401(k) plans turn on costs, employer

The Southwest Airlines Pilots’ Retirement Savings Plan was ranked number 3 by BrightScope, which rates 46,000-plus retirement plans.
Charles Rex Arbogast/Associated Press/File 2012
The Southwest Airlines Pilots’ Retirement Savings Plan was ranked number 3 by BrightScope, which rates 46,000-plus retirement plans.

Much of what makes a great retirement plan depends upon the cost to participants and the generosity of the company to its workers.

These are among the criteria that BrightScope uses to rank 401(k) plans at big companies with more than $1 billion in plan assets in creating its top-30 list.

The financial information service also look at participation rates, the level of salary deferrals, and average account balances to come up with its list of the best among the 429 largest 401(k) plans.


“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,” says Mike Alfred, the chief executive and cofounder of BrightScope, which rates more than 46,000 retirement plans.

Get Talking Points in your inbox:
An afternoon recap of the day’s most important business news, delivered weekdays.
Thank you for signing up! Sign up for more newsletters here

Some features were common: Costs averaged 0.29 percent, a drop of 1.5 basis points since 2010. Twenty-four of the top 30 had immediate eligibility. And 21 of the plans offered immediate vesting of company matching contributions.

For investing options, more participants are picking index funds, now accounting for 29.5 percent of assets, in contrast to 25.4 percent in 2010.

Collective trusts, which pool assets, are also popular, at 28.7 percent of assets, in contrast to 24 percent in 2010.

Also growing: target date funds, up to 4.9 percent from 3.6 percent in 2012.


The top company was a newcomer to the list, Marathon Oil Company Thrift Plan, of Houston. The company matches 100 percent of the first 7 percent contributed to the plan, with an average contribution level of more than $23,000 per participant.

BrightScope notes, “This generosity, in turn, helped push the average salary deferral for the plan to over $38,000 per participant.”

Among notable major companies, Google Inc., came in at 11 and IBM at 14.

The financial services industry was also well-represented, with Credit Suisse (7), The Roche (18), Ernst & Young (19), UBS (24), Goldman Sachs (27), and Deloitte (30) on the list.

The top 10 plans are:


1. Marathon Oil Company Thrift Plan, Houston

2. Savings Plan of Saudi Arabian Oil Co., Houston

3. Southwest Airlines Pilots’ Retirement Savings Plan, Dallas

4. Wellington Retirement and Pension Plan, Boston

5. Amgen Retirement and Savings Plan, Thousand Oaks, Calif.

6. United Airlines Pilot Directed Account Plan, Chicago

7. Employees Savings and Retirement Plan of Credit Suisse, New York

8. Sanofi-Aventis US Savings Plan, Bridgewater, N.J.

9. Southern California Permanente Medical Group Retirement Plan, Pasadena, Calif.

10. Bristol-Myers Squibb Company Savings and Investment Program, New York

For the full list, see