Recordkeeper Fees Explained

The recordkeeper is the operational backbone of your 401(k) plan. They process employee contributions and employer matches, maintain individual participant accounts, handle loan processing and distributions, manage the investment fund lineup, and provide the participant-facing website and mobile app.

For most plans, recordkeeping is the single largest fee category — and often the area with the most room for negotiation.

How Recordkeepers Charge

Per-Participant Fee

Most recordkeepers charge a per-participant fee — a fixed dollar amount for each eligible employee (or each active participant with a balance) per year. This is the most transparent fee structure and the easiest to benchmark. Typical ranges:

• Small plans (< 50 participants): $90 – $300/participant
• Mid plans (50–999 participants): $45 – $160/participant
• Large plans (1,000+ participants): $30 – $85/participant
• Mega plans (5,000+ participants): $20 – $65/participant

Asset-Based Fee

Some recordkeepers charge a percentage of plan assets (typically 0.05% – 0.25%), sometimes in addition to per-participant fees. Asset-based recordkeeping fees grow automatically as your plan grows — making them expensive for large plans.

Revenue Sharing

Many recordkeepers receive revenue sharing from mutual funds in the plan's investment lineup — typically 0.05% to 0.25% of assets in revenue-sharing-eligible funds. This reduces (or sometimes eliminates) the direct fee you pay, but the cost is ultimately borne by plan participants through higher fund expense ratios.

Plans that use index funds or zero-revenue-sharing funds pay higher direct recordkeeping fees but have lower total costs overall. Understanding this trade-off is a key fiduciary skill.

Negotiating Recordkeeper Fees

Recordkeeping is competitive. If you've never issued an RFP, you're almost certainly paying more than the market rate. Key levers:

• Competitive bid: Getting quotes from 3 or more recordkeepers typically drives fees down 20–40%.
• Plan growth: As your plan grows in assets and participants, your bargaining position improves — but only if you ask.
• Investment menu simplification: Fewer, simpler investment options reduce operational complexity and can lower fees.

Benchmarking Your Recordkeeper

The simplest benchmark is per-participant cost. Take your total annual recordkeeping fees (from your 408(b)(2) disclosure) divided by your participant count. Compare that number to the market ranges above for your plan size.

FEEDUCIARY automates this calculation and shows you where your plan falls on the market range — below, at, or above benchmark — in under 10 minutes.