While researching companies for possible career moves — an occasional hobby of mine before all of my extracurricular time was spent working on Consumerism Commentary — it has been difficult to find reliable information about one of the biggest benefits companies can offer, the 401(k) retirement plan. As an outsider to the company, you cannot access juicy benefits information. You can find out whether a company offers a 401(k), but some plans are decidedly worse than others.
The information I’d like to see available includes a list of available investment options. If my 401(k) contributions are locked into only expensive managed mutual funds, I would prefer to know this before applying for a position. No company match? That’s a deal-breaker. If the company requires an excessive portion of the contributions to be invested in company stock without a reasonable choice to sell, I would have doubts about the company’s future.
The 401(k) may not be the biggest driver in the decision to apply for or accept a position at a company, but this is an example where more information results in more informed applicants and a better chance of finding a mutually-beneficial employment match.
BrightScope is one website that approaches the kind of functionality I am searching for. It allows each visitor to provide limited information about his or her company’s 401(k) plan in order to develop a variety of ratings. Thanks to other employees who have uploaded plan information, BrightScope was able to evaluate my employer. The company I work for scores a 72 overall out of 100, better than average for my industry and only a few points away from the highest score.
In addition to the overall rating, BrightScope evaluates plan cost (like expense ratios and fees), company generosity (quality of the employer match), and investment menu quality.
How does your company’s 401(k) plan stack up against the competition?
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{ 4 comments… read them below or add one }
mine’s on there…crappy fund selection…high fees.
There is some legislation in-play “to provide special reporting and disclosure rules for individual accounts plans and for other purposes” which I believe translates into requiring an employee to be able to understand the costs of their own 401(k).
This bill died in 2007 but has been revived:
http://www.govtrack.us/congress/bill.xpd?bill=s111-401
Anyhow, the bill wouldn’t necessarily provide *prospective* employees access to the data, but it would be helpful to actual employees (and improve the data they shared if the choose to do so).
I’ve been writing to the senators involved requesting the an amendment along the lines of the following:
“Permit employees to “rollout” tax-free any or all 401(k) funds once per year during a “rollout period” to any retirement account into which they would be permitted a tax-free rollover at the end of an employment relationship. This would immediately free employees from fee-laden plans and in more control of their retirement while encouraging such plans through free market forces to be more competitive.”
My company is not in there. However I wonder how these numbers are calculated. They don’t seem to give good details on their rating system.
If they do it like most of these places do they are trying to weight 27 different things which gives a very inaccurate picture.
Only a few things matter.
#1 is percent of company match.
#2 is fees of funds
#3 is fund choice diversity.
#4 is do they require you to purchase company stock.
Thats it. Anything else is really quite meaningless. But I bet a company that is super on those 4 categories could get dinged on other meaningless categories and score similiarly to someone who doesn’t do as well on these categories yet does great on something else such as percent participation or participation at different income levels, neither of which make one bit of difference to how my money performs.
Thus I take these kinds of ratings to be interesting from a ball parking standpoint but not usually very good when you get to the details.
I work for the United States government – which is the largest employer in the United States. However, I could not find the them – did I just miss it?