There was very little change in the total costs of smaller 401(k) plans in 2012, according to statistics from the 401k Averages Book. The average cost of a small retirement plan (50 participants and $2.5 million) went down less than 1%, from 147 BPs to 146 BPs. Meanwhile, larger plans (1,000 participants and $50 million) dropped almost 5%, from 108 BPs to 103 BPs.
According to research from the NEPC published on NAPA Net, larger plan expenses (average $664 million and median $294 million) dropped 11% for the 15-month period ending March 31, 2012, continuing a trend since the research started in 2006.
While the drop for smaller plans was minimal, very few if any experts expect that trend to continue, with advisor fees leading the decline, according to research by Ann Schleck. The old adage that changes in the larger markets usually make their way down-market may apply to fees and, with new fee disclosure regs and greater focus by almost everyone on fees and 401(k) plans in general, expect that adage to prove itself true once again — especially for advisors.
