Downward Trend in 401(k) Plan Costs Continues

The 401k Averages Book also shows smaller plans continue to pay higher fees than large plans.

The 401k Averages Book 19th Edition shows the average total plan cost for a small retirement plan (100 participants/$5,000,000 assets) declined from 1.25% to 1.24% over the past year, while the average total plan cost for a large retirement plan (1,000 participants/$50,000,000 assets) declined from 0.95% to 0.93%.

According to the data, investment fees continue to decline. All scenarios (expect one) saw a year-over-year decrease in total investment costs of between 0.01% and 0.03%. Larger plans experienced greater decreases. In addition, total 401(k) plan costs declined for most plans sizes. Nineteen of 24 scenarios saw a decrease in total plan costs from last year, while the other five remained unchanged.

The 401k Averages Book also shows smaller plans pay higher fees than large plans. A small plan with $5,000,000 in assets costs 1.24%, while a plan with $50,000,000 in assets costs 0.93%. The amount of revenue sharing paid by a plan is also impacted by its size. Average revenue sharing, which can be used to pay for recordkeeping or adviser compensation, can be as high as 1.19% for the smallest plans and as low as 0.16% for larger plans.

The data shows a wide range between high- and low-cost providers. The range of cost is greatest within the small plan market. The range of a plan with $1,000,000 in assets and 100 participants ($10,000 average account balance) is 0.72% to 2.81%.

“Overall fee disclosure and greater transparency has helped drive down 401(k) fees,” says Joseph Valletta, author of the 401k Averages Book. “But what we continue to find is large plans, with larger average account balances, pay less than smaller plans.” 

Published since 1995, the 401k Averages Book provides non-biased, comparative 401(k) average cost information, designed to help retirement plan sponsors and advisers benchmark 401(k) plan costs. The 19th Edition of the 401k Averages Book is available for $95 and can be purchased by calling (888) 401-3089 or going online at