With the elimination of most private pension plans, a 401(k) is the only thing that most people have for their inevitable retirement. Because of the central role 401(k)s play in Americans’ financial security, Congress passed a federal law called ERISA that establishes what are called fiduciary duties—the highest duties under law—to ensure that 401(k) & other retirement plans are managed prudently under the law. That means companies that sponsor 401(k) plans must go to lengths to make sure 401(k) participants are not short-changed out of their 401(k) savings by, for example, offering products with excessive fees or risky investments.

Offering investments products with excessive fees is one of the most common ways 401(k) savings are eroded. Many fees are hidden or undisclosed, especially in a rising stock market. Some fees are paid directly by participants, while others are charged indirectly. In some cases, these fees are charged for improper purposes—to enrich plan fiduciaries or service providers at the expense of Americans. Excessive fees over time can slash 401(k) balances by a third or more.

Offering risky investments in a 401(k) such as a high concentration of company stock or opaque products such as hedge funds or private equity may also put 401(k) savings at risk.