401(k) Fee Benchmarking

"Are our plan's fees reasonable?" is the question a CFO can least afford to answer from memory. Old Slip Capital benchmarks 401(k) plans for sponsors from 40 Wall Street in New York — independently, with no recordkeeper or fund company behind us.

What we compare

• Recordkeeping and administration, per participant and as a percentage of assets
• Advisory and investment management fees, including how they are collected
• Fund expense ratios, share classes available and any revenue sharing
• Custody, trustee and audit-support costs
• Participant-level charges: loans, distributions, managed accounts, advice
• Service scope actually delivered against what the agreement promises

How the review runs

1. We collect the service agreement, 408(b)(2) disclosure, fund lineup and plan data.
2. We build the plan's all-in cost by component — not just the headline number.
3. We compare it against plans of similar size, participant count and service scope.
4. We present findings to the committee with recommendations: renegotiate, change share classes, restructure how fees are paid, or run a full provider search.
5. We hand you the written report and minutes language for the file.

Why the documentation matters as much as the number

Fee litigation and DOL inquiries rarely turn on whether a plan was expensive. They turn on whether the committee can show it looked, compared, and reasoned. A benchmarking file kept on a stated schedule is the cheapest protection a plan sponsor can buy.

Common questions

How often should a 401(k) plan benchmark its fees?

Most committees benchmark annually and run a full provider search every three to five years, or sooner if headcount, assets or service levels change materially. What matters to a regulator is that the review happens on a stated schedule and is documented.

What counts as a reasonable 401(k) fee?

ERISA does not require the lowest fee — it requires fees that are reasonable for the services actually received. Reasonableness is established by comparison: same plan size, same asset level, same participant count, same service scope. A higher fee can be entirely defensible when the service level justifies it and the file shows the comparison.

Which fees should be reviewed?

Recordkeeping and administration, advisory or investment management fees, fund-level expense ratios and any revenue sharing, custody and trustee costs, plus transaction and participant-level charges such as loan or distribution fees.

What do we receive at the end of a review?

A written benchmarking report showing your plan's all-in cost against comparable plans by component, findings on anything out of range, recommended actions, and language your committee can carry straight into its minutes.