Fee inefficiency and waste are hamstringing 401(k) participants’ retirement chances, a report says..

Americans give up at least $17 billion a year by choosing expensive investments within their workplace retirement plans, according to a recent report from New York-based RiXtrema, which provides portfolio crash-testing and other risk management tools to advisors.

Plan participants could save at least 25 basis points a year by switching to lower-cost investments that are quantitatively similar to those they already hold, according to Rixtrema.

With total defined contribution plan assets totaling $6.8 trillion as of March 2015, RiXtrema estimated the potential dollar amount of savings from moving to cheaper, similar fiunds at $17 billion.

RiXtrema determined investment similarity by combining category and asset class filters with historical and forward-looking correlation based on a multi-factor model. Replacing existing funds with cheaper “similar” funds would not materially change the risk/return profile offered to participants, according to the report. RiXtrema also required that the track record of “similar” funds would end up being better on a 10-year basis than the track record of incumbent funds.

The U.S. Department of Labor has estimated that plan inefficiency and waste costs participants 11.3 basis points. An independent study found that investment menu restriction in the average plan led to 78 basis points in additional cost relative to a low-cost index fund basket.

RiXtrema researched 52,529 plans, focusing on quantitative measures of plan success using its 401kFiduciaryOptimizer tool, and on qualitative measures of plan success by evaluating retirement plan menu choices.