Frequently Asked Questions

The data is collected and drawn from a combination of provider fee schedules and documents, request for proposal responses, 5500 filings and fee disclosure forms.

Data has been updated through September 30, 2022.

We do not release the names of the providers or products in the 401k Averages Book database. The database is comprised of a wide range of providers and products including many of the largest and most recognized providers and products in the marketplace.

A “provider” is the mutual fund company, insurance company, etc. providing the 401(k) service offering to the marketplace. The “product” is the offering made available, by the “provider” to the marketplace. A “provider” might offer multiple “products”, such as a large market product, mid-market product and small market product.

The 401k Averages Book database does not consist of “plan” data but instead is made up of “products”. See Questions 1, 2 and 5 for more information.

The term “participant”, for the purposes of the book, represents anyone with an account balance in the plan.

No.

Yes. The database includes direct and broker/ advisor distributed products.

The term “investment expense”, for the purposes of the book, represents any asset based charges applied to plan assets. To the extent that investment management fees, fund expense ratios, 12b-1 fees, sub-transfer agent fees, contract charges, wrap and advisor fees or any other asset based charges are a part of a particular product in the database they are included in the “investment expense” of that product. Thus by extension the average “investment expense” calculation includes all of the above charges.

The term “recordkeeping and administration”, for the purposes of the book, represents any hard dollar charges for recordkeeping and administration services. To the extent that testing, 5500 form preparation, non-discretionary trustee, communications and document preparation or any other recordkeeping and administrative services are part of a particular product in the database they are included in the “recordkeeping and administration” of that product. Thus by extension the average “recordkeeping and administration” calculation includes all of the above charges. Participant initiated transactions such as loans, distributions and QDRO’s are not included in “recordkeeping and administration”.

Yes, see questions 9 and 10.

Yes, “total” includes the sponsor’s portion and the expenses passed on to the participant. “Total” includes all of the investment, recordkeeping & administration, non-discretionary trustee, testing and 5500 preparation costs associated with a particular product. It does not include participant initiated transactions such as loans, withdrawals or other forms of distributions.

Yes. Charts x.6–x.8 illustrate the average per participant costs while splitting the investment cost into net investment and revenue sharing. “Net Investment” is the portion of the “Investment Expense” retained by the investment manager. “Revenue Sharing” is the portion of the “Investment Expense” received by other service providers to the plan. These other service providers could include but are not limited to recordkeepers, advisors and platform providers.

The asset allocation for each scenario is; 44% Large Equity, 10% Stable Value, 7% International Equity, 8% Fixed Income, 31% Balanced/Target Date. The Balanced/ Target Date allocation represents the average of the Balanced and Target Date investment options.

Each product universe is sorted based on expenses, from the lowest to highest. The universe is then divided into four equal parts, termed quartiles. Each quartile contains 25% of the total products in the universe and is designated by a different color.

All data in the book represents the “Average” costs for the universe, except for the Investment and Total Bundled Cost Quartile Chart which illustrates the “Median” costs for the universe.

The definition for both terms is as follows:

Average: Also known as Mean, is the sum of the values in the universe divided by the number of values in the universe.

Median: The median is the middle number of the distribution: half the numbers are above the median and half are below the median.

If the answer to your question is not found in this section, please submit your questions using the form.