Content area
Abstract
Defined contribution (DC)/401(k) fees are charged in a variety of ways for the services provided. Typical fee structures include asset-based investment fees, per-participant recordkeeping fees, per-plan recordkeeping and administration fees, and per-plan advisory fees. As plan sponsors work with retirement service providers to set up or administer their plans, a range of scenarios or arrangements is generally considered. This report does not aim to assess those ranges, but to calculate an ex-post comprehensive plan fee. The all-in fee varied due to a number of plan-related variables. Statistical regression analysis found that plan size appeared to be the most significant driver of fees. Both number of participants and the average account balance were negatively correlated with the all-in fee. Within any DC/401(k) plan, there are fixed costs required to start up and run the plan, many which are driven by legal and regulatory requirements.