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How do I find out the amount of fees being charged for my 401(k)? What percentage is standard and what percentage is too costly?


If your employer is large enough, it will have a benefits department. The 401(k) administrator can probably be found there or in the personnel department. To find out what the annual expenses are, just ask. The average cost of operating a 401(k) depends on the number of plan participants. The average is smaller for larger employers because they can spread out fixed costs among more employees and perhaps because they can cut a better deal with financial-service firms that invest the assets.
According to 2010 data from “The 401k Averages Book,” it costs 1.33 percent of assets a year to run a plan with 100 participants and 1.11 percent for a plan with 1,000 participants. The book found a wide variation in costs for 100-participant plans, 1.2 percentage points between most and least expensive. There is no hard and fast rule to determine whether a plan is too expensive, but if the cost of the one at your company is half a percentage point more than the average for plans with roughly the same number of participants, you may want to ask why.
-Conrad de Aenlle