Every year, the 401(k) Averages Book comes out and tells us something we already know\u2014but somehow still manage to ignore.<\/p>\n
Fees are going down.<\/p>\n
That\u2019s the headline everyone wants to celebrate. Investment costs continue to drop, recordkeeping is more competitive than ever, and overall plan expenses keep trending downward. On paper, it looks like progress. It looks like the system is working.<\/p>\n
And to a certain extent, it is.<\/p>\n
But then you get past the headline, and that\u2019s where things get uncomfortable.<\/p>\n
Because while fees are falling overall, the disparities between what plans actually pay are still staggering. You can line up two plans of similar size, similar demographics, even similar providers\u2014and still see meaningful differences in cost. Not a few basis points here or there, but gaps that actually matter over time.<\/p>\n
So the real question isn\u2019t whether fees are improving.<\/p>\n
It\u2019s why the gap still exists at all.<\/p>\n
This isn\u2019t 2005. We\u2019re not operating in the dark anymore. Fee disclosures exist. Benchmarking tools are everywhere. Advisors talk about fiduciary duty like it\u2019s second nature. Litigation has made it painfully clear that excessive fees are not just a theoretical issue.<\/p>\n
And yet, here we are.<\/p>\n
The problem isn\u2019t a lack of information. It\u2019s a lack of urgency.<\/p>\n
Plans stay where they are because things feel \u201cfine.\u201d Providers don\u2019t push hard enough because stability is easier than change. Advisors sometimes accept the status quo because proving something better requires effort, and effort creates friction.<\/p>\n
Meanwhile, participants quietly pay the price.<\/p>\n
Because here\u2019s the part that gets lost: averages don\u2019t apply to individuals. Just because the industry average is going down doesn\u2019t mean your plan is benefiting from it. Someone is still paying more than they should\u2014and often they don\u2019t even realize it.<\/p>\n
That\u2019s what the Averages Book really exposes.<\/p>\n
Not just progress, but inconsistency. Not just improvement, but complacency.<\/p>\n
And if you\u2019re not actively questioning what you\u2019re paying and why, there\u2019s a very real chance you\u2019re on the wrong side of that gap.<\/p>\n
<\/p>\n
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