Procurement Market Intelligence Report
401(k) Administration Services
Sourcing Guide & Market Intelligence
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401(k) Administration Services Global Overview
Definition
Summary
Providers of market services assist management and human resources (HR) personnel in the design, recordkeeping, and management of their employees' retirement plans. Suppliers process employee claims related to retirement plans in order to free up buyers' internal resources.
This Report Includes:
- Retirement Plan Management
- Retirement Plan Design
Not in this Report:
- Compensation & Benefits Planning Services
- Insurance Claims Processing Services
Classification:
Global 401(k) Administration Services Procurement Trends
Discover the top international trends affecting procurement in the global 401(k) Administration Services market.
Warning Trends
Fed lowers rates for the first time in 2025
- On September 17, the Federal Reserve’s Federal Open Market Committee (FOMC) voted to lower interest rates to a target range of 4.0% to 4.25%, down 0.25% from the rate it had been holding since November of last year.
- Despite indications at the start of the year that steady reductions to the relatively high 4.25% to 4.5% rate were on the horizon, the Fed held off on rate cuts for much of the year due to concerns that the combination of higher tariffs and a reduction in borrowing costs could cause rebounding inflation.
- The September cut to Fed interest rates signals a shift in this strategy, indicating that the Fed now considers weakening employment figures a greater threat than inflation. As a result, FOMC officials have also signaled that two additional rate cuts are likely before the end of the year in an effort to fight unemployment and stimulate the economy.
- Declining Fed funds rates will provide relief to borrowers by lowering the market interest rates for consumer and business loans. This reduction in the cost of borrowing will reduce the cost of many banking and financial services, and may spur increases in demand across the economy.
The European Union’s Artificial Intelligence (AI) Act enters into force
- In August 2024, the European Union (EU) began enforcing its new regulation on artificial intelligence. Although EU legislation, the act will have a major effect on global technological companies operating in the AI space, similar to the General Data Protection regulation.
- The legislation aims to apply a risk-based framework to AI regulation, meaning different AI applications will be treated differently. The law applies a general ban for “unacceptable” uses, such as social scoring and predictive policing.
- For general-purpose AI models, companies will be required to comply with EU copyright law and intellectual property provisions, carry out regular testing, issue transparency disclosures, and implement adequate cybersecurity protections. For “high-risk” AI applications, such as autonomous vehicles, medical devices, financial services, and biometric identification systems, companies must meet stricter requirements in terms of risk-mitigation systems, documentation, human oversight, and cybersecurity.
- Companies that breach the AI Act may face fines ranging from 7.5 million euros or 1.5% of global annual revenues to 35.0 million euros or 7.0% of global annual revenues, whichever amount is higher.
- While the blanket ban on unacceptable systems entered into force in February 2025, most of the obligations do not take effect for a full year. In August 2025, requirements for general-purpose AI will come into effect, and in August 2026, obligations for high-risk AI systems will be enforced.
Neutral
Inflation climbs above 3.0% for the first time in seven months
- In January, the Consumer Price Index (CPI) 12-month inflation rate, the most commonly used measure of inflation, rose by 0.1% to 3.0%, the highest it has been since June 2024.
- This uptick in inflation follows cuts to interest rates which may have added to consumer demand, fueling higher consumer prices.
- Additionally, the threat of impending tariff hikes has driven preemptive stockpiling by importers, adding to demand and price growth across a range of industries in the United States.
- While inflation is still low relative to previous years, sustained recent increases in inflation and the potential effects of tariffs, such as the recently implemented 10.0% on all Chinese goods, mean prices are still rising at a faster-than-normal pace.
Global 401(k) Administration Services Market - Suppliers by Region
| Country/Region | Number of Suppliers |
|---|---|
| #1 China | 285 |
| #2 United States | 200 |
| #3 Europe | 180 |
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2
Geography Drilldown - US
Average Cost of 401(k) Administration Services
United States
2026 Market Pricing$1.00 to $XXX.XX
per employee per monthAverage Price
Prices in the 401(k) Administration Services market range from $1.00 to $XXX.XX, depending on Management Style, Portfolio Volume, Number of Participants and Plan Features. For example, lower prices are associated with Passive management, whereas higher prices are associated with Active management.
Need the scoop on international price trends?
Between our Europe and Canada collections, we provide price data for 350 markets so you can instantly compare prices across borders. Or, use our custom research services for intel on prices in any region across the globe.
401(k) Administration Services Category Price Trends
Pricing trends are indicated by the compound annual growth rate (CAGR) during a set period of time. For the 401(k) Administration Services market, prices in the US have grown 3.5% from 2022 to 2025. Meanwhile, the recent three-year CAGR for Europe is --0.0%.
