Are Your 401(k) Sponsor Fees Too High?

Often, 401(k) plan sponsors unwittingly pay higher fees. A recent Deloitte study of 401(k)s from more than 500 companies found that all-in fees widely ranged from 0.29% to 1.29% —and some can even be higher.

A plan on the higher end of the fee scale can increase your operating costs and diminish your employees’ 401(k) savings each year, making it harder for them to reach their financial goals.

How investment fees affect employee 401(k) balances

Over time, even a small difference in costs can lead to a significant difference in portfolio value. The illustration below shows the long-term impact of costs on employee portfolio balances.

Long term impact of investment costs on portfolio balances line graph

High 401(k) fees can be a breach of fiduciary duty

Sponsors are legally required to “benchmark” their plans each year to demonstrate that the fees are reasonable and you are fulfilling your fiduciary responsibilities. An expensive plan may put your business in violation.

401k X Design will not only work to build a cost-effective plan, we’ll provide a benchmarking analysis that clearly spells out each annual fee to the nearest cent. We can help you meet your fiduciary duty while potentially reducing your 401(k) sponsor costs. At the same time, we can help your employees keep more of their savings.

If you think you may be paying more than you should, or are unsure what your costs are, reach out to us for a free consultation.

Download our comprehensive brochure to learn more about 401k X Design