My company was recently acquired and the 401(k) plan is being rolled into the acquiring company's plan. I'm a fan of indexing and was disappointed that the index funds in the new plan have between two to four times the expense ratios than equivalent index funds in the old plan. The justification given for the higher expense ratios was that the previous plan had apportioned the 401(k) plan fees more heavily towards the non-index investment options and the new plan apportions the plan fees evenly across all the investment options. Paraphrasing the justification, the index funds would no longer be able to "freeload" on the backs of the other investment options.
So that made me wonder:
Can expense ratios on investment options in a 401(k) plan contain part of the overall 401(k) plan fees? Can a plan be setup to shift the costs to a subset of the plan's investment options?
Edit: I've re-written the question to removing the confusion about the type of fees/costs/expenses.
Update: I've looked through the plan prospectus and besides listing the expense ratios of each investment options, the only other disclosure of fees was (paraphrased) that plan administration fees could be charged at the end of the year to account holders if the plan sponsor didn't cover all of them and that some of the fees may have been paid through revenue sharing agreements with one or more of the plan's investment options. Revenue sharing agreements would be reflected in the expense ratio for a fund, right? So perhaps the justification was that in the old plan the index funds had no revenue sharing agreements (and therefore lower expense ratios) and the new plan's index funds (which are different funds but the same benchmarks) have revenue sharing agreements, and thus higher expense ratios. Would that make sense?