Stating The Obvious On Fees

The 401k Averages Book is one of the great publications in the retirement plan business and I recommend it. I won’t recommend a report they just did because it was stating the obvious.

According to their report:  “Are All $5,000,000 401k Plans Created Equal?”, the size of a 401(k) plan’s average participant account balance will influence the amount of fees they pay.

The report states that there can be a big price difference for a $5 million 401(k) Plan if the plan has 100 participants as opposed to 500 participants.

According to their report, the total bundled cost for a plan with 100 participants and an average account balance of $50,000 is 1.25 percent as compared to 1.56 percent for a 500-participant plan with an average account balance of $10,000.

Of course it is. Most third party administrators I know charge a per head price in addition to other fees, so a plan with more participants will usually pay more than one has less even if they have the same amount of assets.

This entry was posted in Retirement Plans. Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *