Earlier this month, U.S. News & World Report posted an article titled “Companies With the Best Retirement Plans,” which featured brief overviews of the 401k plans at five companies, including some of the “usual suspects.”
We’re always interested in learning and sharing more about the attributes of great 401k plans, so we thought we’d take a closer look at the quintet of examples featured in the article. Here you go:
Amgen
Amgen is a Thousand Oaks, Calif-based biotech firm that strives for solutions that improve health outcomes and dramatically improve people’s lives. It brings brand-name drugs, including Otezla, Repatha and Enbrel, among others, to market, and is known for providing a generous 401k match for its roughly 17,000 plan participants.
U.S. News notes that Amgen employees participating in its 401k plan receive an employer contribution worth 5% of their eligible pay from the company, even if they don’t contribute anything themselves. Plus, employees who contribute to the plan receive a 100% match on the first 5% of their eligible salary that they save in the plan. An Amgen employee who saves 5% of his/her paychecks in the 401k plan could end up with 401k contributions worth as much as 15% of his/her salary.
Amgen’s own website adds that employees can contribute up to 30% of their eligible compensation each year, up to IRS limits, in one of three ways: traditional pre-tax, Roth after-tax, or after-tax (but not eligible for Amgen matching contributions).
Amgen’s 401k plan through Merrill Lynch, called the Amgen Retirement and Savings Plan, has an average account balance of $300,000 for its roughly 17,000 participants and net plan assets of $5.09 billion.
Employees are immediately 100% vested in the plan, and have more than two dozen investment options including low-cost index funds with which to build their 401k portfolios.
The plan has a BrightScope Rating of 90 (out of 100), placing it in the top 15% of all plans in its peer group. This plan is also in the top 15% of plans for Account Balances, Company Generosity, Participation Rate, Salary Deferral, and Total Plan Cost.
Boeing
Last year was a particularly tough one for Chicago-based Boeing thanks to the crash-spurred (and prolonged) grounding of the 737 MAX, which subsequently led to halting production on a key next-generation aircraft in the aviation giant’s portfolio.
But when it comes to their 401k, Boeing is still flying high with one of the largest plans in the country.
U.S. News says Boeing automatically contributes 3% to 5% of pay to a 401k account on behalf of 401k participants. The company also provides a 75% match on the first 8% of eligible pay an employee contributes. Many employees receive company contributions totaling up to 9% to 11% of their salary.
BrightScope gives the plan a rating of 87, placing it in the top 15% of all plans in its peer group. The plan is also in the top 15% of plans for Account Balances, Company Generosity, Participation Rate, Salary Deferral, and Total Plan Cost.
The Boeing Company Voluntary Investment Plan currently has over 205,400 active participants and over $58.6 billion in plan assets. BrightScope notes that Boeing takes advantage of auto enrollment, immediate vesting and a diversified investment menu of low-cost collective investment funds.
BOK Financial
Tulsa, Okla.-based BOK Financial has grown into a leading provider of sophisticated financial solutions to businesses, institutions and individuals across the country, and is a top 25 U.S.-based bank with $40 billion in assets.
Maybe it’s no surprise the company provides a highly ranked 401k plan, seeing as how it is one of the top-ranked providers of employer-sponsored retirement plans in the country. But the one it has for its own employees is undeniably generous.
U.S. News says BOK Financial’s 401k match is based on the number of years of service. The company will match up to 6% of an employee’s salary. For those who have worked less than four years, the company matches 50%, and from four to 10 years, the match is 100%. Employees who have worked 10 to 14 years receive a 150% match. Workers with 15 or more years of service receive a 200% match.
The plan has a BrightScope Rating of 78. This plan is in the top 15% of plans for Account Balances, Company Generosity, Participation Rate, and Total Plan Cost. BOK Financial 401k Plan currently has over 6,400 active participants and over $630.4 million in plan assets.
Farmers Insurance
“We are Farmers… and we have a good 401k plan.” No, they didn’t say that, but we’ll say it for them since the Woodland Hills, Calif.-based auto, home and small business insurer offers some strong 401k matching contributions.
Farmers Group Inc.’s 401k savings plan through Vanguard offers a 4% base match, meaning it contributes 4% of an employee’s eligible pay, regardless of whether the employee contributes, U.S. News notes. In addition, Farmers matches contributions dollar-for-dollar up to 6% of an employee’s eligible pay. In all, if an employee builds on the 4% base contribution and contributes 6% of his salary, the employee will save a total of 16% of eligible pay each year.
The plan has a BrightScope Rating of 82, putting it in the top 15% of plans for Account Balances, Salary Deferral, and Total Plan Cost. Farmers Group, Inc. 401k Savings Plan currently has over 24,600 active participants and over $3.1 billion in plan assets with an average account balance of $130,000.
The 401k savings plan offers a diverse selection of investment choices that are divided into three groups:
- All-In-One Target Retirement Trusts
- Do-it-yourself investments
- Open Choice—Vanguard Brokerage Option
Ultimate Software
Ultimate Software is a Weston, Fla.-based technology company that develops and sells UltiPro, a cloud-based human capital management software system for businesses.
U.S. News liked its 401k because employees can receive a 45% match on every dollar they contribute to the plan through Ultimate Software. The company doesn’t include any caps on the match. The only limit on the match is the IRS contribution limit, which is $19,500 in 2020, or $26,000 for those who qualify to make catch-up contributions at age 50 and older.
The plan earned a score of 81 from BrightScope, putting it in the top 15% of plans for Salary Deferral. Ultimate Software Group 401k Retirement Plan currently has about 4,800 active participants with an average account balance of $81,000 and over $348.9M in total plan assets.
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
