The size of a 401(k) plan's average participant account balance significantly influences the fees participants pay.
BALTIMORE, June 6, 2024 /PRNewswire-PRWeb/ -- The authors of the 401k Averages Book have unveiled a new infographic titled "Are All $5,000,000 401(k) Plans Created Equal?", revealing a critical insight into 401(k) plan fees. The infographic demonstrates that the size of a 401(k) plan's average participant account balance significantly influences the fees participants pay.
"Our research shows that participants in plans with lower average account balances tend to pay higher fees compared to those in plans with higher average balances," said Joseph W. Valletta, co-author of the 401k Averages Book. "Unfortunately, this is an aspect of their retirement plan that participants cannot control."
One of the major factors driving the fees of a 401(k) plan is the size of its average account balance. For example, a $5,000,000 401(k) plan with 50 participants, having an average account balance of $100,000, incurs a total bundled cost of 1.04%. In contrast, a similar plan with 500 participants, with an average account balance of $10,000, faces a higher total bundled cost of 1.62%.
"As fiduciaries, plan sponsors must ensure their fees are reasonable. This process begins with understanding the different pricing models available and designing a plan structure that best fits their specific circumstances and those of their participants," Valletta emphasized.
For more detailed insights, view the infographic at https://www.401ksource.com/wp-content/uploads/Are-All-5000000-401k-Plans-Created-Equal-24th-Edition.pdf.
About 401k Averages Book
Published since 1995, the 401k Averages Book (www.401ksource.com) is the only resource book available for non-biased, comparative 401(k) average cost information. It's designed to provide financial professionals with essential 401(k) cost information needed to determine if their 401(k) plan costs are above or below average. The 24th 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.
Media Contact
Joseph W. Vallletta, 401k Averages Book, 1 443-901-7612, [email protected], www.401ksource.com
SOURCE 401k Averages Book
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