When Did You Last Review Your Retirement Plan Fees?

FEBRUARY 4, 2025

Despite a significant decrease in recordkeeping and asset management fees over the past decade, many 401(k) and 403(b) retirement plans may be able to find additional savings with a periodic review. In an effort to protect employee retirement assets, in 2012, the Department of Labor’s (DOL) Employee Benefits Security Administration (EBSA) issued a final rule improving transparency into plan fees and expenses. This increased transparency made it easier for participants to challenge excessive fees, leading to a rise in fiduciary lawsuits.

Under the Employee Retirement Income Security Act (ERISA), retirement plan fiduciaries — including the employer and the individuals responsible for overseeing the plan — have an obligation to ensure plan member assets are not subject to excessive fees. To help ensure this, the DOL recommends a retirement plan fee review every three years.

As plan assets grow, administrative and investment fees should decrease. And while plan expenses may initially appear reasonable, additional fees may be hidden within administrative charges and fund expenses. Periodic benchmarking and due diligence can help reduce those fees, saving participants money and improving retirement readiness. Even a 0.5% reduction in fees can result in significant plan savings. For example, a retirement plan with 100 participants and $5 million in plan assets could save $25,000 per year — or $250,000 over 10 years.