Which companies have the reputation for good 401ks?

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Which companies have the reputation for good 401ks?

Post by bnttwnbnt » Mon Nov 17, 2008 11:02 am

Out of curiosity, does anyone have feedback or experiences with companies or industries with good or great 401ks? By good 401k I mean good fund selection and company match.

I've only heard of good benefits for government jobs.

I myself went from a big company to a small company and went from decent fund choices and a company match to a lackluster john hancock 401k with no match.

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Post by tadamsmar » Mon Nov 17, 2008 11:53 am

Low fees are another consideration.

The Federal TSP is good:

1. Fees: Lower fees than Vanguard

2. Match: 5% match of first 5%

3. Selection: Limited to the basic large cap and small cap domestic and one foreign index, plus bond index.

4. Other: Provides access the the unique G Fund which has high returns with no risk to principal.

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Post by dbr » Mon Nov 17, 2008 1:09 pm

This admittedly dated study may be helpful. It does not identify individual plans:


My wager, both logical and likely supportable in the data, is that very large companies provide competent and fair plans based on economy of scale, negotiating power, knowledge base in the coprporate management, and need to match competitive benchmark in hiring and retention. Small plans apparently are almost always terrible, and, unfortunately, many union and employee group plans, such as teachers (403b) are terrible.

My plan at Megacorp is a very good one with low plan costs, reasonable investment opportunities including directed brokerage, and low ER funds. Megacorp is a world recognized US corporation and a household name.

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Post by dm200 » Mon Nov 17, 2008 1:58 pm

The Boeing company had a low cost and good matching plan, at least a few years ago. Don't kmnow if things have changed.

I also heard good things about IBM, but don't know whether that is still true.

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Post by Go Blue 99 » Mon Nov 17, 2008 2:59 pm

I work at a unit of Verizon. The last two years, I have contributed 6% and have received a match of 8%. The match does vary based on company performance, but it is a minimum of 6%. I would consider that very generous.
The fund selection isn't stellar, but not bad either.

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Post by baldeagle » Mon Nov 17, 2008 4:15 pm

Yes, still true about IBM.

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Post by gatorking » Mon Nov 17, 2008 4:24 pm

http://www.fundadvice.com/401k-help/401 ... ction.html

Review of many 401k plans from Fundadvice.

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Post by modal » Mon Nov 17, 2008 4:28 pm

At my current employer, I've been under 4 - 401k plans each run by a different provider. The plan I currently have has the most options (over 10 funds), but only offers 1 index fund (SP500). The plan prior to this one had large, middle, and small cap index funds they were .2-.4 points higher compared to vanguard.

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Post by VGisforme » Mon Nov 17, 2008 11:25 pm

I don't know what industries are considered "good" for 401k benefits but I wouldn't have thought my current company would fall into that category but our plan is pretty good.

I guess what I'm saying is that until you read the fine print with your offer you should keep an open mind.

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Post by tadamsmar » Tue Nov 18, 2008 8:20 am

Thinking about this, it occurs to me that many companies may be paying more for less.

Could be that a company could have plan that is cheaper to the company and provides a bigger retirement benefit to workers, if they did this:

1. Provided low fee index funds.
2. Provided sufficient funds to allow the creation of efficient portfolios.
3. Provide lifecycle funds and employee education.
4. Assuming this all cost the company more than their current crappy plan, then cut the company match a bit so that the company ended up playing less overall.

The result could be less cost to the company and a bigger expected retirement benefit to the employee.

Of course the rub is that the benefit comes decades later and cutting the match looks like a short term loss for the employee.

Anyway, The idea is to rank 401K plans based on the expected retirement benefits. Roll up all the considerations (fees, match, fund selections) into one number.

And there would be one other number, the yearly cost per employee to the company.

Then you could combine the two to determine the plans with the highest projected return on investment.

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401k Programs

Post by giacolet » Tue Nov 18, 2008 9:51 am

Thank you gatorking for posting the link to the FundAdvice website.

My daughter-in-law works for Merck whose 401k is advised by Merriman Berkman and listed on the site.

They get top grades in my book for the advice and counseling that is available to plan participants. The link they have to the Perfect Portfolio is required reading for Bogleheads.

Merriman's investment philosophy is: we would recommend a portfilio comprised of low cost index funds. The equity component would be equally weighted between domestic and internationl stocks. The domestic and international stock allocations would each have an overweight in value and small cap stocks. There would be an allocation to both domstic and internationl REITs. The fixed income portion would be allocated among intermediate term, short term and inflation protected U.S. government securities.

They provide three suggested portfolios and a broad array of stock selections. Unfortunately, the lifecycle funds are the inept Fido compilations.

My son (her husband) works for a large Philadelphia law firm that has a prominent employee benefits practice which includes the federal regulatory agents as clients as well as Mutual Fund providers such as Fidelity and Vanguard.

The law firm plan offers Vanguard's signal shares and a broad range of other funds, not exclusively Vanguard.

I believe Merk and the lawfirm have a high percentage of "highly compensated" employees paid over $100,000.00 annually. They do not have employer matching. Employer matching actually is an incentive for non "highly compensated" individuals to participate in the program. Premier organizations have other supplementary programs to compensate their employees outside of the 401k.

In 2007 Merck gave the daughter-in-law stock options for writing articles and presenting papers which she sold for 35k. The law firm (which really has to be on top of what's progressive) gives each employee an annual 5.0% of salary bookeeping entry which is totaled and then dispersed to the employee in cash or as an annuity when he/she leaves the firm.
May your heart always be joyful. | May your song always be sung. | May you stay forever young. | ----Bob Dylan

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Post by SpaceMonkey » Wed Nov 19, 2008 11:38 am

To try to discourage turnover, many non-profits offer excellent employer matches or flat-out contributions after the employee has stayed for a certain period of time (in my case two years). This probably applies to larger, more established non-profits. 403(b)s offered through TIAA-CREF are the norm here.

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