Average expenses for small retirement plans are 1.3%, according to the 401k Averages Book, which published the 12th edition of its annual benchmark report on 401(k) fees on Tuesday. Expenses for large plans are slightly lower at 1.08%. The bulk of these expenses come from investment-related fees. Investment expenses account for 95% of expenses in a small plan and 98% in a large plan.
For a small plan with 100 participants and $5 million in assets, the range between the high and low total plan costs is 0.36% to 1.71%.
The book does not compare year-over-year increases in costs because "the assumed asset allocation changes every year based on what we're seeing in the marketplace," Joseph Valletta, partner and co-author of the 401k Averages Book, told AdvisorOne. The asset allocation used for the 12th edition is 40% large equity, 20% stable value, 9% international equity, 8% fixed income and 23% balanced.
Valletta noted that in an uncertain regulatory environment, understanding fees is crucial.
