401(k) Fee Benchmarking: What It Is and How to Do It

401(k) fee benchmarking does not have to start with a consultant call. A strong first pass is to compare your plan against current Form 5500-based market data so you can see where your costs sit before you ask an advisor or recordkeeper for a deeper review. On our average 401(k) fee benchmark page, the 2024 national median all-in 401(k) fee is 0.39% based on 885,810 plan filings. The same dataset shows how much fees change by plan size: plans with fewer than 100 participants have a median fee of 1.51%, plans with 100 to 499 participants sit at 0.32%, and very large plans with 5,000 or more participants are closer to 0.10%.

Those figures are not a substitute for a custom vendor review, but they are enough to tell a committee whether fees look roughly on target, clearly high, or worth a second look. That makes public benchmarking one of the fastest ways to frame the conversation before you move on to advisor benchmarking, recordkeeper repricing, or a formal RFP.

Start With a Public Benchmark Before You Order a Custom Study

If you want a fast, no-friction first pass, start with the benchmark resources already on the site. The broadest entry point is our benchmark hub, and the most directly relevant page for this topic is Average 401(k) Plan Fees. From there, you can drill into plan-size cohorts such as 401(k) plans with fewer than 100 participants and 401(k) plans with 100 to 499 participants.

That sequence matters because fee benchmarking is only useful when the comparison group is close enough to your own plan. A 75-person plan should not expect the same pricing as a national mega-plan. Starting with a size-aware benchmark gives the committee a more realistic baseline before anyone starts arguing that a fee is automatically too high or too low.

Real Fee Levels Plan Sponsors Can Quote in a Committee Meeting

If you want a few reference points without clicking away, these 2024 benchmark levels are a practical place to begin:

• The national median all-in 401(k) fee is 0.39%.
• For plans with fewer than 100 participants, the median is 1.51%.
• For plans with 100 to 499 participants, the median is 0.32%.
• For plans with 500 to 999 participants, the median is 0.25%.
• For plans with 1,000 to 4,999 participants, the median is 0.17%.
• For plans with 5,000 or more participants, the median is 0.10%.

The smaller-plan data is especially useful because it also shows how wide the range can be. In the under-100 cohort, the 25th percentile is about 0.31%, the median is 1.51%, and the 75th percentile reaches 7.64%. That spread tells you two things. First, smaller plans often have noisier expense ratios than larger plans. Second, when a small plan looks expensive, you still need to understand what is driving the number before concluding the arrangement is unreasonable.

By contrast, the 100 to 499 participant cohort is much tighter: the 25th percentile is about 0.13%, the median is 0.32%, and the 75th percentile is 0.55%. If your plan falls in that range and is well above the median, that is usually a stronger signal that it is time to ask harder pricing and service questions.

What 401(k) Fee Benchmarking Actually Compares

A proper fee benchmark is not just a hunt for the lowest number. The real question is whether the total cost is reasonable for the services the plan and its participants receive. That usually means comparing recordkeeping, administration, participant support, payroll integration, investment oversight, fiduciary services, and any advisor compensation on an apples-to-apples basis.

This is why plan sponsors often look at more than one vendor lane while benchmarking. If you are reviewing recordkeeping options, pages like largest 401(k) recordkeepers, bundled 401(k) providers, and cheapest 401(k) providers can help frame who is active in the market and what type of provider model you are really comparing. If the benchmark suggests a change may be warranted, changing 401(k) recordkeepers is often the next operational question committees ask.

It also helps to separate bundled and unbundled pricing. Some providers wrap multiple services into one asset-based fee, while others break out administration, custody, advisory, and participant charges. A plan can look cheap in one line item but expensive once every indirect cost is included. That is why benchmarking should always focus on the all-in picture, not a single visible fee.

When a Public Benchmark Is Enough and When You Need an Advisor or Recordkeeper Review

For many committees, the public benchmark is enough to decide whether the current arrangement deserves closer analysis. If your fee level is near the middle of the right plan-size range and the service model is working, you may simply document the review and move on. If the plan appears materially above peers, the next step is usually to ask the current advisor or recordkeeper to explain the pricing and the services behind it.

An experienced 401(k) advisor can help normalize the comparison when things get messy. That includes revenue sharing, multiple share classes, managed account fees, one-off consulting charges, or legacy pricing structures that make a raw percentage hard to interpret. If your committee is deciding whether to hire or replace help, how to hire a retirement plan advisor and 401(k) advisor fees are good next reads.

Your recordkeeper can also play a role, especially if the goal is repricing the existing relationship rather than replacing it outright. In some cases, a benchmarking conversation is enough to negotiate lower costs or cleaner fee allocation. In others, the benchmark becomes the setup for a more formal market check or RFP.

Why Benchmarking Matters for Fiduciary Process

Benchmarking is not just a purchasing exercise. It is part of a prudent fiduciary process. Committees are expected to monitor whether plan fees remain reasonable relative to the services provided, and documenting that review is often as important as the answer itself. Using objective market data gives the committee a cleaner starting point for those discussions.

The same context shows up in other plan-administration workstreams too. Fee discussions often overlap with annual disclosure review, vendor oversight, and the data that eventually feeds into Form 5500 reporting. For larger plans, they also connect to audit readiness, which is why related topics like what is a 401(k) audit and 401(k) plan administration resources tend to surface around the same time.

A Simple Way to Use This Post

If you want a practical workflow, use this one:

1. Check the average 401(k) fee benchmark for a quick national baseline.
2. Open the closest size cohort, especially if your plan is under 500 participants.
3. Compare your all-in fee, not just one visible charge.
4. List the services you actually receive from the advisor, recordkeeper, and administrator.
5. If the number still looks high, ask the advisor or recordkeeper for a benchmarking explanation, repricing discussion, or formal market check.

That process gives plan sponsors something useful immediately, while still leaving room for a more customized benchmark when the plan needs it. In other words, the benchmark pages help you start the conversation with facts, and the advisor or recordkeeper helps you finish it with an actionable recommendation.