Total 401(k) plan fees are trending downward, according to the latest edition of the 401k Averages Book.
The book, published since 1995, provides comparative 401(k) cost information for retirement plan advisors and financial professionals, including average revenue sharing, investment and recordkeeping fees for small, mid-size, and large 401(k) plans. And in this, its latest—16th—edition, the fee trend it reflects is downward.
The average total plan cost for a small retirement plan, one with 100 participants and $5,000,000 in assets, has fallen from 1.29 percent to 1.28 percent over the past year.
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A larger reduction came for large retirement plans (those with 1,000 participants and $50,000,000 in assets), which saw their average total plan costs drop from 1.03 percent to 0.97 percent.
Plan fees have been falling since 2010, with the average total plan cost for a 100-participant plan decreasing from a 2010 level of 1.33 percent to 1.28 percent in 2015.
"On average 401(k) investment fees continue to decline in both the small and large plan market," David Huntley, coauthor of the 401k Averages Book, said in a statement. The average investment cost for a small retirement plan declined from 1.22 percent to 1.21 percent over the past year, while the average investment cost for a large retirement plan declined from 1.01 percent to 0.95 percent.
Lawsuits around 401(k) plans continue to rise in number, it reports, with some targeting revenue sharing and 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," Joseph Valletta, coauthor of the book, said in a statement. This latest edition found that a small plan generates 0.66 percent of revenue sharing, while a large plan generates 0.40 percent.
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