How do 401(k) plans stack up by industry?
Judy Diamond Associates recently released an exhaustive review. The disparity in the quality of 401(k) plans in the 22 industries reviewed was stark.
Eric Ryles, JDA's managing director and author of the study, reviewed nearly 480,000 401(k) plans for plan year 2014, representing about 52 million participants with more than $4 trillion in invested assets. (JDA is a business unit of ALM Media, the parent company of BenefitsPro.)
Recommended For You
Analysis of each industry is broken down in eight plan-size segments, ranging from one to ten participants, to plans with more than 5,000 participants.
After assessing plan participation rates, average employer and employee annual contributions, average account balances and rates of investment return on assets, Ryles assessed a plan score to each group of plans, based on a 100-point evaluation.
For all industries, the data shows that the country's smallest plans are performing the best for participants. Plans with one to 10 participants scored an average of 62 on Ryles' scale, the highest for the eight plan-size groupings. Average employee and employer contributions were the highest for the segment, at $4,840 and $1,979, respectively.
In some respects, the data proves the obvious: Workers in higher-earning industries have wealthier retirement plans.
For instance, in the accommodation and food service industry, the average employer contribution for plans with one to 10 participants is $0.00; for physician groups in the same size segment, the average employer contribution is $3,769, the most generous among all industries and size segments.
The largest plans in the administration and waste management industry had the lowest plan score—33—while the largest plans in the legal industry had the highest score—74.
But other data shows some industries not necessarily associated with high earnings fare well. In the mining industry, plans with more than 5,000 participants average $3,453 in employer contributions. Employee contributions are strong throughout all size groups in mining, which the report notes is unusual for a non-service oriented industry.
Here are the five industries with the best-performing 401(k) plans, based on the average plan score for all size segments.
1. CPAs
About 7,000 CPA firms have an active 401(k) plan.
Participation rates are over 90 percent for all size segments but one. In the smallest group, participants contribute $7,112, on average. All plan sizes posted scores in the high 60s or better.
Clearly, CPA firms are populated by participants with high financial IQs, though the report does not make that correlation with plan performance. The average account balance for the smallest firm was more than $115,000.
2. Engineering
All size groups scored in the 60s in engineering. Account balances are well above the national medians.
The 17 firms with more than 5,000 participants had an average account balance with more than $91,000. Participation rates were high, averaging around 85 percent for all plan sizes.
3. Financial services and insurance
The nearly 30,000 firms in finance and insurance had the highest overall participation rates.
The average account balance of $80,414 in the large group segment is 20 times the yearly employee contribution average. By comparison, in the education industry, the average account balance for the largest firms is $22,443, or 10 times the employee contribution average.
4. Lawyers and legal services
Average account balances for lawyer are the highest in the country.
The 113 firms with 1,000 to 5,000 participants have more than $210,000 saved, on average. Even the smallest firms average more than $100,000 in savings.
The JDA study notes that law firms are among the few remaining industries that make regular use of defined benefit pension plans to supplement 401(k) savings, meaning the retirement outlook for many attorneys is even better than the study suggests.
5. Physicians
Most of the country's doctors work for small businesses. Of the 40,000 physician groups with 401(k) plans, nearly 30,000 have plans with fewer than 25 participants.
The average account balance of $117,823 in the 1-10 participant range is the highest among the smallest groups in all sectors, beating out CPAs by about $2,000. Employee and employer contributions in the smallest group segment average $5,543 and $3,769, respectively.
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.