401(k) plan fees continued to decline in 2020

The average total plan cost for a small retirement plan declined to 1.20% from 1.23% over the past year, according to the latest 401k Averages Book.

The average total plan cost for a large retirement plan also declined, to 0.90% from 0.91%, Joseph Valletta, the author of the book, said in a release.

Valletta defines small plans as those with fewer than 100 participants and up to $5 million in assets and large plans as those with more than 1,000 participants and more than $50 million in assets.

[More: As 401(k) assets fall, investors could pay higher fees]

Plans’ total investment costs, typically paid by participants, ranged from 0.02% to 0.04%, with the average representing a decrease of 0.03%. The book found that smaller plans pay higher fees, of around 1.20%, than large plans, which pay about 0.90%.

[More: Surprise! Mutual fund revenue sharing makes 401(k)s more expensive]

The book also found a wide range between high- and low-cost providers, especially in the small-plan market. In the small-plan market, the costs ranged between 0.68% and 2.73%.

[More: Why 401(k) fees are a mystery]

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