401(k) Fees Explained: What You’re Really Paying — And Who’s Actually Overseeing the Plan

Most business owners don’t know exactly what they’re paying for their 401(k).

Not because they don’t care — but because retirement plans often involve multiple vendors, layered pricing, and unclear responsibilities.

And in many cases, nobody is truly overseeing the whole picture.

That’s where plans quietly drift:

• fees go unchecked
• expensive funds stay in place
• providers stop communicating
• participant issues bounce between departments
• nobody reviews anything until there’s a problem

Most plans don’t have a catastrophic fee problem.

They have a visibility and oversight problem.

Who’s Running Point on the Plan?

Most companies already have:

• a payroll provider
• a recordkeeper
• investment options
• compliance support
• multiple vendors touching the plan

But when something comes up:

• who handles it?
• who notices issues early?
• who reviews fees and investments over time?
• who coordinates vendors?
• who helps employees when things get confusing?

That operational layer is often missing.

That’s the role I fill for my clients.

I help companies oversee the operational and fiduciary side of the plan — not just the investments.

Hardship request?
Loan issue?
Payroll problem?
Audit prep?
Participant confusion?
Vendor finger-pointing?

You call me. I handle it.

The 3 Main Types of 401(k) Fees

Most plans have three primary layers of cost.

1. Investment Fees

These are the expense ratios inside the mutual funds or investment options.

👉 Typical range: 0.03% – 1.50%+

This is where plans can quietly become expensive — especially when proprietary or outdated fund lineups go unchecked for years.

2. Recordkeeping / Platform Fees

These are the fees charged to operate the plan itself.

👉 Typical range:

• Often there’s a base fee of $500-$3,000
• Plus a per participant/year fee
• And/or an asset based fee that could be 0.10% – 0.50% or more
• It varies across the industry and is sometimes hard to decipher on your own

These costs are often bundled into the platform and not always obvious at first glance.

3. Advisory / Administrative Fees

This is the cost for the people responsible for helping oversee, maintain, and support the plan.

That can include:

• advisors
• TPAs
• consultants
• administrative providers
• auditors

Fees may be:

• flat
• per participant
• asset-based
• or bundled into another arrangement

This is also where value matters most.

Because the real question isn’t just:

“What am I paying?”

It’s:

“What am I actually getting?”

What a “Normal” 401(k) Costs

For a small to mid-sized plan (under $5m in assets):

👉 Roughly 0.50% – 1.50% all-in is fairly common.

But two plans with similar costs can be completely different experiences.

One may be:

• actively overseen
• reasonably priced
• operationally smooth
• strategically reviewed

Another may be:

• neglected
• overpriced
• reactive
• slowly drifting over time

The difference usually isn’t one giant fee.

It’s whether someone is actually paying attention.

Where Plans Quietly Go Wrong

Usually it’s not one catastrophic mistake.

It’s a combination of small things:

• layered fees nobody reviews
• revenue sharing that goes unchecked
• expensive share classes left in place
• participant issues bouncing between vendors
• advisors who disappear until renewal meetings
• no ongoing benchmarking or operational review
• nobody clearly owning the plan

That’s how plans drift.

What Actually Matters

The goal isn’t the absolute lowest fee.

It’s a plan that is:

• reasonably priced
• actively overseen
• operationally smooth
• aligned with your business goals

That requires judgment, ownership, and accountability — not just a platform.

How I Structure My Fees

There’s no universal pricing model that fits every retirement plan.

Some plans are straightforward.
Others involve multiple vendors, operational complexity, payroll integration issues, audits, custom plan design work, or a higher level of ongoing support.

That’s why I price plans case by case.

In many situations, fees end up somewhere around:

• ~0.25%-0.50% of plan asasets
• or roughly ~$150 per participant annually

But the structure depends on the plan itself and the level of involvement required.  I try to price the plan commensurate with the work involved and the liability taken on to help oversee the plan.

More importantly, many plans that come to me already have more than enough compensation built into the existing arrangement — it’s just often spread across providers, buried in bundled pricing, or going toward services the sponsor barely uses or frankly isn’t getting.

The issue usually isn’t:

“Is someone getting paid?”

It’s:

“Is anyone truly accountable for overseeing the plan?”

In many cases, I’m not introducing an entirely new cost so much as replacing or restructuring compensation that already exists.

What You’re Actually Paying Me For

You’re not just paying for fund recommendations.

You’re paying for:

• operational oversight
• participant support
• fee and investment monitoring
• vendor coordination
• audit preparation support
• compliance guidance
• strategic input as the company grows
• help when something breaks or doesn’t look right

Most importantly:

You’re paying for someone who actually understands how the whole system works and is willing to take ownership of it over time.

You’re not calling a generic support line and starting from scratch every time.

TPA & Administrative Costs

Administrative work still needs to happen.

That may be:

• bundled into a platform
• handled by a third-party administrator
• or structured separately

I’ll recommend the setup that makes the most sense based on:

• plan size
• complexity
• long-term goals
• operational needs

Not whatever generates the highest payout.

What I Don’t Do

• No commissions
• No revenue sharing
• No proprietary products
• No IRA cross-selling
• No treating the 401(k) as a side business

I work exclusively on corporate retirement plans.

Why Independence Matters

When fees aren’t clear, incentives matter.

Some providers:

• receive hidden compensation
• push proprietary funds
• bundle services in ways that obscure costs
• prioritize platform growth over oversight

Even when intentions are good, structure matters.

When you work with me:

• compensation is transparent
• decisions are independent
• recommendations are based on what actually fits your business
• and there’s a real point person overseeing the plan

Bottom Line

Most business owners aren’t looking for a “perfect” 401(k).

They want:

• reasonable costs
• good support
• competent oversight
• and confidence that someone is actually paying attention

That’s what I help provide.

Want a Second Opinion?

If you’re not sure what you’re paying — or whether your plan is actually being overseen properly — I’m happy to take a look.