Lower 401(k) plan-fee trend continues, per reference book

The average total plan cost and investment fees for 401(k) plans continued to decline in the latest year,  according to the new release of the “401k Averages Book,” 22nd Edition.

Total investment costs declined between 0.01 percent and 0.06 percent from last year, with an average decrease of 0.03 percent, per the reference book. 

“The decline in investment related fees paid by participants will help boost retirement savings over the years,” Joseph W. Valletta, author of the 401k Averages Book, said in a release.

The book of averages found that fees for small retirement plan (100 participants/$5 million assets) declined from 1.20 percent to 1.19 percent. Since 2017, small plan total plan costs have dropped by 0.06 percent from 1.25 percent. 

“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.

Large retirement plans (1,000 participants/$50 million in assets) had fees decline from 0.90 percent to 0.88 percent over the past year and have dropped from 0.95 percent in 2017.

The 401k Averages Book (www.401ksource.com) found a wide range between high and low-cost providers. The range of cost is greatest within the small-plan market.