The company with the best retirement plan in New York is Deloitte, according to investment analytics firm BrightScope’s ranking of the top 25 New York City area 401(k) plans.
Deloitte’s Profit Sharing plan earned a score of 90 points on a scale of 1 to 100, according to the ranking. Novartis Pharmaceuticals’ plan garnered 88 points. The next three companies all earned 87 points: biopharmaceuticals firm Bristol-Myers Squibb, financial services firm TD Securities USA, and chemical company BASF.
The rankings looked at New York City area companies that have 401(k) plans with more than $100 million in assets.
In the rankings, BrightScope analyzes more than 200 elements of a pension plan, including company contributions and fees and vesting schedules, and then calculates a rating score via a proprietary algorithm.
Mike Alfred, co-founder and chief executive officer of BrightScope, told SourceMedia that this is the second year his company has done geographic ratings. BrightScope also does rankings of the top 30 plans in the country with over $1 billion in assets. Area ratings lists are developed for such regions as San Francisco, Dallas-Forth Worth and Phoenix.
Alfred said that the success of these 25 plans was due to a number of factors such as company profitability. For example, at a profitable financial services company with highly paid employees, it’s important that the company can drop in more money because employees have high expectations. More money leads to more employees caring about the plan, and this leads to better results.
The rankings have alerted BrightScope to a number of trends, according to Alfred. First, they’ve noticed that over the past few years, the scores for plans that they track have gone up. This is partly because the markets have improved. A lot of companies cut their matches during the recession, but for the most part have brought them back since then.
The transparency provided by the BrightScope ratings was also a factor behind the improvement of these plans, says Alfred. He said that a number of companies on this year’s list have used BrightScope’s data in some way to better their plans. Companies have also publicized this data internally to demonstrate the success of their plans to employees in order to bolster employee retention and morale.
“When we launched the company in 2009, the goal was to see if anyone would care,” Alfred told SourceMedia. “The vast majority of companies are aware of the data and use them in some way, even in discussions at their investment committees.”