When the stock market plunged roughly 40 percent last year, retirement plan assets also took a dive. In 2008, assets held within retirement plans lost 22 percent of their value, falling to $14 trillion, according a recent report on from the Investment Company Institute (ICI), an industry trade group in Washington, D.C. At the same time, defined contribution plan assets lost 22 percent of their worth, while individual retirement account assets declined by 24 percent, the ICI said.

Compounding the blow to retirement savings, the decline in plan assets is spurring higher management fees and greater expenses at some mutual fund companies and 401(k) providers. And although such changes will likely affect employer-sponsored plans across the board, small plans, which often have fewer employees and fewer assets, may get hit the hardest.

"If a plan that was worth $1 million dropped to $600,000, you aren't going to be able to negotiate as good a deal," says Bert P. Kingsley, a Hartford, Conn.,-based principal at Mercer, a health and benefits consultancy. Conversely, "larger employers have generally negotiated much lower set costs and record fees," Kingsley says.

Broadly, small companies have always had less negotiation clout than big businesses. And though today's situation appears bleak, knowing what's on the horizon can help business owners adjust or reconsider their retirement offerings to cut costs.

Here's a look at several common changes to retirement plans and how they might affect small businesses:

Mutual f und fees and expenses
In the last year, fees in most mutual fund categories rose, according to research that Morningstar prepared for CBS MoneyWatch.com. For example, the average fee for an international equity fund rose to 1.56 percent from 1.48 percent, while stock fund fees jumped roughly five percent on average.

The reason for the hike? "A number of funds have taken substantial hits to their asset levels," says Andy Gogerty, a senior fund analyst at Morningstar. And since mutual fund companies generate revenue by charging fees on assets under management, as their assets have dwindled, so too have their profits. To make up for lost revenues, some fund companies are boosting their fees. (Here's our story on rising mutual fund fees.)

These fee hikes typically won't affect larger employers because they often pay a lower, institutional price on their underlying investments. But for smaller firms that buy retail might be hit, Kingsley says. "You have to go back and renegotiate your contract to get that waived," he says. "But if the profitability isn't there, they'll invoke those charges on smaller plans."

Another downside to managing fewer assets: static expenses, such as marketing, investment advisory fees and distribution expenses cover less ground, Gogerty says. As a result, the remaining investors must carry more of the burden, he says.

401(k) plan management fees
401(k) plan providers also base their fees on a percentage of plan assets under management, and like mutual-fund companies, some are boosting their management fees to make up for lost profits, says David Wray, president of the Profit Sharing/401(k) Council of America, an industry trade association in Chicago. Here's an example: A one percent management fee on a plan that held assets worth $1 million used to earn providers about $10,000 a year. But after a 40 percent market tumble, returns from that plan may drop to $6,000.

"The point is to generate the same amount of revenue today with lower assets as you generated in the past with higher assets," says Wray. "The cost of the plan has not increased, but the fee structure has been changed so that the provider makes the same amount of revenue," he says.

Still, some of the insurance companies that handle 401(k)s will usually waive their fees for plans worth more than $1 million, says Brett Goldstein, the president of the Pension Department, a benefits consultancy in Plainview, NY. However, "very small businesses and companies that have seen their plans' assets shrink below that $1 million marker may get stuck with higher fees," he says.

Similarly, administrative fees such as so-called asset wrap charges, or minimum surcharges, may kick in once plan assets fall below a certain level, says Kingsley. For example, say an asset wrap charge kicks in on 401(k) plans that fall to $800,000 in assets. It wouldn't be a stretch for plans that were worth $1 million a year ago to fall well below that $800,000 mark today, he says.

Although investment management fees are generally assessed as a percentage of assets invested, administrative service fees may be handed down to employers without regard for the investment, says Kingsley. In other words, if an asset-wrap charge kicks in, the employer--not the plan's participants--may have to cover the bill.