[SilasX]

They're competing with other 401k plans that do the same, but charge a much bigger percentage, and mutual/index funds do, in general, charge a percentage of the funds under management. Don't look a gift horse in the mouth.

However, you're right that costs are less-than-proportional to funds under management, so they usually offer to lower the percentage as you invest more, cf. Vanguard admiral-class shares: https://investor.vanguard.com/mutual-funds/admiral-shares

[sguha]

Our company used Ubiquity https://www.myubiquity.com/retirement/plans/expressk/ which doesn't have asset based fees