I’ve always been a fan of nudging employers to do the right thing on 401(k)s, 403(b)s and 457 plans. Although they don’t have to offer them, if they do, they can easily improve them.
What can employers do? They can help you save more or reduce internal costs so that middlemen don’t eat away at your nest egg. They can offer lower-cost mutual funds.
The best 401(k)s, according to a recent survey by Employee Benefit News and miEdge, offer a number of features to help their employees. They make it easy to invest and even easier to stay in their plans.
“The country’s largest retirement plans have a lot of things in common,” the survey summarized. “A high percentage of employees participating. A robust match. A well-integrated financial wellness program.”
Here are the five best plans in the survey and a key feature that contributed to their high ranking:
- The Boeing Company. The $50 billion plan “provides a 75% match on the first 8% of base pay that most nonunion employees save in their VIP accounts, in addition to age-based company contributions, according to the company’s website. Additionally, new hires are automatically enrolled at 4% of base pay. If they do not opt out or change the contribution rate, it automatically increases by 1% each April until reaching 8% of base pay and receiving the full Boeing match.”
- IBM. The $48 billion plan “lets plan participants defer up to 80% of eligible compensation on a before-tax or Roth 401(k) basis, according to the company’s website. Employees can also save up to 10% of eligible pay on an after-tax basis. For regular full-time and part-time employees hired or rehired after Jan. 1, 2005, the company offers a 1% automatic company contribution and a dollar-for-dollar company match on up to 5% of eligible pay.”
- Wells Fargo. The $38 billion plan “makes quarterly employer-matching contributions dollar for dollar up to 6% of eligible compensation after completing one year of employment. The company funded around $1 billion in employer matching contributions in 2017.”
- AT&T. The $38 billion plan provides an “employer match for most employees is equal to 80% of the first 6% of salary contributed by the employee. Employees that are not accruing a pension with AT&T generally receive a higher match of 100% of the first 6% they contribute.”
- Lockheed Martin. The $30 billion plan “has an 86 out of 100 rating on BrightScope. It has an above-average participation rate, and company generosity, salary deferrals and account balances are all rated as great.”
Now that you have this information in hand, what do you do with it? Organize a group of employees and approach your 401(k) plan administrator.
Make a professional presentation on what can be done to improve your plan. It’s win-win for all involved since managers are in the plan, too.
John Wasik speaks and writes about innovation, investor protection, money management, economics, college financing, retirement and social issues. His latest book is “Lightning Strikes: Timeless Lessons in Creativity from the Life and Work of Nikola Tesla,” a revealing look at the disruptive innovations of one of the world’s most ingenious inventors. He’s also co-written “Waging War on Wall Street,” a guide to investor protection.
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