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Chapter 2. The Rules: Understanding Your... > Valuation: What Is It and Why Do You... - Pg. 29

The Rules: Understanding Your 401(k) You might ask who pays for the administration of you 401(k). The answer is, it depends. It could be your employer, or it could be you. In 2001, most employers still paid the record-keeping, trust, custody, compliance, and communication expenses of the plan for employees. The investment-management fees are most often paid by each employee. Investment-management fees are levied against the returns that you receive. If your company charges you for any fees, it must tell you what the charges are for and how much you are being charged. You can expect more of your plan's expenses to be paid by you. Make sure that you're getting what you're paying for. 29 The Least You Need to Know · 401(k) plans have a lot in common, but some differences may be significant. Understand how your par- ticular plan operates. · Many players are involved in 401(k) plans. The IRS, the Department of Labor, the plan sponsor, the plan administrator, the trustee, the record keeper, and the investment manager all play different roles in making your 401(k) work. · Know the specifics of your plan. When do you become eligible? How much can you contribute? What does the company match? When is it credited to your account? When are you 100 percent vested? How do loans work? What fees do you pay? How do withdrawals work? What are the penalties? · If you make $85,000 or more per year, your contributions may be capped (or refunded) if your company fails the nondiscrimination tests. · It's wise to stay informed about the investments in your 401(k) plan through company resources and your local library.