While it is convenient, it is not beneficial to pay 401(k) plan fees from plan assets. When plan fees are deducted from plan assets, they are usually done on a pro rata basis – plan participants with the highest account balances pay the highest fees. This could greatly affect your overall investment return over a longer investment horizon when you factor in compounded growth. These fees could leave a six-figure dent in your retirement savings. This is especially true if your 401(k) provider charges a high fee.
The alternate and the more sensible option is to pay the fees directly from a corporate checking account. This also qualifies the plan fees to become a tax-deductible business expense for the employer.
Another added benefit of not having fees deducted from plan assets is that it could attract new employees. If you are in an industry with competitive salaries, offering a cost-free retirement plan to employees could attract quality talent.