SEC starts 401(k) probe

WASHINGTON, July 7 (UPI) -- The U.S. Securities and Exchange Commission, fresh off its probe of mutual fund scandals, is turning a spotlight on 401(k) plans.

Providers of the plans acknowledge receipt of SEC letters demanding details about how they pay 401(k) administrators and consultants to have their funds included in particular plans, the Washington Post reported Wednesday.

Among providers who say they have received SEC letters asking about their so-called revenue sharing policies are T. Rowe Price, Fidelity Investments and Putnam Investments.

Industry officials said some of the letters also went to much smaller fund companies so they could develop a cross section of plans and current policies.

"We want to get a better sense of whether funds or (fund management companies) are making these payments to get preferential treatment known as 'shelf space,'" said Lori A. Richards, who heads the SEC office that sent out the letters.

The largest U.S. mutual fund company, Vanguard Group, which also administers many 401(k) plans, has a policy against revenue sharing.

These plans are the dominant means of retirement savings in the United States.