401(k) fees decline again in 2022

Fees for 401(k) plans declined again last year, with the investment costs paid by retirement plan participants down an average of 0.3%, according to the latest 401(k) Averages Book.

“Lower investment fees will pay significant dividends to participant balances in the long run,” Joseph W. Valletta, author of the 401k Averages Book, said in a statement.

Participants in smaller plans tend to pay higher fees than those in larger plans. Last year, small retirement plans — those with 50 participants and $5 million in assets — saw fees decline to 1.09%, which compares to 1.12% in 2021 and 1.17% in 2018.

In contrast, participants in large plans — those with 1,000 participants and $50 million in assets — saw fees decrease to 0.85% last year, which is down from 0.88% in 2021 and from 0.95% in 2017.

Costs for plans vary the most in the small-plan market, where a 401(k) with $1 million in assets and 100 participants could have fees ranging anywhere from 0.69% to 2.67%.

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