Book Reveals Wide Range of 401(k) Plan Fees

The average total plan cost for a small 401(k) plan (100 participants) is 1.3%. 

According to the 12th Edition of the “401k Averages Book,” the average total plan cost for a large retirement plan (1,000 participants) is 1.08%. The study shows the small plan average investment expense is 1.24%, while the large plan average investment expense is 1.05%.

“With the DoL’s fee disclosure effective date set for April 1, knowing if your 401(k) plan fees are reasonable will be very important,” says Joseph Valletta, co-author of the “401k Averages Book.”

The recent focus on investment expenses is well-reasoned because the study finds investment expenses account for 95% of the small plan’s total expenses and 98% of the large plan, according to the authors. “If an employer really wants to cut their 401(k) costs, they need to examine their investment-related expenses,” said David Huntley, co-author of the “401k Averages Book.”

The range between the high and low total plan costs on a 100-participant plan with $50,000 average account balance is .36% to 1.71%.

“With all the focus on fee disclosure and 408(b)(2), it’s important employers and their advisers compare their fees to a benchmark and understand where they fit into the range of costs in the marketplace,” said Huntley.

The12th Edition breaks down investment costs and identifies the revenue sharing and net investment amounts. The study finds the average revenue sharing amount on a small plan is .68%, while the net investment cost is .56%.

“Fee disclosure is causing some plan sponsors and their advisers to take a more detailed look at how their investment costs are allocated,” said Valletta. 

Published since 1995, the “401k Averages Book” is the only resource book available for non-biased, comparative 401(k) average cost information. It’s designed to provide financial professionals and plan sponsors with essential 401(k) cost benchmarking information. The 12th Edition of the “401k Averages Book” is available for $95 and can be ordered at

Advisers can purchase an annual individual Advisor License, which allows them use the data in their client reports.