Totaling all administrative, recordkeeping and investment fees, the median participant-weighted ‘all-in’ fee for plans in the 2011 Defined Contribution/401(K) Fee Study was 0.78%, or approximately $248 per participant. The data suggest that the participant at the 10th percentile was in a plan with an ‘all-in’ fee of 0.28%, while the participant at the 90th percentile was in a plan with an ‘all-in’ fee of 1.38%.
The median participant ‘all-in’ fee of 0.78% of assets in the 2011 Fee Study is lower than that observed in the 2009 Fee Study, which was 0.86% of assets. The companies said there are a number of factors that may contribute to the decline in the ‘all-in’ fee between the 2009 Fee Study and the 2011 study.
These factors include different samples of plan sponsors; a larger survey population (over four times as large); different asset allocations (some driven by market performance between the two years); and different fee structures within the industry.
One reason for the lower median ‘all-in’ fee in the 2011 Fee Study versus the 2009 Fee Study may also be related to the relationship between asset-based fees and non-asset-based fees. When plan asset information was collected in the 2009 survey, investment markets had just experienced the turmoil of the ﬁnancial crisis of late 2008. Since that time, ﬁnancial markets have rebounded and total plan assets have grown. As deﬁned contribution plan assets grew, the non-asset-based fees would have been spread out over a larger asset base, causing them to fall as a percentage of assets.