Ranking Reveals 30 Best 401(k) Plans
BOSTON (TheStreet) -- Despite the rough economic landscape of recent years, and the volatility, many of the nation's top companies remain committed, and competitive, with their 401(k) plan offerings.
BrightScope, a provider of independent retirement plan ratings and investment research, has crunched out its second annual Top 30 Ratings List covering 401(k) plans with more than $1 billion in assets.
The Southwest Airlines Pilots' Retirement Savings Plan was third on a list of the country's top 401(k) plans.
In formulating its list, BrightScope gets much of its data directly from plan sponsors and recordkeepers, as well as publicly available sources such as the Department of Labor and the Securities and Exchange Commission.
The company analyzes more than 200 individual data points and applies a rating algorithm that calculates a numerical score for every 401(k) plan in the country. Weighted factors include total plan cost, company generosity, salary deferrals, account balances and investment menu quality.
The Savings Plan of Saudi Arabian Oil, with a U.S. headquarters in Houston, was the top-rated plan for the second year in a row. The plan has more than 3,000 active participants and more than $1.3 billion in plan assets. Its metrics measured up favorably not only among companies in its sector, but overall: It boasts a 99.9% participation rate and average account balances of $456,887.
The Southern California Permanente Medical Group Retirement Plan, which has 4,500 active participants and more than $1.6 billion in plan assets, was second on the list (sporting an average $375,102 account balance). The Southwest Airlines(LUV_) Pilots' Retirement Savings Plan, with 6,200 active participants and more than $1.6 billion in plan assets, was third on the list. It has an average account balance of $256,422.
Among the other companies with plans ranking in the top 30 were Amgen(AMGN_) (#4), United Airlines(UAL_) (#5); BP(BP_) (#8), IBM(IBM_) (#12), ExxonMobil(XOM_) (#13), Sun Microsystems(JAVA_) (#25), Cisco Systems(CSCO_) (#27), Goldman Sachs(GS_) (#28), AstraZeneca(AZN_) (#29) and Pfizer(PFE_) (#30).
This year's list has the expected mix of oil, pharmaceutical, technology and financial services companies, BrightScope CEO Mike Alfred says.
"Those industries dominate the list," he says. "That speaks a lot to the profitability of those companies, as well as how highly paid people who work in those industries are."
He says it may be surprising to see BP on the list, given fears that the Gulf of Mexico oil spill would have a disastrous impact on employees who have company stock in their plan.
"A lot of people might have expected that the BP plan would have been hit a little harder, but it has actually done a good job since 2005 of getting employees not to invest as much in the company stock. They also continue to put in a whole lot of money on behalf of the employees, which is the biggest driver. It is not necessarily how much money you made on your investments, but how much money continues to go into the plan. That also drives outcomes much more than the actual investment selection."
By the time next year's ranking is compiled, Alfred expects to see Google(GOOG_) make the list, as it's likely to pass the $1 billion-in-assets mark.
"Obviously, the companies that have the opportunity to break a billion the fastest are the ones that are going to grow their employee base the fastest," he says. "Right now there are very few industries that are acting like technology. Look at Groupon -- it might have been the fastest zero-to-$6 billion market cap story in history. Companies that can quickly get there are ones like Google, Facebook,Twitter, Zynga and Groupon. They are growing extremely rapidly in terms of their employee base and have highly paid employees who can afford to contribute to the plan."
Alfred says the hot and heavy competition for engineers among these companies will make salary and benefits even more important.
"Employee retention is huge if you are in a globally competitive environment," he says.
The following is a ranking of the top 30 401(k) plans as determined by BrightScope.
