What does Excessive Fee Claims mean? Read on to discover the definition & meaning of the term Excessive Fee Claims - to help you better understand the language used in insurance policies.
Excessive Fee Claims
A type of claim made against fiduciaries responsible for overseeing 401(k) plans. Such claims allege that the fee charged by the outside administrator of the plan is substantially higher than the average fee (usually stated as a percentage of total funds held by a given 401(k) plan). When multiplied out during a substantial period of time (i.e., 20 to 30 years), a fee that is merely 1 or 2 percent higher than the normal fee can reduce a 401(k) plan holder's balance by many thousands of dollars. And when a group of employees bands together in a class action alleging that an employer's 401(k) plan charged an excessive fee, damages claimed can exceed $100 million.
We hope the you have a better understanding of the meaning of Excessive Fee Claims.