In an annual ranking of America's top 401(k) plans, it appears that the key to success is offering low-cost options to plan participants and – what might be more difficult – contributing a healthy match to participants' deferrals.
The winners, by the way, might be a bit surprising, considering the industries they represent
BrightScope's annual ranking of the top 30 401(k) plans, as interpreted by Reuters, found that oil companies, pharmaceutical companies and several major airlines were doing the most impressive job of offering DC benefits to their employees.
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The financial information service picked the 429 largest of the 46,000 retirement plans it rates and then selected the top 30 of those, all of which hold more than $1 billion in plan assets.
Houston's Marathon Oil Company Thrift Plan emerged as the best of the best, with a retirement benefits package that sounds like every American worker's dream come true: a 100 percent match up to 7 percent, boosting the average participant contribution from $23,000 to $38,000.
The other top picks included Houston's Saudi Arabian Oil Company, the Dallas-based Southwest Airlines Pilots' Retirement Plan, Boston's Wellington Retirement and Pension Plan and Amgen Retirement Savings Plan in California.
The remaining Top 10 plans included retirement programs for United Airlines pilots, Credit Suisse, Sanofi-Aventis, Southern California Permanente Medical Group and Bristol-Myers Squibb.
Other well-known industry leaders to make the list included Google, Inc. (No. 11) and IBM (14), as well as major financial institutions.
Themes in plan design that emerged included immediate eligibility, immediate vesting of company match contributions and relatively low costs to participants. This year's averages suggested that costs came in at 0.29 percent, 1.5 basis points lower than 2010's study.
The majority of investments tracked in the top 401(k)s were index funds, up more than 4 percent in two years. Collective trusts and target-date funds were also more popular than in 2010.
"Less-obvious 401(k) plan components like immediate plan eligibility and vesting significantly increase participation rates and therefore employees' chances of a secure financial future," said BrightScope CEO Mike Alfred, in a statement.
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