Retirement Plan Fees: Are Your Recordkeeping Fees Too High?

Employees and participants in 401(k) and other employer-sponsored defined-contribution retirement plans may lose retirement savings when their plans pay unreasonable administrative or recordkeeping fees. Under ERISA, plan fiduciaries must act prudently and in the interests of plan participants when managing plan expenses.

Why Retirement Plan Recordkeeping Fees Matter

Recordkeeping fees pay for services used to administer a retirement plan, such as maintaining participant accounts and records. Even relatively small differences in per-participant fees can become significant when a plan has thousands of participants. The central issue is not simply whether a fee appears high, but whether plan fiduciaries used a prudent process to monitor the fees and determine whether they were reasonable for the services provided.

Trader Joe’s Decision: A Recent Example

A September 28, 2026 federal court decision involving the Trader Joe’s Company Retirement Plan provides a recent example of the importance of monitoring retirement plan recordkeeping fees. Following a bench trial, U.S. District Judge William G. Young found in favor of the plan participants on their claims concerning recordkeeping fees, while ruling in favor of Trader Joe’s on the other claims addressed in the decision.

The court found that the plan’s recordkeeping fee was $48 per participant in 2019, later reduced to $40 effective April 1, 2021, and then to $38 effective July 1, 2024. The court also found there was no formal request for proposal (RFP), request for information (RFI), or other evidence of active competitive testing of the market for an optimal recordkeeping fee.

Addressing the fiduciary process, the court stated: “The Committee in this case has provided no robust evidence indicating that it engaged in a process compliant with its fiduciary duties of prudence and loyalty, to ensure that the recordkeeping fees were adequately monitored and controlled.”

The court concluded that the defendants breached their fiduciary duties concerning recordkeeping fees and caused losses to plan participants. It calculated $715,264 in overpaid recordkeeping fees and awarded $471,957 in prejudgment interest, for a total surcharge of $1,187,221.

Cognizant 401(k) Plan Participants Seek Preliminary Approval of $2.8 Million ERISA Settlement

In Milano et al. v. Cognizant Technology Solutions U.S. Corporation et al., Civil Action No. 2:20-cv-17793 (D.N.J.), participants in the Cognizant Technology Solutions 401(k) Savings Plan (the “Plan”) have asked the U.S. District Court for the District of New Jersey to preliminarily approve a $2.8 million class action settlement.

According to the plaintiffs’ September 29, 2026 memorandum in support of preliminary approval, the operative complaint alleges breaches of the fiduciary duty of prudence under the Employee Retirement Income Security Act of 1974 (“ERISA”).

The plaintiffs allege that the Plan fiduciaries: 1) failed to objectively and adequately review the Plan’s investment portfolio with due care to ensure that each investment option was prudent in terms of cost and/or performance; 2) maintained certain funds in the Plan despite the availability of identical or similar investment options with lower costs and/or better performance histories; and 3) failed to control the Plan’s recordkeeping and administrative costs.

The plaintiffs further state that one of their three general theories of liability is that the defendants’ allegedly imprudent fee-monitoring process resulted in excessive recordkeeping and administrative fees for the Plan and its participants.

The proposed settlement provides for a $2.8 million Gross Settlement Amount. The proposed Settlement Class generally includes participants and beneficiaries of the Plan from December 2, 2014 through the date of the Preliminary Approval Order. The defendants deny all claims and deny that they engaged in any wrongful conduct.

What Should Retirement Plan Participants Know?

The Trader Joe’s decision and the allegations in the Cognizant litigation illustrate the importance of the fiduciary process used to monitor retirement plan recordkeeping and administrative expenses. A recordkeeping fee should not be evaluated based solely on its dollar amount. Relevant considerations may include the services provided to the plan, whether fiduciaries compared fees and services with available market information, whether they sought competitive information or bids, and whether they negotiated or otherwise monitored the fees paid by the plan.

Retirement plan participants who are concerned about recordkeeping or administrative expenses may want to review their plan disclosures and other available information concerning the fees charged to their accounts and the services provided to the plan.

Retirement Plan Participants with Questions: Contact Kehoe Law Firm

If you participate or participated in an employer-sponsored 401(k) or other defined-contribution plan and are concerned that excessive administrative or recordkeeping fees reduced your retirement savings, you are encouraged to send us a message to learn more about your potential legal rights.

For a free, no-obligation legal evaluation:

Michael Yarnoff, Esq.
(215) 792-6676, Ext. 804
[email protected]
[email protected]

About Kehoe Law Firm, P.C.

Kehoe Law Firm, P.C. is a nationally recognized, plaintiff-side class action law firm representing investors, consumers, and employees in matters involving securities fraud, corporate misconduct, mergers and acquisitions, antitrust violations, whistleblower claims, data breaches, consumer fraud, employment law violations, and ERISA and retirement plan litigation. Its attorneys have served as lead or co-lead counsel in major securities cases, recovering more than $10 billion for institutional and individual investors.

Kehoe Law Firm’s class action legal services are provided on a contingency-fee basis, meaning plaintiffs are not responsible for attorneys’ fees or litigation expenses. Any request for attorneys’ fees and expenses will be subject to court approval.

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