Comparing Your 401(k) Plan

There are now over 142,000 401(k) plans of all asset sizes nationwide reporting to the Department of Labor.

With 401(k) plans becoming the employer pension plan of choice, plan participants can now find out how their plan stacks up against an "average" 401(k) plan.

According to data in the 1996-1997 Standard Directory of 401(k) Plans, an average plan offers the participants six investment options, allows the participants to take out a loan against their account balance, provides daily valuation and has an employer matching contribution. The most common employer match rate is 50 percent of the first six percent a participant elects to defer.

One of the most generous match rates, 200 percent up to the first six percent of compensation deferred by the participant, is given to employees of Pemco Financial Services of Seattle, WA.

In addition to the employer contribution match, two of the more popular plan features with participants are plan daily valuation and loan features.

Daily valuation allows participants to ascertain, on a daily basis, their 401(k) account balance. The loan feature allows participants to take out a loan against the balance of their 401(k) account.

Fidelity Investments continues to dominate the 401(k) market. According to the 1996-1997 Standard Directory of 401(k) Plans, they are the most often used recordkeeper and investment manager.

The top five recordkeepers are:

1. Fidelity Investments
2. The Vanguard Group
3. Cigna
4. Hewitt Associates
5. The Principal Financial Group

The top five investment managers are:
1. Fidelity Investments
2. The Vanguard Group
3. Cigna
4. T. Rowe Price
5. Merrill Lynch

(All plans included in the study had a minimum of five million dollars in total assets.)

Ms. Diamond is president of Judy Diamond Associates, Inc., publishers of the 1996-97 Standard Directory of 401(k) Plans. To order or to get information about the directory, call 1-800-231-0669.

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