United States (2022-2025)
Europe (2022-2025)
Compound Annual Growth Rate
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Price trend forecasts are available to subscribers, along with price driver projections and forward-looking cost structure data.
Cost Analysis - Total Cost of Ownership for 401(k) Administration Services
Total cost of ownership is High in the 401(k) Administration Services market. The average cost of ownership differs depending on the contract but generally includes costs negotiated before the contract begins, costs billed during the contract period and unforeseen costs. For example, unforeseen costs in the form of Cancellations may raise the total cost of ownership unexpectedly.
Negotiated Before
Set Up Fees
Billed During
Support
Unforeseen
Cancellations
Buyer Power in Procurement Negotiations
In 2026, buyer power amounts to -1.7 in the United States. Buyer power is most positively impacted by Availability of Substitutes. It is most negatively impacted by Recent Price Volatility. Subscribers can access details on eight other factors that impact buyer power. Learn more
United States
Buyer power forecasts: your glimpse into the future
Develop strategies for the upcoming year and identify unforeseen opportunities for buying now
- Actionable "Buy Now" and "Buy Later" insights
- Near-real-time updates to current and forecast Buyer Power Scores
- Methodology and weightings for Buyer Power Score Components
Supply Chain Risk
The average level of supply chain risk is assessed as Low, which has a positive impact on buyer power. The level of supply chain risk is affected by industry volatility, barriers to entry, competition, import penetration, regulation and industry financial risk. Buyers in this market can mitigate procurement and supply chain management risks by monitoring risk levels for individual first and second tier suppliers:
1st
Tier Suppliers
- Securities Brokers
- Portfolio Management Firms
- Computer & Packaged Software Wholesalers
- Commercial Real Estate Lessors
2nd
Tier Suppliers
- Business Analytics & Enterprise Software Wholesalers
- Computer Manufacturers
- Commercial Bankers
Biggest 401(k) Administration Services Suppliers in the US by Revenue
The largest 401(k) Administration Services vendors by revenue in the US are Wells Fargo & Company, Manulife Financial Corp and Aon Plc. Subscribers can sort and filter by market share concentration, profit level and other factors. Learn more
| Supplier | Operational Size | Headquarters | Number of Employees | Market Share (%) | Market Share Performance (3yr trend) | Total Revenue ($ million) | Profit Level (%) | Risk Level |
|---|---|---|---|---|---|---|---|---|
| Vanguard Group Inc. | Global | Valley Forge, PA | >10,000 | 5-10 | ||||
| FMR LLC | Global | Boston, MA | >10,000 | 5-10 | ||||
| Wells Fargo & Company | Global | SAN FRANCISCO, CA | >10,000 | < 5 | ||||
| Great-West Lifeco Inc. | Global | Winnipeg, CA | >10,001 | < 5 | ||||
| Principal Financial Services Inc. | Global | DES MOINES, IA | >10,000 | < 5 | ||||
| Aon Plc | DUBLIN 2 | >10,000 | < 5 | |||||
| Manulife Financial Corp | Global | Toronto, CA | >10,001 | < 5 | ||||
| Voya Financial Inc. | National | NEW YORK, NY | 1,001-10,000 | < 5 | ||||
| Paychex, Inc. | International | ROCHESTER, NY | >10,000 | < 5 | ||||
Looking for a list of suppliers by country?
Subscribers can access vendor information on Canadian and European suppliers, too. We also offer custom research services to help with vendor sourcing anywhere in the world.
Profit Analysis
The average profit margin across vendors in the 401(k) Administration Services market is 12.8% and steady. Profit levels shift depending on suppliers' spend on wages, purchases and overhead. The highest cost component for vendors is Wages. The cost trend for this component is falling, when considering movement between 2025 and 2026. To understand cost forecasts for 2027 and uncover the implications on profit, start your subscription. Learn more
Vendor & Supply Chain Analysis
On average, vendor risk in the market is considered low, indicating that buyers face a low risk of experiencing service disruptions due to financial instability among vendors.
The market has a low level of market share concentration, indicating that the major players do not control a considerable portion of total market revenue and vendors in the market operate in a highly competitive manner.
The market has a low level of supply chain risk, indicating that buyers are unlikely to face service disruptions due to issues in vendors' upstream supply chain.
Vendors in the market regularly use computers to provide services. The United States is a net importer of computers, indicating a wide availability of computers to select from at a competitive price point as domestic producers compete with foreign vendors, helping keep operating costs low.
Supplier Information
FMR LLC
FMR LLC is a private company operating globally in the finance & insurance sector. The company's offerings include investment management services and 401(k) administration services. Founded in 1946, the company is currently headquartered in Boston, Massachusetts, United States of America with an estimated... Subscribe to learn more
Vanguard Group Inc.
