Since its inception in 1978, a 401(k) plan has become America’s favorite type of employer-sponsored retirement plan. It allows employees to stash away income on a pre-tax basis into an investment account that can grow tax-deferred to sometimes enormous sizes over time—especially if you factor in the role of compounding.

However, all too often, business owners unknowingly find themselves in a confusing 401(k) plan that can be layered with hidden costs, conflicts of interest and poor-performing funds. When this happens, the employer unknowingly saddles his or her employees with burdensome costs and consistent underperformance, leaving workers with less savings over ...