MOBILE, Ala., Nov. 29, 2018 /PRNewswire-PRWeb/ -- Employee Fiduciary, LLC announces the release of a small business 401(k) fee study designed to help fiduciaries benchmark their plan fees. Service provider fees and investment expenses ('all-in' fees) of 102 401(k) plans with less than $5 million in assets were studied. The average all-in fee for these plans was 2.10%, while the average service provider fee was $603.86 per participant. 27 service providers were represented in the study.
Employee Fiduciary President and CEO, Eric Droblyen commented, "Meaningful 401(k) fee data is hard to come by. That's a big problem for small businesses with a fiduciary responsibility to ensure the fees paid by their 401(k) plan participants are 'reasonable.' Required public filings – most notably the Form 5500 – provide only snippets of fee data. Even worse, DOL-mandated fee disclosures are often a tangle of 'direct' fees deducted from participant accounts and 'indirect' fees paid by plan investments. In short, following the money is a difficult job even for those employers willing to invest the time and energy to do so."
The 401(k) fee study can be found here. Findings include:
- The average all-in fee for plans was 2.10%, while the average service provider fee was $603.86 per participant.
- In general, insurance companies are the most expensive 401(k) providers. This finding might be explained by their variable annuity "wrap" fees - which are a layer of fees that other 401(k) providers can't charge.
- 401(k) provider fees should be evaluated for reasonableness on a headcount basis to ensure asset-based administration fees don't outstretch the provider's level of service. One plan studied had a below-average all-in fee, but a per-head provider fee that was more than four times average!
"Our last 401(k) fee study was well-received and we're excited to provide this update based on more recent information," said Mr. Droblyen, "We hope our studies help employers avoid the consequences for buying an over-priced 401(k) plan. Making retirement as affordable as possible for employees is important."
About Employee Fiduciary
Founded in 2004, Employee Fiduciary is a leading provider of small business retirement plans headquartered in Mobile, AL. The firm administers nearly 4,000 plans nationwide with more than $3.4 billion in combined assets. For more information, please visit https://www.employeefiduciary.com.
SOURCE Employee Fiduciary
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