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Pensions are becoming quaint artifacts of yesteryear, replaced by company-sponsored retirement plans such as 401(k)s. Used effectively, these plans can help us build a solid financial future, but some make the process much easier than others.
Who's on top?
The folks at BrightScope rate retirement plans at gobs of companies, and they've just released their 2010 list of the top 30 plans. In the typical 401(k) plan, an employer matches 50% of your contributions up to the first 6% of your salary, meaning that it will chip in as much as 3% of your pay. In comparison, here's what some of the top-rated companies' plans offer:
- Biotech titan Amgen (Nasdaq: AMGN ) makes a 5% "core" contribution to workers' accounts, then matches 100% of employee contributions up to 5% of salary.
- Steel company Nucor (NYSE: NUE ) greets employee contributions up to 7% of salary with a match between 5% and 25%, depending on company performance. But look at the big picture, and you'll also find annual profit-sharing bonuses that can top 20% of salary in good years.
- Tobacco giant Altria (NYSE: MO ) matches employee contributions up to 3% after 90 days on the job. After a year, workers can receive a company contribution to their retirement account representing 10% to 15% of their salary.
- At Chevron (NYSE: CVX ) , if you contribute at least 2% of your salary, the company will chip in another 8%. Whereas many company plans offer limited investment options, Chevron lets you access more than 2,000 mutual funds.
Learning what the best plans offer can help you evaluate your own plan and those of prospective employers. You may also be able to use the information to improve your current plan. Talk with your benefits department about features you'd like to see; if they hear from enough employees, they might actually make those changes. (It's a big deal for a company to up its matching from 50% to 100%, but it's much less expensive for your plan to offer a wider range of available mutual funds.)
Finally, as an investor, consider tapping Brightscope's resources to learn how attractive a prospective portfolio holding is for workers. The companies with the most generous retirement benefits (and other benefits) are more likely to hang on to valuable employees, and that should ultimately benefit shareholders. The best companies serve their customers, shareholders, and employees.