401(k) Fee Benchmarking
401(k) plan fiduciaries that have not benchmarked 401(k) Fee Benchmarking fees and expenses against market rates recently should do so in 2025, in light of legal victories secured by 401(k) plan participants. In several noteworthy cases, plan participants prevailed in lawsuits alleging that employers and plan fiduciaries allowed their 401(k) plans to charge excessive administrative and/or investment management fees and expenses. A few examples are noted below, but there are several others.
A service provider’s fee disclosure, standing alone, does not necessarily give the plan fiduciary adequate information to assess whether a fee is reasonable. Benchmarking a service provider’s fee against its peers allows plan fiduciaries to make “apples to apples” fee comparisons and, thus, more informed decisions. Fiduciaries should periodically solicit and review bids from at least three service providers to obtain fee and expense data and/or hire an independent consultant to conduct the search and make related recommendations. We will continue to monitor this trend in 2025.
Benchmarking Dispute Records
- Huizinga v. Genzink Steel Supply & Welding Co. In August 2013, the U.S. District Court for the Western District of Michigan ordered 401(k) plan fiduciaries to restore $321,000 to participants after concluding that they breached their fiduciary duties and paid excessive service provider fees to the plan’s third-party administrator.
- Nolte v. Cigna Corp. In July 2013, the U.S. District Court for the Central District of Illinois approved a $35 million settlement involving CIGNA and its 401(k) participants, alleging, among other things, breaches of fiduciary duty and payment of excessive service provider fees.
- Tibble v. Edison Int’l. In March 2013, the U.S. Court of Appeals for the Ninth Circuit ruled that Edison International’s 401(k) plan fiduciaries breached their duties by including retail shares of three mutual funds without first investigating the possibility of institutional-share class alternatives.
- United Health Care. In April 2021, After a long-fought legal battle, UnitedHealth Group agreed to pay $69 million to settle a class-action lawsuit alleging breaches of fiduciary duties under the Employee Retirement Income Security Act of 1974. The litigation, initiated in April 2021, centered on claims that UnitedHealth retained a poorly performing suite of target-date funds, the Wells Fargo Target Fund Suite, on its 401(k) investment menu. According to the plaintiffs, UnitedHealth’s financial relationship with Wells Fargo influenced the decision to keep these funds.
How much are you really paying for your 401(k)?
401(k) Fee Benchmarking
Even small differences in plan fees can make a big impact over time. Our fee benchmarking guide helps you uncover where your plan dollars are going — and where you can save.
Did you know you may be overpaying in 401(k) fees?
Many employers never take a closer look at what their retirement plan truly costs — and as a result, end up paying 20% to 40% more than industry averages. Hidden fees, outdated provider arrangements, or bundled service costs can quietly erode both employer budgets and employee returns.
Benchmarking your 401(k) fees isn’t just a best practice — it’s a fiduciary responsibility. Regular fee comparisons help ensure your plan remains competitive, compliant, and cost-efficient, protecting both your company and your employees’ long-term retirement outcomes.
By understanding where your plan stands relative to the market, you can identify unnecessary expenses, negotiate better pricing, and demonstrate prudent oversight under ERISA standards — all while improving plan value and participant satisfaction.
Everything you need to know about comparing 401(k) fees:
Our free 401(k) benchmarking guide walks you through every step of understanding and managing plan costs with confidence. You’ll learn how to identify which fees matter most, how to compare them against industry standards, and how to take action when your plan is paying too much.
Inside, you’ll discover:
The four major categories of plan expenses: recordkeeping, investment management, advisory, and administrative costs — and how each one impacts your participants’ long-term returns.
How to perform a quick self-assessment using your current fee disclosure statements, so you can spot red flags early.
How to read and evaluate fee disclosures (408(b)(2) statements) from your recordkeeper or TPA, and what questions to ask if the costs seem unclear.
When to request a formal benchmarking review — and how Admin316 can help you compare, negotiate, and document your fiduciary due diligence. We make it simple — no spreadsheets, no complicated math, and no guesswork required.
You’ll walk away knowing exactly how your plan stacks up and what steps to take next.
We save between 32% and 65% on average.
When plan sponsors understand where their dollars are going, real savings follow. On average, Admin316 clients reduce their plan expenses by 32% to 65%, often without changing recordkeepers or sacrificing service quality.
Through our benchmarking and fiduciary oversight process, we uncover unnecessary fees, negotiate lower costs, and help ensure your plan meets both ERISA compliance and cost-efficiency standards.
Example:
A company with 25 employees and $250,000 in plan assets typically pays about 2.10% in total annual fees. After a benchmarking review and fiduciary realignment, that cost often drops to 1.2% or less, saving over $2,250 per year — while improving transparency and participant outcomes.
Over a decade, those savings can exceed $20,000–$30,000, directly benefiting both the business and its employees.
Stop Overpaying: Get Your 401(k) Fee Benchmarking Report Today
Ensure your retirement plan fees are competitive, compliant, and aligned with industry standards—most employers are overpaying and don’t even know it.
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