way to get this information in an useful format.
posted by mbrubeck at 5:03 PM on May 8, 2013

Saeculorum has it. Within 401(k)s, separate from the mutual fund expense ratios are administrative fees. Talk to the plan administrator.
posted by banwa at 5:06 PM on May 8, 2013 [1 favorite]

Response by poster: Thank you all very much - in browsing through old work emails, I did manage to find a fee disclosure from last August. Saeculorum's advice is is exactly what I needed. Thank you all!
posted by taltalim at 7:35 AM on May 9, 2013

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