My company just sent out a Participant Fee Disclosure document for my 401(k) plan. In an attempt to understand my finances better, I am reading it through carefully. Thanks to a lot of the posts on here, most of it makes sense, except the line I've bolded below:
Under Administrative Expenses - Plan-Level Expenses/Credits,
A portion of these services are paid from the plan's expenses. This is reflected in each investment's expense ratio and reduces the investment returns. If an additional amount is required to cover your plan's administrative expenses, your employer expects that it will be paid from the plan's forfeiture assets or from the general assets of your employer.
This plan may also incur unexpected expenses that may be deducted from participant accounts.
If your plan's investments generate more revenue than is necessary to cover the costs of administrative services for your plan, the excess amount will be used to pay other plan expenses or allocated to participants and will appear on your quarterly statement.
I've read What expenses do 401k funds charge? and 401(k) plan/investment fees: Are they the expense ratios, or something else as well? but the fees described in those are, if my reading is correct, already covered explicitly elsewhere in the document (and I wouldn't call them "unexpected").
So my questions are:
- Does "from participant accounts" mean they would deduct specifically from my 401k?
- What sort of "unexpected expenses" might they be taking out?
- Is this typical? (My company's HR is notoriously cheap.)
