Average costs for 401(k) plans decline by 0.03%

Small plans still bear higher fees than large plans, according to a book that compiles data on retirement plans.

Total investment costs for 401(k) plans declined by an average of 0.03% in 2021, according to the latest 401k Averages Book, which publishes data on plans.

Fees at large retirement plans, those with 1,000 or more participants and $50 million or more in assets, declined from 0.90% to 0.88% over the past year and are down from 0.95% in 2017. Fees on small retirement plan (those with 100 or fewer participants and $5 million or less in assets), declined from 1.20% to 1.19% in 2021 and are down from 1.25% in 2017.

“This decline in investment-related fees paid by participants will help boost retirement savings over the years,” Joseph W. Valletta, the book’s author, said in a statement.

The book finds that not only are small plans more expensive than large plans, but costs also vary more widely for small plans. A plan that has $1 million in assets and 1,000 participants could see costs ranging all the way from 0.72% to 2.69%, according to the 401(k) Averages Book.

[More: 401(k) fees are eating Americans’ retirement savings]