401(k) plan fees drop in 2022 – '401k Averages Book'

Total 401(k) plan costs declined an average of three basis points in 2022, according to the latest annual edition of the “401k Averages Book” released Wednesday.

Small 401(k) plans with 50 participants and $5 million in assets, for example, saw average costs dip last year to 1.09% from 1.12% the year before. Their cost averaged 1.18% in 2017.

“We are encouraged to see fees continue to decline for participants in small 401(k) plans,” said Joseph Valletta, author of the “401k Averages Book,” in a news release.

Average costs for larger plans dropped more dramatically over five years. Large 401(k) plans with 1,000 participants and $50 million in assets, for example, had an average cost of 0.85% in 2022, down 3 basis points from 0.88% in 2021 and down 10 basis points from 0.95% in 2017.

Total plan fees include all of the investment, record-keeping and administration, and trustee costs paid by the company or the participant.

The book analyzes average 401(k) fees for plans with 10, 25, 50, 100, 200, 500, 1,000 and 2,000 participants across asset sizes ranging from $100,000 to $200 million.