Plan administration fees

What are 401(k) plan administration fees?

401(k) administration fees are the baseline operational costs of maintaining a retirement plan and keeping it in compliance with the Internal Revenue Service (IRS) and Department of Labor (DOL). They generally refer to the costs charged by a retirement plan provider or recordkeeper to manage the day-to-day operations of a company's retirement program.

What do plan administration fees cover?

A 401(k) plan administrator manages a retirement plan for a company and its employees. Their main responsibility is to ensure a retirement plan complies with IRS requirements for plan sponsors, including communications, plan maintenance, and disclosures. Retirement plan providers may charge 401(k) plan administration fees to cover the costs of these services.

Plan administration fees compensate the plan providers for essential maintenance—primarily recordkeeping, or the administrative process of tracking participant accounts, contributions, and transactions. They may also cover mandatory compliance tasks, such as conducting IRS-mandated nondiscrimination testing to ensure the plan doesn’t disproportionately favor highly compensated employees. In the broader industry, administrative expenses may also encompass 12b-1 fees, sub-transfer agent fees, contract charges, and wrap fees.

Who pays these 401(k) administration fees?

Administration fees typically fall on the employer (plan sponsor), the employees (plan participants), or a combination of the two. Employers may pay certain administrative costs on behalf of the plan. Participants may cover a portion of these costs through asset-based fees, which are calculated as a percentage of their assets and automatically deducted from their individual 401(k) accounts on a monthly or annual basis.

Administrative fee structures depend on your provider and selected services. For example, when you choose the Human Interest Complete or Concierge plan tiers, 3(16) administrative fiduciary services are included. This means we bundle key administrative responsibilities into our standard pricing structure to help support your plan management as your 401(k) partner.

Learn more about our simple, bundled pricing.

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Human Interest Inc. charges monthly recordkeeping and administration platform fees, and an asset-based advisory fee is charged by Human Interest Advisors LLC, a registered investment adviser — see humaninterest.com/pricing for current rates. These distinct fees are separate and must be evaluated together.