CPAs, doctors, lawyers, dentists and bankers tend to have the best 401(k) plans according to a new defined contribution plan benchmark report released today. Educational services, social assistance, and food services are among the worst-performing sectors.
The eighth annual 401(k) Plan Benchmark Report from Judy Diamond Associates provides an in-depth look at 27 different industrial groupings across eight company sizes. Over 600,000 active 401(k) plans with $6.4 trillion in assets covering 68 million workers were analyzed to create this unique and comprehensive look at America’s primary retirement vehicle.
Advisors can use it to have a meaningful discussions with plan sponsors about how their plans are doing, calling out areas where the plan underperforms its peers, and speaking to how you can address those issues.
“Establishing quantitative, data-driven benchmarks is so important for our industry,” said study author Eric Ryles, Vice President of Customer Solutions at Judy Diamond Associates. “Only by knowing what the average plan looks like can employers and their 401(k) advisors make successful plans to increase retirement readiness for all participants. You can’t chart a course to the future without a good understanding of where you’re starting from.”
Year over year, the report found total 401(k) assets decreased by $1.6 trillion dollars to $6.4 trillion, driven by low stock market returns during the 2022 plan year. The average account balance fell from $128,000 to $101,000, due largely to an 18% decline in the S&P.
“While Americans are generally confident they’ll have enough money to live comfortably in retirement, the reality is that personal saving rates are declining, making it even more critical for individuals to have access to a retirement plan,” said Brian Severin, Senior Executive Vice President and CMO at Mutual of America Financial Group. “Mutual of America is dedicated to advancing retirement education and promoting the importance of building and preserving assets for a financially secure future. This report, with its focus on key participation trends and benchmarks for retirement plans across various industries, offers key insights for businesses seeking to provide an effective plan that helps their employees save and build an even stronger foundation for a better retirement outcome.”
The complete 401(k) Plan Benchmark Report, sponsored by Mutual of America Financial Group, can be downloaded at www.judydiamond.com/.
SEE ALSO:
• Benchmark Survey on Recordkeeping Fees for Large DC Plans Debuts
• 401(k) Balances Rise 14% in 2023, but Participation Rate Falls
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.