The cost of correcting plan errors can be expensive. It can be expensive through corrective contributions and it certainly can be expensive through legal costs.
I met an advisor who was discussing a very large problem that a plan sponsors was going through. The plan sponsors was sold a bill of goods by the previous advisor and the need to develop a new 401(k) plan. Of course, the only problem is that for years after the plan was established. Form 5500s weren’t completed and filed.
So the new advisor is giving me the whole list of problems and told me that he was advised that legal fees would be about $75,000. There is no way in heck that those legal fees could be that high. I could probably handle that for a 1/3 of that proposal.
The point here is that legal fees to an ERISA attorney are part of the game, but like any other plan cost, they should be shopped around.