1. The Savings Plan of Saudi Arabian Oil Company, Houston, TX
2. Southern California Permanente Medical Group Retirement Plan, San Diego, CA
3. Southwest Airlines Pilots' Retirement Savings Plan, Dallas, TX
4. Amgen Retirement and Savings Plan, Thousand Oaks, CA
5. United Airlines Pilots' Directed Account Plan, Chicago, IL
6. Employees Savings and Retirement Plan of Credit Suisse, New York, NY
7. Bayer Corporation Savings and Retirement Plan, Pittsburg, PA
8. BP Employee Savings Plan, Houston, TX
9. Nucor Corporation Profit Sharing and Retirement Savings Plan, Charlotte, NC
10. Avaya, Inc. Savings Plan for Salaried Employees, Basking Ridge, NJ
11. UBS Savings and Investment Plan, New York, NY
12. IBM 401k Plus Plan, Armonk, NY
13. ExxonMobil Savings Plan, Irving, TX
14. Sanofi-Aventis US Savings Plan, Bridgewater, NJ
15. Anadarko Employee Savings Plan, The Woodlands, TX
16. Novartis Pharmaceuticals Corporation Investment Savings Plan, East Hanover, NJ
17. Bechtel Trust & Thrift Plan, San Francisco, CA
18. Chevron Employee Savings Investment Plan , San Ramon, CA
19. Genentech, Inc. Tax Reduction Investment Plan, South San Francisco, CA
20. Altria Deferred Profit-Sharing Plan for Salaried Employees, Richmond, VA
21. ConocoPhillips Savings Plan, Houston, TX
22. American Airlines, Inc. Pilot Retirement Benefit Program Variable Income Plan, Fort Worth, TX
23. Federal Express Corporation Pilots' Retirement Savings Plan, Memphis, TN
24. Shell Provident Fund, Houston, TX
25. Sun Microsystems, Inc. Tax Deferred Retirement Savings Plan, Santa Clara, CA
26. GlaxoSmithKline Retirement Savings Plan, Philadelphia, PA
27. Cisco Systems, Inc. 401k Plan, San Jose, CA
28. Goldman Sachs 401k Plan, New York, NY
29. AstraZeneca Savings and Security Plan, Wilmington, DE
30. Pfizer Savings Plan, New York, NY
BOSTON (TheStreet) -- Despite the rough economic landscape of recent years, and the volatility, many of the nation's top companies remain committed, and competitive, with their 401(k) plan offerings.
BrightScope, a provider of independent retirement plan ratings and investment research, has crunched out its second annual Top 30 Ratings List covering 401(k) plans with more than $1 billion in assets.
The Southwest Airlines Pilots' Retirement Savings Plan was third on a list of the country's top 401(k) plans.
In formulating its list, BrightScope gets much of its data directly from plan sponsors and recordkeepers, as well as publicly available sources such as the Department of Labor and the Securities and Exchange Commission.
The company analyzes more than 200 individual data points and applies a rating algorithm that calculates a numerical score for every 401(k) plan in the country. Weighted factors include total plan cost, company generosity, salary deferrals, account balances and investment menu quality.
The Savings Plan of Saudi Arabian Oil, with a U.S. headquarters in Houston, was the top-rated plan for the second year in a row. The plan has more than 3,000 active participants and more than $1.3 billion in plan assets. Its metrics measured up favorably not only among companies in its sector, but overall: It boasts a 99.9% participation rate and average account balances of $456,887.
The Southern California Permanente Medical Group Retirement Plan, which has 4,500 active participants and more than $1.6 billion in plan assets, was second on the list (sporting an average $375,102 account balance). The Southwest Airlines(LUV_) Pilots' Retirement Savings Plan, with 6,200 active participants and more than $1.6 billion in plan assets, was third on the list. It has an average account balance of $256,422.
Among the other companies with plans ranking in the top 30 were Amgen(AMGN_) (#4), United Airlines(UAL_) (#5); BP(BP_) (#8), IBM(IBM_) (#12), ExxonMobil(XOM_) (#13), Sun Microsystems(JAVA_) (#25), Cisco Systems(CSCO_) (#27), Goldman Sachs(GS_) (#28), AstraZeneca(AZN_) (#29) and Pfizer(PFE_) (#30).
