Your Employer Picks the Investments in Your 401(k) — What Happens When Workers Say They’re Bad Choices?

A 401(k) employee usually chooses investments from an employer-selected menu, but plan fiduciaries still have a duty to prudently select and monitor those options – Shutterstock

Your employer usually does not decide where every dollar in your 401(k) goes. Instead, the company or its retirement-plan committee generally chooses the investment menu, while workers choose from that menu. That distinction matters because employees can object to the choices, but simply disliking a fund does not mean the employer broke the law.

For private-sector plans covered by ERISA, the people responsible for the plan have fiduciary duties. They must act in participants’ interests, follow a prudent process, consider fees, and monitor investment options after selecting them.