Employee Retirement Plans Pricing

The total costs for implementing an employee retirement plan are not easy to pin down. While administration is relatively simple, you still have to pay for just about every service from the initial plan implementation to year-end tax filings to account withdrawal requests.

Traditional 401k plans

Generally, you’ll pay about $5,000 to $12,000 or more per year for a traditional 401k plan. This amount will vary greatly based on the number of employees you’re covering, the services you need, and how much you will have invested at once.

These costs consist of:

• Setup fees ($500 to $3,000)
  Annual administration ($1,000 plus quarterly charges of $20 to $50 for each employee)
• Discrimination testing ($800 to $2,500).
• Rollovers from previous employers ($800 to $1,500)
• Personalized investment advice ($100 to $250 per hour, although some providers will entitle employees to one hour of general consultation for free)
• Selling or transferring funds (0.25% to 1% of total assets)
• Loans for participants younger than 59½ ($30 to $75 to process the paperwork)

Other employee retirement plans

If you decide to go with a non-traditional 401k plan such as an IRA, Simple 401k, or KEOGH, your costs will vary greatly from a nominal annual fee with asset management costs to a per employee price structure.

Again, you’ll pay far less for these types of employee retirement plans, but you will restrict the maximum amounts employees can contribute and you won’t get the same level of service from the provider.