Financial firms and law firms play a prominent role in offering the best New York City 401(k) plans, according to BrightScope Inc., a San Diego-based firm that rates DC plans using six broad categories ranging from fees to quality of investment choices.
BrightScope analyzes more than 45,000 plans nationwide using Form 5500 data and other data from sources such as the Census Bureau and the Securities and Exchange Commission, as well as from mutual funds' prospectuses and statements of additional information.
Although BrightScope's analysis includes six categories, the keys to achieving a high score are salary deferrals and corporate matches, said Mike Alfred, a co-founder and chief executive. “Getting more dollars into the plan with a high deferral rate can offset (the impact of) high fees or a poor investment menu,” he said.
The rating includes the size of account balances, participation rates and “company generosity.” The latter is a catch-all term that covers such factors as a plan's vesting schedule and eligibility period. The rating system assigns a number for each plan based on 200-plus data points in the six broad categories, Mr. Alfred said.