Vanguard Group Inc. is a private company operating globally in the finance & insurance sector. The company's offerings include investment management services and 401(k) administration services. Founded in 1975, the company is currently headquartered in Valley Forge, Pennsylvania, United States of America Subscribe to learn more
Aon Plc
Aon plc is engaged in the marketing and servicing of a range of management and financial services spanning risk managementm insurance and reinsurance brokerage, and human resource consulting and outsourcing. Its business is divided into two segments: Risk Solutions (risk management through insurance advisory,... Subscribe to learn more
Great-West Lifeco Inc.
Great-West Lifeco Inc. is a public company operating globally in the finance & insurance sector. The company's offerings include 401(k) administration services. Founded in 1891, the company is currently headquartered in Winnipeg, Canada with an estimated employee count of over 10,000. Subscribe to learn more
Manulife Financial Corp
Manulife Financial Corp is a public company operating globally in the finance & insurance sector. The company's offerings include life insurance and 401(k) administration services. Founded in 1999, the company is currently headquartered in Toronto, Canada with an estimated employee count of over 10,000. Subscribe to learn more
Massachusetts Mutual Life Insurance Co
Massachusetts Mutual Life Insurance Co is a private company operating nationally in the finance & insurance sector. The company's offerings include equipment financing services, life insurance, disability insurance and 401(k) administration services. Founded in 1851, the company is currently headquartered... Subscribe to learn more
Paychex, Inc.
Paychex, Inc. is a human capital management (HCM) company delivering a full suite of technology and advisory solutions to clients and their employees across the US and parts of Europe. It provides human resources, employee benefit solutions, insurance, and payroll processing through three technology platforms:... Subscribe to learn more
Principal Financial Services Inc.
Principal Financial Group, Inc. is a global financial services company offering businesses, individuals, and institutional clients a wide range of financial products and services. It organizes its business into three reportable segments: the Retirement and Income Solutions segment, which provides a portfolio... Subscribe to learn more
Voya Financial Inc.
Voya Financial Inc. is a public company operating nationally in the finance and insurance sector. The company's offerings include 401(k) administration services. Founded in 1991, the company is currently headquartered in NEW YORK, New York, United States of America with an estimated 6100 employees. Subscribe to learn more
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Procurement Management KPIs for the 401(k) Administration Services Market
Managing vendor performance throughout the contract period is easier when tracking specific key performance indicators (KPIs). For example, buyers should monitor Current Ratio (Assets/Liabilities) and Customer Complaints. Buyers may experience better performance throughout their contracts if they establish service level agreements (SLAs) based on Customer Support and other factors.
| KPI | Level of Importance (1-5) | Measurements | Key Considerations |
|---|---|---|---|
| Current Ratio (Assets/Liabilities) |
|
Review financial statements Request financial data |
The current ratio represents a company’s liquidity. The current ratio can be used to determine a company’s ability to utilize its current assets to satisfy its current liabilities. It can also be used to determine the financial stability of a vendor to ensure service continuity. |
| Customer Complaints |
|
Total employee complaints Past client reviews and referrals |
Buyers should measure the level of satisfaction among their employees to ensure the plan administrator is suitable for their business. Comparing internal complaints regarding the administrator with the vendor's past reviews will be an indication of whether the complaints are isolated or reoccurring issues among the vendor. |
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Questions to Ask During Procurement Negotiations
How can I gain leverage during negotiations?
Experience and Expertise
On average, how many clients does each plan administrator handle?
What type of training is provided to new employees before they begin working on client plans?
Service Performance
How do you allocate earnings? What fees are charged for our plan, as a percentage of a participant's savings?
What are all of the components of the investment management fees paid by plan participants?
Regulation
How do you ensure your practices comply with existing regulations?
How does your company keep up to date about new or upcoming regulations?
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401(k) Administration Services RFP Guidelines
What should my RFP include?
Organizational Overview
Buyers should give company background, any important history, and relevant plans for the future.
Buyers should include information on the number of employees they have currently.
Statement Of Need
Buyers should outline the desired scope of services.
Buyers should indicate the number of employees eligible to participate and the number of active participants contributing to current 401(k) plans.
Project Budget
Buyers should explicitly highlight the number of employees and value of assets of their current plan as pricing will be centered around these factors.
Buyers should state expectations about related fees.
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Our Reports include:
- Opportunity assessment
- Market dynamics
- Recent developments
- Positive and warning trends
- Buyer power levers
- Price environment and market pricing
- Geographic wage rates
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- Total cost of ownership
- Cost structure benchmarks and analysis
- Supply chain and vendors
- Global supplier breakdown
- Market share concentration
- Regulation and business requirements
- Vendor management and KPIs
- Sourcing strategy guidance
