Most 401(k) Plan Fees Declining or Flat

BALTIMORE, Feb. 18, 2014 /PRNewswire/ -- The average total plan cost for a small retirement plan (50 participants/$2,500,000 assets) declined from 1.46% to 1.44% over the past year, while the average total plan cost for a large retirement plan (1,000 participants/$50,000,000 assets) remained flat at 1.03% according to the 14^th Edition of the 401k Averages Book.

"In most of our fee benchmark scenarios we saw a decline in total plan costs and investment fees on a year over year basis," said David Huntley, co-author of the 401k Averages Book. The study shows the small plan average investment expense went from 1.37% to 1.35%, while the large plan average investment expense bumped up from 1.00% to 1.01%. "In cases where it stayed flat or ticked up, the increase in equity exposure in our allocation model was typically the reason," Huntley said.

"The effects of fee disclosure and competitive pricing narrowed the range of the middle 50% of the product universe for most of the benchmark universes," said Joseph Valletta, co-author of the 401k Averages Book.  The small retirement plan universe saw the range of the middle 50% shrink from 36 basis points last year to 29 basis points this year, while the large plan variance went from 21 basis points to 20 basis points.

New Micro Plan (10 participants) Benchmarks Released

"With so many small employers either sponsoring or starting 401(k) plans we released a new set of benchmarks for plans with 10 participants. One benchmark assumes plan assets of $500,000 while the other is $100,000," said Valletta. The study finds the average total plan expense for a 10 participant plan with $500,000 in assets is 1.90%.

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.

Contact: Joseph W. Valletta, CFA

www.401ksource.com

Phone: (443) 901-7612

E-mail: [email protected]

SOURCE 401k Averages Book