401(k) not hassle-free.

I just finished reading the article "Pension Attention" (California CPA, July 2005) and disagree with Mr. Framson's statement that "... the 401(k) is the most hassle-free type of retirement plan." This is clearly not true from the perspective of the employer.

A 401(k) plan is labor intensive at the employer level relative to traditional retirement plans. At a minimum, the 401(k) must be dealt with every time payroll is run. In addition, most employers have to occasionally deal with new enrollments, participant loans, hardship and distribution requests.

401(k) plans are also expensive to operate, primarily due to investment expenses. According to the Department of Labor, "by far the largest component of 401(k) plan fees and expenses is associated with managing plan investments."

Proper disclosure of these expenses to plan fiduciaries and plan participants is a major focus of the DOL's Fiduciary Education Campaign. The DOL is holding nationwide seminars to improve workers' health and retirement security by educating employers and service providers about their fiduciary responsibilities under the Employee Retirement Income Security Act.

These plans certainly have their place, but to attach the moniker "most hassle-free" is just incorrect.

Mark W. Clark

Orange