The Best 401(k) Plans in America Share This in Common

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Andrey_Popov /

Pilots for major airlines are presumably flying high when it comes to saving for retirement.

The financial data company BrightScope recently rated four 401(k) plans for commercial airline pilots as the best in the U.S.

For nine years now, the financial data company has been ranking the top plans in the nation. BrightScope uses data from primary sources such as plan sponsors, as well as federal agencies like the Department of Labor and the Securities and Exchange Commission.

The rankings are based on the BrightScope rating, a single number that reflects some 200 pieces of such data. The company continues:

“The algorithm runs thousands of simulations for each plan to determine how quickly the average 401k participant will get to retirement via their employer’s plan.”

The best 401(k) plans tend to have the following characteristics in common, BrightScope says:

  • Generous company contributions: These include employer matches and profit sharing. Taking full advantage of matches is one of the best ways to build your nest egg, as we detail in “7 Tips for Stress-Free Retirement Plan Investing.”
  • Immediate plan eligibility: BrightScope describes a plan’s eligibility period as the length of time between when employees are hired and when they become eligible to participate in the plan. A shorter eligibility period is better because it allows employees to save more.
  • Immediate vesting: This means an employee gets to keep all the money that a company contributes to his or her plan even if the employee leaves the company.
  • Low fees: We’ve dubbed 401(k) fees “the worst by far.” But the average total plan cost among the 30 highest-ranked plans is 0.22 percent, according to BrightScope’s calculations, which reflect expense ratios as well as administrative costs.
  • High participation rates: BrightScope reports seeing participation rates top 97 percent.
  • Salary deferral: The average employee deferral among the 30 highest-ranked plans is more than $14,100.

The 10 highest-ranked 401(k) plans this year, and their BrightScope ratings, are:

  1. Delta Pilots Savings Plan — with a BrightScope rating of 92.77
  2. American Airlines Inc. 401(k) Plan For Pilots — 92.57
  3. United Airlines Pilot Retirement Account Savings — 92.55
  4. Southwest Airlines Pilots’ Retirement Savings Plan — 91.75
  5. NFL Player Second Career Savings Plan — 91.67
  6. The Savings Plan of Saudi Arabian Oil Company (Saudi Aramco) — 91.34
  7. Novartis Corporation Investment Savings Plan — 90.11
  8. UPS/IPA Defined Contribution Money Purchase Pension Plan — 89.8
  9. Chevron Employee Savings Investment Plan — 89.64
  10. Amgen Retirement and Savings Plan — 89.64

To see all of the top 30 plans, visit BrightScope’s blog. You can also search the company’s retirement plan ratings directory to see if it has rated your own plan.

To learn more about some of the most common types of retirement plans, check out “Confused by Retirement Accounts? Roth, Regular IRAs and 401(k)s Made Simple.”

What’s your take on 401(k) plans? Sound off below or on our Facebook page.

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