What is a fair fee to administer a small company 401k plan?

30 bps?

^AFAIK, the fund companies give you the option of offering .25, .50, .75, or doing it for free. (At least that’s how American Funds does it.)

Personally, I think a .75% 12b-1 fee is a ripoff. .5 is probably pushing it.

Fees will soon be capped at 75bps or less…all in…including fund expenses. Once these state run IRA’s are in place along with the DOL, a company with a 401K plan that is more expensive than the state’s plan will be exposing themselves to all types of lawsuits.


Thank you for the info. I am looking at it from the perspective of paying the fee to a vendor to administer the company 401k plan.

40 bps to 60 bps sounds fair

Received a quote for 30bps of AUM, so that sounds good. Thanks itera.

Record Keeper- $50 per year per participant. $1000 - $2000 annual minimum.

TPA - $45 per year per participant. $1000-2000 annual minimum.

Sometimes one-time small conversion fee, less than $1000.

These are actual numbers for a 50 employee company. No investment conditions.

If the company is really small, just let Fidelity administer for free.

The company I’m mentioning is about 50 people. What you say above is really cheap. Where can I find a deal like that?

Contact Newport Group and mention the fee schedule I posted, just to put them on notice that you’re not a patsy. They should, if nothing else, point you in the right direction. Of course, they will try to direct you toward more expensive options, just like Wells Fargo, “Eight is Great.” That firm I’m referencing has access to Vanguard Funds, among many others, and, if desired, a brokerage window for a nominal per year fee paid by participant that opens a window. None of this % of AUM bullshit. Record Keeping and TPA costs have nothing to do with the size of a plan.


Thank you very much for the information here and in the message!