The Worst 401(k) Plans
Curious as to how your 401(k) plan compares to others? Business Week just published a list of the worst 401(k) plans based on criteria such as participation rate, default rate, fees, and employer match (see also “The Best 401(k) Plans). The full list includes fifty plans. I’ve listed the twenty worst plans below.
- Darden Restaurants
- Big Lots
- RadioShack
- Zale
- Compass Group USA
- Bob Evans Farms
- MPS Group
- O’Reilly Automotive
- Best Buy
- Pep Boys
- CSK Auto
- Lowe’s
- Whole Foods Market
- Bon-Ton Stores
- Safeway
- Northrop Grumman
- AutoNation
- Penske Automotive Group
- TCF Financial
- OfficeMax
The full list is heavily populated with restaurant chains and retailers. Other notable names include Borders, Kohls, Walmart, Burger King, Target, JC Penney, and Home Depot. Is your employer listed?
Oh, and here’s a bit of 401(k) trivia for you… Total 401(k) holdings across the United States stood at $3 trillion at the end of 2007. Fast forward one year to the end of 2008, and… Poof. $2.4 trillion. That’s $600B that just evaporated.
Disclaimer: Discover is a paid advertiser of this site.
Reasonable efforts are made to maintain accurate information. See the Discover online credit card application for full terms and conditions on offers and rewards.
Modified on March 30th, 2009 - 20 Comments
Filed under: Retirement, Saving & Investing
About the author: Nickel is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!
Related articles...
» The Best 401(k) Plans» The Worst 529 Plans – 2009 Edition
» Should We Get Rid of 401(k) Plans?
» Your 401(k) Match: Don’t Miss Out on Free Money
» 401(k) With No Match, Should You Contribute?
» The Best 529 Plans – 2009 Edition
» The Best 529 Plans, Revisited
» Should You Roll Over Your 401(k)?
Was this article useful? Please sign up to receive our content via e-mail:
20 Responses to “The Worst 401(k) Plans”
Leave a Reply
Top Cards by Category
The new Discover it card is out to change the way people think about credit cards. No annual fee. No overlimit fee. No foreign transaction fee & no pay-by-phone fee. No late fee on your first late payment. And Discover won't increase your APR for paying late.*
Bonus Miles: Earn 30,000 bonus miles toward Award Travel after you spend $500 on the Card within the first three months of Cardmembership. Earn As You Spend: Get 2X miles on Delta purchases and 1X miles for all other eligible dollars spent.
The new Discover it card is out to change the way people think about credit cards. No annual fee. No overlimit fee. No foreign transaction fee & no pay-by-phone fee. No late fee on your first late payment. And Discover won't increase your APR for paying late.*
The new Discover it card is out to change the way people think about credit cards. No annual fee. No overlimit fee. No foreign transaction fee & no pay-by-phone fee. No late fee on your first late payment. And Discover won't increase your APR for paying late.*
The new Discover it card is out to change the way people think about credit cards. No annual fee. No overlimit fee. No foreign transaction fee & no pay-by-phone fee. No late fee on your first late payment. And Discover won't increase your APR for paying late.*
The new Discover it card is out to change the way people think about credit cards. No annual fee. No overlimit fee. No foreign transaction fee & no pay-by-phone fee. No late fee on your first late payment. And Discover won't increase your APR for paying late.*
The SimplyCash(R) Business Card from American Express aims to help your business succeed with a generous cash-back rewards program. Many businesses can benefit from cash back categories such as U.S. office supply stores, wireless telephone services purchased directly from U.S. service providers and U.S. gas stations. This card not only offers a low introductory purchase APR but also doesn't charge an annual fee.
The new Discover it card is out to change the way people think about credit cards. No annual fee. No overlimit fee. No foreign transaction fee & no pay-by-phone fee. No late fee on your first late payment. And Discover won't increase your APR for paying late.*
- How to Become a Millionaire
- How to Get Out of Debt
- The Best Dollars I've Ever Spent
- How Our Estate Plan is Structured
- How We Paid Our Mortgage In Less than 10 Years
- Money Making Ideas
- How to Manage Your Asset Allocation with Multiple Accounts
- Consumption Smoothing - Save While the Saving's Good
- How to Save on Groceries
- How Much Life Insurance Do You Need?
- Eleven Great Books About Money
- Dave Ramsey is Bad at Math
- Dish Network Customer Service SUCKS
- $8,000 Homebuyer Tax Credit
- Pay Off Mortgage Early or Invest?
- How to Claim the First-Time Homebuyer Tax Credit
- Termite Control: Sentricon vs. Termidor
- How Much Should You Pay a Babysitter?
- Reduced Credit Limits? Share Your Experience
- Ethanol Blended Gas = Lower Mileage?
- $15,000 Homebuyer Tax Credit
- Buying Furniture off the Back of a Truck
- Will Mac OS X Lion Kill Quicken 2007?
How to save money on insurance
- Can you afford an international retirement living?
- How to help your family after you are gone
- Will Social Security be gone before I retire?
- Refund, or no refund?
