The 10 most generous U.S. retirement plans
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How important is a company match in getting 
you to save for retirement?
Very important, according to new research from BlackRock Inc (BLK.N) and Boston Research Group. According to the study, a company “match rate” has the single biggest influence on how much employees contribute to their retirement plan. Despite the power of the match, the average company matches just half of the first 6% of an employee’s 401(k) contributions.
I didn’t pay much attention to retirement benefits when I moved to New York in 1993 to work for Dow Jones, which is now a unit of News Corp (NWSA.O). At the time, my employer essentially handed us our retirement benefits on a silver platter: a lump-sum payout equivalent to 15% of my salary (albeit paltry) into a 401(k) plan. As the years went by and I changed employers, the retirement match in my 401(k) has gotten smaller and smaller. I have yet to meet anyone who said they took a job based on a company match. In fact, plenty of people don’t even factor retirement benefits when they change jobs.
I asked BrightScope, an independent tracker of retirement plans, to run a screen of the companies with the most generous defined-contribution benefits, which excludes pensions. Interestingly enough, nine of the 10 most generous plans only provide profit sharing contributions. “While in these cases the profit sharing contributions are extremely generous, it is important to remember that discretionary profit sharing contributions can be very good when the company is doing well, and then disappear if the company has a bad year,” says Eddie Alfred, vice president of research and data at BrightScope.
The firms with the more generous plans that have $100 million or more in assets are:
1. Oregon Anesthesiology Group (20% of compensation, up to IRS limits.)
2. O’Melveny & Myers LLP (Profit sharing percentage not disclosed.)
3. Anesthesia Service Medical Group (Match is 1000% of deferrals, up to IRS limits.)
4. Bryan Cave LLP (Profit sharing is lesser of $45,000 or 100% of compensation for partners.)
5. Skadden, Arps, Slate, Meagher & Flom LLP (Profit sharing is 8% for associate attorneys; 11% for special counsel with less than seven years of service; 13.5% for special counsel with more than seven years of service; and $45,000 for partners and managing directors.)
6. Ernst & Young U.S. LLP (Percentage of profit sharing for partners not disclosed.)
7. City of Hope Medical Group (Profit sharing is 20% of compensation, up to IRS limits.)
8. North American Partners in Anesthesia (Profit sharing for partners is the lesser of 25% of compensation or $49,000; physicians and administrative employees is the lesser of 15% of compensation or $30,000.)
9. Board of Trustees I.U.O.E Local 14-14B Annuity Fund (Profit sharing is $9.25 per hour worked.)
10. United Parcel Service Company [UPS.N] (Profit sharing is 12% of eligible compensation, up to IRS limits, for members of the Independent Pilots Association, which is a collective bargaining unit for UPS pilots.)
I’m not surprised to see law and consulting firms on the list, but who knew anesthesiologists had such generous retirement benefits?
To find out how your employer stacks up, log on to BrightScope to compare.
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Reuters Money
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Not at all surprised about anesthesiologists. After all, when you’re in the hospital, you’re likely to get their bill before you’re discharged. They are ALL about the money. Even more than surgeons.
Talk about apples and oranges… Comparing anesthesiologist with a multiemployer plan? Do a little research and give us something worthwhile. Where does this information come from?
Perhaps the best example of why these comparisons give cause for plan sponsors to be concerned comes from listing United Parcel Service Company as one of the top 10 plans in this article.
No question that the data suggest it belongs on the list.
But, dig a little deeper… the plan that makes it to BrightScope’s top 10 (using 12/31/07 data), appears to be the United Parcel Service Company UPS/IPA defined contribution, money purchase pension plan. That is a plan that covers about 3,000 participants.
It is not the UPS Savings Plan that covers 100,000+ participants. That plan is rated “poor” by Brightscope, in terms of company generosity – and that was before the match was frozen in 2009 (according to the Pension Rights Center). So the score would have been lower had the freeze been considered.
The real issue here may be whoever wrote this for Reuters – looks like they should have done more homework before posting these comparisons – they are not even apples to apples as the data is old (2007), and there are no adjustments to any of these comparisons where firms offer both 401(k) and defined benefit and/or retiree medical, nor are there adjustments to the ratings based on events subsequent to 2007.