This year's list has the expected mix of oil, pharmaceutical, technology and financial services companies, BrightScope CEO Mike Alfred says.
"Those industries dominate the list," he says. "That speaks a lot to the profitability of those companies, as well as how highly paid people who work in those industries are."
He says it may be surprising to see BP on the list, given fears that the Gulf of Mexico oil spill would have a disastrous impact on employees who have company stock in their plan.
"A lot of people might have expected that the BP plan would have been hit a little harder, but it has actually done a good job since 2005 of getting employees not to invest as much in the company stock. They also continue to put in a whole lot of money on behalf of the employees, which is the biggest driver. It is not necessarily how much money you made on your investments, but how much money continues to go into the plan. That also drives outcomes much more than the actual investment selection."
By the time next year's ranking is compiled, Alfred expects to see Google(GOOG_) make the list, as it's likely to pass the $1 billion-in-assets mark.
"Obviously, the companies that have the opportunity to break a billion the fastest are the ones that are going to grow their employee base the fastest," he says. "Right now there are very few industries that are acting like technology. Look at Groupon -- it might have been the fastest zero-to-$6 billion market cap story in history. Companies that can quickly get there are ones like Google, Facebook,Twitter, Zynga and Groupon. They are growing extremely rapidly in terms of their employee base and have highly paid employees who can afford to contribute to the plan."
Alfred says the hot and heavy competition for engineers among these companies will make salary and benefits even more important.
"Employee retention is huge if you are in a globally competitive environment," he says.
The following is a ranking of the top 30 401(k) plans as determined by BrightScope.
1. The Savings Plan of Saudi Arabian Oil Company, Houston, TX
2. Southern California Permanente Medical Group Retirement Plan, San Diego, CA
3. Southwest Airlines Pilots' Retirement Savings Plan, Dallas, TX
4. Amgen Retirement and Savings Plan, Thousand Oaks, CA
5. United Airlines Pilots' Directed Account Plan, Chicago, IL
6. Employees Savings and Retirement Plan of Credit Suisse, New York, NY
7. Bayer Corporation Savings and Retirement Plan, Pittsburg, PA
8. BP Employee Savings Plan, Houston, TX
9. Nucor Corporation Profit Sharing and Retirement Savings Plan, Charlotte, NC
10. Avaya, Inc. Savings Plan for Salaried Employees, Basking Ridge, NJ
11. UBS Savings and Investment Plan, New York, NY
12. IBM 401k Plus Plan, Armonk, NY
13. ExxonMobil Savings Plan, Irving, TX
14. Sanofi-Aventis US Savings Plan, Bridgewater, NJ
15. Anadarko Employee Savings Plan, The Woodlands, TX
16. Novartis Pharmaceuticals Corporation Investment Savings Plan, East Hanover, NJ
17. Bechtel Trust & Thrift Plan, San Francisco, CA
18. Chevron Employee Savings Investment Plan , San Ramon, CA
19. Genentech, Inc. Tax Reduction Investment Plan, South San Francisco, CA
20. Altria Deferred Profit-Sharing Plan for Salaried Employees, Richmond, VA
21. ConocoPhillips Savings Plan, Houston, TX
22. American Airlines, Inc. Pilot Retirement Benefit Program Variable Income Plan, Fort Worth, TX
23. Federal Express Corporation Pilots' Retirement Savings Plan, Memphis, TN
24. Shell Provident Fund, Houston, TX
25. Sun Microsystems, Inc. Tax Deferred Retirement Savings Plan, Santa Clara, CA
26. GlaxoSmithKline Retirement Savings Plan, Philadelphia, PA
27. Cisco Systems, Inc. 401k Plan, San Jose, CA
28. Goldman Sachs 401k Plan, New York, NY
29. AstraZeneca Savings and Security Plan, Wilmington, DE
30. Pfizer Savings Plan, New York, NY
