If you work for a small to midsized company whose 401(k) is administered by a bank or insurance company, you may be getting taken advantage of.

    A bold statement? Consider these real life examples — cases we’ve worked on recently:

    •Company No. 1, 85 employees: The firm started a 401(k) plan through a well-known insurance company about 10 years ago. The plan assets are about $1 million. Upon review, we were able to demonstrate to the client their total plan fees were 2.22 percent of the plan assets, or more than $22,000 per year.

     “How can this be,” a company executive asked, “since we’re only paying the insurance company $1,250 per year?”

     We demonstrated their direct-billed expenses — those they could see — were $1,250 per year. Yet this was only 5 percent of their overall fees! The other 95 percent was netted from investment returns, thus invisible.

Out of sight, out of mind, and out of your pocket.

      •Company No. 2, with 55 employees: The firm started a 401(k) plan through a well-known bank about 12 years ago. The plan assets are about $1.25 million. The total plan fees are about 2.71 percent of plan assets — all but $1,850 being netted from plan assets.

     Why should you care? I’ll give you $175,000 reasons!

      The hefty fees are dragging down your investment returns. This is costing you money, in the form of punier-than-need-be account balances upon reaching your retirement age.

     Consider another example of a 35-year-old employee earning $50,000 per year.

     Assume she has a $10,000 retirement account balance, and contributes 10 percent of her gross income per year, pretax, into her employer’s 401(k) plan. Her employer kicks in 3 percent of her gross wages in the form of matching contributions or profit sharing, so her total contributions equal 13 percent of her gross pay.

     Next, as a moderately aggressive investor, she can earn a 9 percent gross investment return (i.e., before any plan-level fees) on her growing balance.

Presuming her employer’s plan carries expenses of 2.5 percent of plan assets, this means her investments are growing at a rate of 6.5 percent annually (9 percent gross return less 2.5 percent expenses). Thus her future value at her normal retirement age of 67 equals $616,369.

     But what if her company thoughtfully chose a plan with lower fees — say 1.25 percent of plan assets?

Then, her balance is growing at a 7.75 percent clip, net of plan expenses. If so, her expected balance at age 67 equals $791,235. A difference of $174,866!

     The bottom line: For years, standard operating procedure was for 401(k) providers to mask fees — and to sweep the discussion under the table. Since this is your money, we believe vehemently that you deserve to know what your plan costs.

Geoffrey S. Huber is a retirement plan partner with Triune Financial Partners LLC., Overland Park.