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The Journey: List of best 401(k) plans doesn't tell whole story

Janet Kidd Stewart, Tribune News Service on

Published in Home and Consumer News

Airline workers have the best 401(k) retirement plans, a new study claims, but that's little comfort to Capt. Mike Burr, a 60-year-old American Airlines pilot still on the job after years of contract concessions, pay cuts, a pension freeze and a 2011 bankruptcy filing.

Delta, American, United and Southwest airlines swept the top four spots on a new ranking of the Top 30 401(k) Plans by BrightScope. The list considered plans with more than $1 billion in assets and ranked them on generosity of company contributions, vesting schedules, fees and participation rates.

Airlines have bolstered their 401(k) plans to help soften the blow of pension freezes, but the list provides a good illustration for retirement savers about how individual outcomes can vary dramatically, even among participants in a great plan.

When Burr began his career 29 years ago after a stint in the U.S. Navy, pilots had a mandatory retirement age of 60. The mandatory age is now 65. Burr, a pilots' union official, says he'll need to work right to the end, and still won't have enough to generate the retirement income he expected for most of his career.

"The 401(k) plan looks lucrative, if you have 40 years to accumulate," Burr said. "I don't have time on my side."

To measure how your own plan stacks up, consider these numbers from BrightScope:

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-- $15,000 – That's how much, on average, companies on the list paid out per retirement plan member in matching or profit sharing contributions.

-- 26 of the top 30 – That's how many of the companies on the list make new hires immediately eligible to participate in their retirement plans.

-- 29 of the top 30 – The number of companies that make their matching 401(k) contributions immediately vested, rather than using a vesting schedule to lure employees to stick around.

-- 0.22 percent – The total average annual cost of the best plans, compared to more than 1 percent of assets for the smallest plans in the BrightScope database.


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