Washington, D.C., August 5, 2014 – Judy Diamond Associates, the 401k plan intelligence provider of leading financial advisors, brokers and fund companies, today released an analysis of 401(k) plans by size, revealing that the smallest plans outperform the largest plans.
Very small 401(k) plans, with 10 or fewer participants, had an average plan score of 63.8 out of 100, based on the most recent form 5500 plan disclosure documents released by the Department of Labor. In contrast, those 401(k) plans with 100 or more participants averaged plan scores of 52.3 over the same period.
Plan Scores are calculated using an algorithm that considers key measures of a plan’s performance compared to other plans nationwide. Higher plan scores can result from comparatively higher participation rates, increases in contributions, higher rates of return, or an absence of certain signs of distress.
Only 1.4% of all 401(k) plan participants are covered by the smallest plans whereas nearly three-quarter, 73.4%, are in the largest plans. This divergence means that only a small percentage of workers have access to the strongest plans.
“This research underscores the needs for advisors who work with the largest 401(k) plans to continue to look for ways to improve their performance,” said Eric Ryles, managing director of Judy Diamond Associates. “By increasing automatic enrollment, restructuring their company match, and increasing participant education, a small portion of large plan sponsors can have a huge impact on the way we save for retirement.”
Some interesting highlights from the research include:
- For both the largest and smallest plans, two of the top three industries represented were health care and finance.
- While giant plans cover 73.4% of all participants, they represent only 2.9% of all plans.
- Micro plans on the other hand cover only 1.4% of participants but include 37.0% of all plans.
Key Findings:
| Size | Total Participants, per Plan | Average Plan Score | Total Participants, All plans | Total Plans |
| Giant | 500+ | 52.3 | 56,729,356 | 15,177 |
| Large | 101-500 | 52.3 | 10,255,922 | 50,047 |
| Medium | 51-100 | 53.3 | 4,138,646 | 58,309 |
| Small | 11-50 | 57.1 | 5,118,376 | 210,710 |
| Micro | 1-10 | 63.8 | 1,046,252 | 195,989 |
Judy Diamond Associates based this research on the most recently available 401(k) plan disclosure documents released by the Department of Labor, which are available in its Retirement Plan Prospector database. Retirement Plan Prospector is an intuitive and comprehensive online sales prospecting and plan analysis tool, providing insights to the defined contribution and defined benefits markets.
For more information about this research, please contact us at www.judydiamond.com/about/contact or follow us on Twitter @401kFacts.
Media Contact
Regina Marie Glick
646-746-8878
[email protected]
Sales Contact
Eric Ryles
202-370-4811
[email protected]
