Total 401k Plan Fees Decline as Investment Fees Drop

401k Averages Book helps advisors compare 401k plan costs

16 Mar, 2016, 09:00 ET from 401k Averages Book

BALTIMORE, March 16, 2016 /PRNewswire/ -- The average total plan cost for a small retirement plan (100 participants/$5,000,000 assets) declined from 1.29% to 1.28% over the past year, while the average total plan cost for a large retirement plan (1,000 participants/$50,000,000 assets) declined from 1.03% to 0.97% according to the newly released 16th Edition of the 401k Averages Book.

"On average 401k investment fees continue to decline in both the small and large plan market," said David Huntley, co-author of the 401k Averages Book. The average investment cost for a small retirement plan declined from 1.22% to 1.21% over the past year, while the average investment cost for a large retirement plan declined from 1.01% to 0.95%.

Understand Revenue Sharing

There continues to be an uptick in 401k lawsuits and some have targeted revenue sharing as well as other fiduciary issues. "Revenue sharing is not necessarily bad, it's when a sponsor does not know how much revenue sharing is generated, how it's used or compares that might cause issues," said Joseph Valletta, co-author of the 401k Averages Book. The 16th Edition finds a small plan generates 0.66% of revenue sharing, while a large plan generates 0.40%. The book provides average revenue sharing, investment and recordkeeping fees for small, mid-size and large 401k plans.

Plan Fees on the Decline since 2010

"401k fees have been trending down for years and plan participants have benefited because of it," said Huntley. This year buyers have to access an infographic on the "Breakdown of Small Plan 401k Fees".  The infographic shows how the average total plan cost for a 100 participant plan has decreased from 1.33% in 2010 to 1.28% in 2015. "We think infographics are a great way for advisors to inform their clients and this one is very interesting," said Huntley.

About 401k Averages Book

Published since 1995, the 401k Averages Book (www.401ksource.com) is the only resource book available for non-biased, comparative 401k average cost information. It's designed to provide retirement plan advisors and financial professionals with essential 401k cost information needed to determine if their 401k plan costs are above or below average. The 16th Edition of the 401k Averages Book is available for $95 and can be purchased by calling (888) 401-3089 or online at www.401ksource.com.

Contact: Joseph W. Valletta, CFA
www.401ksource.com
Phone: (443) 901-7612
E-mail: jvalletta@401ksource.com

 

SOURCE 401k Averages Book



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www.401ksource.com