Even though most people I know are too scared to even look at their 401(k) statements right now, have you ever thought about how well your company’s plan stacks up to other similar companies? The problem is that 401(k) plans lack transparency. What if every company had to publish their company match, fees, revenue sharing (*cough* kickbacks), investment choices, and vesting schedules? That would certainly produce competition and peer pressure to make better plans.
This is what the website Brightscope is trying to change. Just type in your company name and see an overall rating based on the components I listed above, also some other interesting details like average account balance. As they point out, a poorly designed plan could be costing you hundreds of thousands of dollars over time – or put another way the equivalent of an extra decade of work!
According to their site, BrightScope is the only 401k analytics firm that is truly independent and does not accept compensation in the form of revenue sharing from mutual fund companies or plan providers. This should make them objective. Found via Capital Ideas.
A related site is 401khelp.com, which covers less companies but does offer more insights and opinions on the plans it does cover. Not sure how often it is updated, though.
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How did you end up using Deloitte? I work for Deloitte and always wanted to know this type of info but could never find it easily.
Deloitte is big, but we might just have some friends in common. 😉
Jonanthan, I love your blog. Ever so often you list websites that people are seeking to find correct, comprehensive and useful information that will significantly affect their lives. Yesterday’s mortgage professor website and today brightscope website. This is phenomenal. Try googling “mortgage rates” and “401 k comparison” and neither website shows up at top. But both websites you listed are quintessential sources of information for very important things in life: mortgages and retirement savings. Thank you so much!
The website http://www.freeerisa.com (you must create an account, but it is free) also posts certain fees and commissions paid to 401(k) brokers and plan providers. It’s a bit tricky to pull this information out however. Look at the number under “aggregate administrative fees and other expenses”. It will not show expenses deducted from investment results or fees and expenses paid by your individual account; these are rolled into the NAV of the funds. The forms posted at freeerisa usually must be filed with the government within seven months after the end of the calendar year.
Jonathan – Thank you for the post today! We just launched BrightScope in January this year, so we are always happy when good people like yourself find the information useful. I’ll bookmark your site and come back in the future, it looks like you have a lot of great readers!
Cheers,
Ryan Alfred
BrightScope.com
All of the companies I entered weren’t listed or had no info…nice starting effort though. 🙂
Eric-
Sorry we didn’t have the plans you were looking for. Obviously we are trying to get a lot of this data, but as you are probably aware getting the data is difficult. But, thanks for the feedback and check back in the future to see if we have the plans rated!
Thanks,
Ryan
What about a comparable site for 403b’s? Anyone know of one??