Analysis reveals states with best 401(k) plans
March 5, 2014 by IFAwebnews Staff
Research firm finds ‘strong’ plans nationwide, most along East Coast
Judy Diamond Associates, a 401(k) plan intelligence provider for financial advisors, brokers and fund companies, released an analysis of the best states in which to have a 401(k) plan, revealing that Connecticut has the highest concentration of strong plans.
In the Mid-Atlantic region, Delaware, Virginia, Maryland and New York ranked among the top nationwide.
Those states with the highest concentration of top plans have higher participation rates and more employer generosity than their peers,” said Eric Ryles, managing director of Judy Diamond Associates. “Regional differences in plan strength will contribute to regional differences in participant outcomes.”
Top 10 states with highest concentration of good plans, according to Judy Diamond Associates.
Rankings were based on the percent of 401(k) plans receiving top Plan Scores for all 401(k) plans in each state. Judy Diamond calculates plan scores using an algorithm that considers key measures of the strength of a plan’s design, management and performance, as well as how each of those metrics compares to nationwide benchmarks.
Some highlights from the research, according to Judy Diamond Associates, include:
- Had the District of Columbia been included in the list it would have been ranked first with 12.71% of all D.C.-based plans receiving high scores, more than twice the national average of 5.2%.
- Wyoming has the fewest 401(k) plans of any state in the nation, but it has the second highest rate of good plans, 6.79%.
- About a third of all 401(k) plans, 32.3%, are located in one of the top 10 best performing states.
- Seven of the top 10 states were on the East Coast.
Judy Diamond Associates based research on the most recently available 401(k) plan disclosure documents released by the Department of Labor, which are available in the firm’s Retirement Plan Prospector database. Plans receive scores up to 100 based on information they report to the Department of Labor annually. A top score is any score above 80.
