Human Interest Research: Over 70% of SMBs Say Transaction Fees Are Breaking Their Benefits Budget

• 63% of employers say participants withdrew from a plan because of unexpected fees
• Extra services and plan event fees consume up to 60% of SMBs’ total retirement costs
• 6 in 10 SMBs report paying fees they didn’t anticipate when selecting their retirement plan
  
  

SAN FRANCISCO, May 05, 2026 (GLOBE NEWSWIRE) -- A new report from Human Interest shows small businesses are being systematically charged unexpected fees for retirement plans, with negative consequences for plan sponsors and participants. In connection with Small Business Week, the survey released today reveals many small business employers are paying transaction fees, administrative fees, and service fees they didn’t plan for — and some are forced to cancel their benefit plans altogether as a result.

Two-thirds (63%) of small and mid-sized businesses (SMBs) surveyed report paying fees they didn’t anticipate when selecting their current retirement plan provider. These include charges for third-party services such as auditors and ERISA counsel; value-add services, such as fidelity bond and compliance support; and routine plan events, such as participant searches, compliance updates, and IRS filings — services that are mandatory or standard administrative processes for retirement plans. Survey results reflect self-reported employer perceptions and do not represent an assessment of any provider’s disclosure practices.

“Small and medium-size businesses are being nickel-and-dimed for every retirement plan transaction, distribution, and plan event,” said Rakesh Mahajan, Chief Revenue Officer, Human Interest. “Transaction fees add up — in administration time, in cost, and in confusion for employees. These employers are the key to better retirement security for American workers, and should not be treated like a revenue stream. Transparent, predictable pricing is the standard the industry should be held to.”

The impact of transaction fees
Human Interest surveyed 500 benefits decision-makers at SMBs, excluding Human Interest customers, about retirement plan costs. Employers surveyed report that additional services and plan event fees consume up to 60% of their total plan costs. A majority (73%) reported that these fees drove up the overall cost of their benefits program, forcing employers into tough tradeoffs:

• 13% terminated their plan because they couldn't afford additional, unexpected costs.
• 26% lowered their matching contribution to save money.
• 31% cut other benefits to compensate.
• 27% switched to a provider with more transparent pricing as a result of unexpected fees.
  
  

Employees pay the price
SMBs report transaction fees are a burden for workers. Survey respondents indicate that fees charged to access savings have generated confusion, complaints, and, in some cases, prompted participants to withdraw from the plan. The data underscores the real-world consequences of per-transaction cost structures, which can fall disproportionately on lower-balance participants.

• Eight in ten (81%) respondents said providers charge employees fees for hardship withdrawals and loan originations.
• 63% reported participants have withdrawn from the plan because they’ve found transaction fees unaffordable, unexpected, or confusing.
• Nearly half (49%) said complaints and support tickets increased because employees are frustrated, confused, or surprised by these fees.
  
  

PEPs: a costlier alternative for many SMBs
The research uncovers counterintuitive findings about the value of pooled employer plans (PEPs), actively marketed to small businesses as a simpler and more cost-effective alternative to standalone 401(k)s. PEP sponsors reported they were far more likely than 401(k) sponsors to have paid unexpected fees (89% vs. 53%), and spent about 65% more in total annual plan costs than 401(k) sponsors. A quarter (24%) hired ERISA counsel, despite PEPs being specifically designed to offload fiduciary liability from the employer. And PEP sponsors spent 81% more time each week managing the plan than 401(k) sponsors, undercutting a core selling point.

“The PEP market was founded on the promise of simplicity and cost efficiency — but that’s not what’s happening. Our data suggests that SMBs in PEPs are reporting higher total costs and more administrative burden than many may expect, including ERISA counsel costs that PEPs are designed to reduce,” Mahajan added. “We believe the industry needs to do better. That’s why we’re building a modern 401(k) with no transaction fees,¹ a Price Match Guarantee,² and the first-of-its-kind Customer Experience Guarantee.”³

Time is money: Transaction fees add hours of work for administrators
For many small and mid-size business owners, overseeing third-party services and administrative fees has become almost synonymous with managing the retirement plan itself. On average, respondents dedicated 4.2 hours per week to overseeing third-parties, value-add services, and participant issues related to individual transaction fees, amounting to 93% of the total time they spent administering the benefit. Based on respondents’ average salary reported in the survey, this amounts to roughly $12,870 a year spent managing fees instead of running their business.

The end of transaction fees
Human Interest estimates transaction fees could have added up to nearly $4 billion in expenses for participants and administrators in 2025. That same year, Human Interest helped customers avoid paying more than $50 million in transaction fees. This Small Business Week, Human Interest is calling for a shift toward transparent, predictable pricing that supports retirement outcomes for businesses of all sizes.

Human Interest is the first retirement plan provider to eliminate 401(k) transaction fees for plan sponsors and participants¹ — included as part of Human Interest’s bundled platform pricing, which covers plan administration, recordkeeping, and advisory services through Human Interest Advisors LLC (HIA). Unlike transaction-based models, Human Interest charges a flat monthly per-participant fee and an asset-based advisory fee, with transparent pricing published on its website at humaninterest.com. For details and more data, including an infographic of the research findings, visit here.

Survey methodology:
The study conducted by Talker Research surveyed 500 US-based benefits decision-makers at small businesses offering a 401(k) or PEP between March 3 and March 12, 2026, using a random double-opt-in methodology. Respondents had owner, partner, C-suite, or senior management titles and were responsible for managing, administering, evaluating, or selecting retirement benefits at their small business (fewer than 1,000 employees). Survey takers were non-Human Interest customers, participated anonymously, and were invited to take the survey by Talker.

About Human Interest
Human Interest, Retirement Industry Disruptor^TM, is focused on fixing a broken industry that often relies on legacy technology, manual processes, and offshored service models. Human Interest is transforming the way 401(k)s and 403(b)s should work, including several industry firsts: eliminating transaction fees,¹ offering a cash-back incentive program for plan participants,⁴ and the first-of-its-kind money-back customer experience guarantee³. Founded in 2015 and headquartered in San Francisco, Human Interest has helped provide retirement benefits to employees at over 45,000⁵ companies and counting. For more information, please visit humaninterest.com.

Media Contact
Maura Lafferty
Firebrand Communications for Human Interest
humaninterest@firebrand.marketing
415.848.9175

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¹ For non-rollover distributions, shipping and handling fees may apply to requests for check issuance and delivery.
² See Terms and Conditions.
³ Participants are eligible for a maximum of four (4) successful claims per calendar year, with a limit of 1 (one) claim per month, and must submit a claim form. See full Terms and Conditions.
⁴ 3% cash back is available to eligible individuals making $60,000 or less in gross income and contributing at least 8% of every paycheck to an eligible Human Interest plan over a 12-month period. Must submit a claim form to claim the award. Minimum award is $100 and max is $250. Additional requirements apply. See terms and conditions.
⁵ Represents the total number of active employers with Human Interest retirement plans, based on the latest data available.

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