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Small 401k Plan Fees Decoded


BALTIMORE, MD, May 15, 2018 -- "Understanding small plan 401k fees can be confusing for employers. Our infographic can help employers by showing them how small plan fees are divided and what the average plan pays," said Joseph W. Valletta, co-author of the 401k Averages Book.

Investment fees continue to be the biggest driver of total plan costs. According to the 401k Averages Book's new infographic, Breakdown of Small Plan 401k Fees, investment related expenses account for nearly 97% of a small plan's total cost. "When we break it down further you find 45% is for investment management, 52% is available for revenue sharing and 3% for hard dollar recordkeeping costs," said Valletta.

In today's regulatory environment, it is important employers know what they pay in total plan costs as well as the components that make up the whole.

The infographic also includes a chart that shows small plan fees have declined from 1.29% in 2013 to 1.18% in 2017. Or that the average participant in a small 401k plan, defined as a plan with $5,000,000 in assets and 50 participants, pays $1,176 in total plan fees. Other key points on the infographic provide insights to average investment costs for target date funds, large US equity funds and other typical 401k investments.

The infographic is updated annually and can be downloaded at www.401ksource.com/free-infographic.

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 with essential 401k cost information needed to determine if their 401k plan costs are above or below average. The 18th Edition of the 401k Averages Book is available for $95 and can be purchased by calling (888) 401-3089 or online at www.401ksource.com.


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