401k Averages Book Illustrates the Breakdown of Average Small Plan 401k Fees

BALTIMORE, April 9, 2014 /PRNewswire/ -- Small business owners have many things to worry about and if they offer a retirement plan the evolving regulations related to 401k fee disclosure should be near the top of their list.  In March of 2014, the Department of Labor issued a proposal to provide employers additional guidance as it relates to the fee disclosure regulations finalized in 2012.

"Over the last couple of years small plan sponsors and their advisors have done a great job getting up to speed on employer and participant fee disclosures," said Joseph Valletta, co-author of the 401k Averages Book. "We believe a continued increase in awareness and clarity surrounding 401k fees can only be good for the retirement readiness of 401k participants."

Small Plan 401k Costs

The average total plan cost for a small retirement plan with 100 participants and $5,000,000 in assets is 1.29% according to the 14^th Edition of the 401k Averages Book. That is the same as last year but down from 1.33% three years ago.

When evaluating 401k plan fees it's important to understand how your total plan costs compare and then you begin to look at the underlying cost components. "Fee disclosure has created greater transparency and plan sponsors now have a better idea of how total plan costs breakdown," said David Huntley, co-author of the 401k Averages Book.

The study shows the average investment expense for the same size plan mentioned above is 1.22%. This average investment expense is divided up, with 0.56% (net investment) going to the investment manager and 0.66% (revenue sharing) going to other service providers, such as recordkeepers, advisors and platform providers.

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 financial professionals and plan sponsors with essential 401k cost information needed to determine if their 401k plan costs are above or below average. The 14^th Edition of the 401k Averages Book is available for $95. Advisors may purchase an annual Individual Advisor License which allows them use the data in their client reports.  The 401k Averages Book can be purchased by calling (888) 401-3089 or online at www.401ksource.com.

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SOURCE 401k Averages Book