The same shifty revenue sharing practices that have been exposed in the mutual fund industry in recent years are also a big part of the 401(k) sector, according to a report from the St. Louis Post-Dispatch.
It's a perfectly legal way to pay for the cost of maintaining accounts and mailing statements, but the manner in which such payments are disclosed is questionable. In fact, in many cases theses payments are not disclosed at all, the Post-Dispatch indicates. The fund company and the administrative firm know how much money is exchanged, but the employer often does not. And neither does the worker, the one who is ultimately paying.