- This battle of the sexes has no winner
- What to look for when buying an energy-efficient home
- The hidden savings in a rent payment
- How to save money on vacations using social media and new technologies
- How to budget without regular paychecks
- What do you do with your windfalls?
March 27th, 2009 at 7:19 am
Funny that it is mostly retailers . . . hourly workers taking it on the chin!
March 27th, 2009 at 7:46 am
This is off topic but what can I do about my 403 (b) other than just ignore looking at it very closely? My lossses are very sad!!! I guess just hang in there?
March 27th, 2009 at 8:35 am
Is it accurate to rate a 401(k) on participation? I’d think that could be more a reflection on the employees than the employer since they can’t be forced to participate. I’d also think that the quality of a 401(k) should largely be decided by the company match, fees, and what investments are available to participants. My last point is that even a “bad” 401(k) is probably better than no 401(k) at all.
March 27th, 2009 at 9:30 am
I am with Adam above, I think the scale of participation is really skewing these results. It would be more interesting to compare based only on default rate, fees, and employer match, probably weighted towards the fees.
March 27th, 2009 at 9:50 am
It was pretty lazy of Business Week not to adjust for income. I suspect that people making $50K from Darden or $50K from IBM will have similar participation rates — but many more people at IBM make $50K.
March 27th, 2009 at 11:00 am
Agreed on it being a bad survey. I can speak for target’s plan. 5% match on 5% contribution and the fees are very reasonable, if not low. We always get mailings on why it’s important to save. We can’t force people to take free money.
March 27th, 2009 at 11:13 am
It’s important to remember that that $600B loss was a paper loss. It’s not like real money really existed and was really lost.
March 27th, 2009 at 12:29 pm
Wow, I used to work for Northrop Grumman. The 401K plan used to be good when I was there. I’m just glad my current employer isn’t on that list.
March 27th, 2009 at 1:41 pm
“That’s $600B that just evaporated”
When the market fails to provide the anticipated return and instead results in a loss, the money “evaporates”.
But when that same money was suddenly appearing in our accounts it didn’t seem so strange.
Into and out of thin air, only one is treated strange in the stock market.
March 27th, 2009 at 3:47 pm
Wait a second, Target matches 100% up to 5% of your base salary? That is GOOD!
I’m at a very traditional company — they match 75% up to 6% of your base (meaning if you contrib 6%, they will contrib 4.5%). Although we also have a defined benefit (pension) plan — for now. I’m happy with that for the most part although the breadth of fund options leaves a bit to be desired. At the same time, I know of some folks here that just split their contribs evenly across all available funds so choice is not always a *good* thing, for some people at least.
I’m kind of surprised that the 401(k) losses amounted to only 20% though. Figured it would be more.
-Mike J
March 27th, 2009 at 5:41 pm
My company matches 100% of your contribution, up to 10% of your base salary. If you make less than $50k, they kick in an extra 4% without you even having to contribute, and if you make between $50k-$70k, they give you 2%
March 28th, 2009 at 12:10 pm
I don’t see how Frito-Lay isn’t on the list, they only matched 50% on up to 4% of your pay. Not to mention the plans the funds they had through Fidelity were terrible performers even before the markets fell.
March 28th, 2009 at 6:10 pm
I don’t know, I would think they should list the 20 largest companies which don’t offer a 401k as the 20 worst 401k plans.
March 28th, 2009 at 8:14 pm
I think Tim has the best answer.
I was glad to see my employer not listed, but I went to the sight and went through their index, and US Steel wasn’t listed. They match 100% up to 5% or 6% depending on seniority, and contribute seperately depending on your age from 5 – 8.5% (7.25% for me). Offered through Fidelity with choices from several Vanguard/TRP funds as well. I’m sure they would be listed among the top offered plans.
March 29th, 2009 at 12:18 am
Interesting that three of Northwest Arkansas’s largest employers (Wal-Mart, Tyson, J.B. Hunt) all make the list…
March 29th, 2009 at 12:36 pm
Does anyone know if any of these companies have different plans for the retail workers as they do for the administrative/IT/executive offices?
March 30th, 2009 at 12:19 am
Is there a list of the best companies? I wonder if there are any companies that give employees full options like choosing a 401k or a Roth and still matching up to a percentage? That would be a great employeer
March 30th, 2009 at 8:52 am
The Best 401k list was just published on this site.
March 30th, 2009 at 2:04 pm
If you click on the link for the full list, and then click on the BrightScope link on that page, you can check a single plan’s rating.
I found it particularly interesting that some companies have multiple plans with vastly different ratings. For example, the poorly-rated (37/100 points) “Northrop Grumman Financial Security and Savings Program” is not the one that the vast majority of Northrop Grumman employees participate in (27,000 participants) — that one is the “Northrop Grumman Savings Plan” (130,000 participants) with a rating of 76/100.
March 30th, 2009 at 3:32 pm
“Total 401(k) holdings across the United States stood at $3 trillion at the end of 2007. …end of 2008, and… Poof. $2.4 trillion. That’s $600B that just evaporated.”
Bad statistician! Part of that is probably outflow. People do read the news, freak out, and stop their contribution to 401k plans. Not enough inflow to offset outflow, and holdings will drop even if money doesn’t evaporate.