Retirement Plan Fees: Are You Being Overcharged?

August 9, 2023

There are nearly two dozen fees that can be charged to retirement savings plan sponsors and participants. Your organization is likely being overcharged for its 401(k) or 403(b) plan — and those costs can be significant.

Under the Employee Retirement Income Security Act (ERISA), employers are responsible for knowing the full extent of all expenses borne by their retirement plans and determining if they are reasonable. Conducting a benchmarking analysis of your plan’s fees can help you understand these expenses and explore methods for reducing costs.

Benchmarking Can Rein in Excessive Fees

It’s important for employers to understand the multiple types and ways fees are charged for retirement plans through:


While there are just three categories of fees for retirement plans, there are levels and layers within these categories that increase the complexity of retirement plan costs. As a result, many employers do not understand the full extent of the fees that can be charged, and they – and their plan participants – may be paying too much.

For example, advisory and recordkeeping fees are often embedded to pay the advisor or broker associated with the plan. Benchmarking your plan to evaluate those charges is key to providing opportunities to negotiate for fee reductions, which may range from several thousand dollars to more than $100,000.

Finding Excess Fees, Negotiating Reductions

USI Consulting Group (USICG) delivers a customized fiduciary expense reduction analysis for clients. USICG independently benchmarks and evaluates all fees. We compare your plan against others using our proprietary process:


USICG’s consultants act as co-fiduciaries for clients, helping employers mitigate risk in the administration and investment oversight for their plans.1 The benchmarking and analyses conducted indicate most employers are being overcharged for fees on their plans, with USICG finding fee savings in over 75% of the retirement plans we review.2 Determining where fees can be reduced and negotiating fee reductions are important services that help employers lower plan costs and avoid potentially costly penalties, fines or legal exposure.

Case Study: Lower fees, increased services

For a Midwest food and hospitality provider, USICG’s benchmarking and evaluation services resulted in tremendous recordkeeping fee savings. The client hired USICG as the plan’s co-fiduciary investment advisor and plan consultant. USICG used its proprietary database to benchmark the plan and noted opportunities to lower fees.

Through a fee negotiation with the recordkeeper, USICG leveraged its market scale and recent request for proposal to secure a 52% reduction of annual recordkeeping fees, while enhancing services to alleviate administrative issues including the streamlining of payroll processing.3

1 Investment advice provided to the Plan by USI Advisors, Inc. Under certain arrangements, securities offered to the Plan through USI Securities, Inc. Member FINRA/SIPC. Both USI Advisors, Inc. and USI Securities, Inc. are affiliates of USI Consulting Group.

2 Cost reductions to the plan will vary and are dependent upon various factors including, but not limited to plan size, total assets held, management fees, administrative costs and services provided.

3 Actual results will vary. The use of any stated benefits in this case study is intended for illustrative purposes only and may not be used to predict or project future results.

This information is provided solely for educational purposes and is not to be construed as investment, legal or tax advice. Prior to acting on this information, we recommend that you seek independent advice specific to your situation from a qualified investment/legal/tax professional. | 1023.S0721.0063