Press Release

Lower 401(k) Plan Fee Trend Continues

Issued by 401k Averages Book

Feb. 14, 2022

Employees benefit as they continue to see their 401(k) plan investment fees decline

BALTIMORE -- The new release of the 401k Averages Book 22nd Edition shows the average total plan cost and investment fees for 401(k) plans continue to decline.

Total investment costs declined between 0.01%-0.06% from last year, with the average representing a decrease of 0.03%, according to the latest release of the 401k Averages Book. “The decline in investment related fees paid by participants will help boost retirement savings over the years,” said Joseph W. Valletta author of the 401k Averages Book.

The book of averages found small retirement plan (100 participants/$5,000,000 assets) fees declined from 1.20% to 1.19%. Since 2017 small plan total plan costs have dropped 0.06% from 1.25%. “For years there has been an increased awareness around the impact 401(k) fees have on long-term savings. The trend in lower fees shows that employers and their advisors have been working to reduce the drag caused by these fees,” said Valletta.

Key Findings:

• Large 401(k) Plan Fees: Large retirement plan (1,000 participants/$50,000,000 assets) fees declined from 0.90% to 0.88% over the past year and are down from 0.95% in 2017.
• Small 401(k) Plan Fees: Small retirement plan (100 participants/$5,000,000 assets) fees declined from 1.20% to 1.19% over the past year and are down from 1.25% in 2017.
• Investment fees continue to decline: All scenarios saw a year over year decrease in total investment costs ranging between 0.01%-0.06%, with the average representing a decrease of 0.03%.
• Smaller plans pay higher fees than large plans: The small plan with $5,000,000 in assets costs 1.19%, while the plan with $50,000,000 in assets is 0.88%.
• Plans with smaller average account balances pay more than those with larger balances: A $20,000,000 plan with 2,000 participants has an average total plan cost of 1.19%, while a $20,000,000 plan with 200 participants has an average total plan cost of 0.94%.
• 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 2.69%.

Included in the Book:

• Twenty-four sections with charts detailing average 401(k) fees for plans with 10, 25, 50, 100, 200, 500, 1000 and 2000 participants.
• The 401k Averages Book includes three easy to read infographics illustrating small plan costs. Each infographic shows the 5-year trend of total plan costs, range of per participant costs and other key data points.

About 401k Averages Book

Published since 1995, the 401k Averages Book (http://www.401ksource.com) is the only resource book available for non-biased, comparative 401(k) average cost information. It's designed to provide financial professionals with essential 401(k) cost information needed to determine if their 401(k) plan costs are above or below average. The 22nd Edition of the 401k Averages Book is available for $95 and can be purchased by calling (888) 401-3089 or online at http://www.401ksource.com.

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