Small Business 401(k) Plan Average Fees

The cost of a small-business 401(k) plan can vary considerably depending on the number of participants, total plan assets, plan design, service providers, and investments offered.

Common expenses may include:

• One-time setup or conversion fees

• Annual recordkeeping and administrative fees

• Per-participant charges

• Compliance testing and third-party administrator fees

• Financial advisor or investment fiduciary fees

• Investment expenses and participant transaction fees

Some expenses are paid directly by the employer, while others may be deducted from plan assets or participant accounts.

According to a Morningstar analysis of BrightScope/ICI data, 401(k) plans with less than $1 million in assets had an average total cost of approximately 1.26%.

However, this is only a general benchmark. Two similarly sized plans may have very different costs based on their participation, services, investments, and pricing arrangements.

Because small-plan costs can vary so widely, business owners should review both the dollar amount and percentage of plan expenses—and understand which fees are paid by the company and which are charged to participants.

Information current as of September 18, 2026. The cited cost benchmark is based on BrightScope/ICI data analyzed by Morningstar in March 2024. Actual costs vary by provider and plan.

According to the 26th edition of the 401(k) Averages Book, investment expenses, recordkeeping costs, and advisor compensation generally continued to decline from 2024 to 2025.

For example, a hypothetical 50-participant plan with $5 million in assets had an average total plan cost of 0.96% in 2025, down from 1.00% in 2024. A similar plan with $2.5 million in assets averaged 1.17%, while a plan with $500,000 averaged 2.30%.

Smaller plans typically pay a higher percentage because administrative and recordkeeping costs are spread across fewer participants and assets. However, these figures are general benchmarks. Actual costs depend on the plan’s investments, services, design, and pricing arrangements.

Information current as of September 18, 2026. The cited benchmarks use plan data through September 30, 2025.