There are major differences in the performance of 401(k) plans across various industries nationwide, according to an analysis by Judy Diamond Associates.
The firm looked at the average scores for 401(k) plans in 20 different industry classifications and discovered a 38 percent gap in the average score between the top ranking group and the lowest ranking group.
"While it won't shock many to learn that financial professionals have the best performing 401(k) plans, when looking at the spread it becomes clear that there's a real disparity between the top and bottom industries," said Eric Ryles, managing director of Judy Diamond Associates.
"Workers on the bottom rung are faced with special difficulties in saving enough for retirement, and may have to contend with low (or no) employer matches, lack of financial education and sub-optimal contribution rates."
Judy Diamond Associates calculates scores using an algorithm that considers key measures of a plan's performance compared to other plans nationwide.
For this study, it looked at the average plan score for each of the 20 highest level industry groupings from within the North American Industry Classification System (NAICS), which encompasses more than 517,000 plans and $3.47 trillion in total assets.
Low plan scores can be the result of factors such as low participation rates, declines in contributions and the requirement for a plan to issue corrective distributions.
Judy Diamond Associates, a Summit based Professional Networks company, based this research on the most recently available 401(k) plan disclosure documents released by the Department of Labor.
Industries ranked 6 through 20 can be found following our top 5 list. The top five average 401(k) plan scores by industry (in ascending order) are:
5. Professional, scientific and technical services
NAIC code: 54
Number of plans: 112,988
Avg. plan score: 60.4
4. Utilities
NAIC code 22
Number of plans: 1,832
Avg. plan score: 60.7
3. Mining
2. Health Care and Social Assistance
1. Finance and insurance
