Difficult Comparisons

BrightScope’s website doesn’t measure one company against another. Also, its ratings are based in part on workers’ behavior: whether they participate in the plan, and how much they save.

To bring clarity to the 401(k) universe, Bloomberg News reporters spent six months tracking down and studying company filings. Bloomberg’s analysis focuses on what companies offer new hires.

Efforts to make plans more transparent and understandable to employees are vital, Massachusetts Secretary of the Commonwealth William F. Galvin said in an interview.

“It’s very hard to do a comparison of your plan versus other plans, and employees are also in the dark about how much they’re getting and any changes to the plan,” said Galvin, who has urged Congress to force companies to disclose shifts in the timing of their 401(k) contributions. “No one ever envisioned, when 401(k)s started, that people would become so dependent on them for retirement, and regulation hasn’t kept pace.”

Long Tradition

Energy and biotechnology companies generally scored high in the Bloomberg rankings. Many used to offer pensions to all employees, and have continued the tradition of funding the bulk of savings needed for a secure retirement.

ConocoPhillips estimates that an employee could retire at 60 after 35 years of service with savings of $3.8 million, adjusted for inflation, assuming a starting salary of $75,000 and increases of 4 percent a year.

“Our goal is to help employees replace at least 80 percent of their incomes in retirement by providing two-thirds of what they need while they save one-third,” said Lynn Tramel, a benefits manager at ConocoPhillips. “It’s a partnership.”

Biotechnology and science companies rely on highly educated employees, many of whom have Ph.D.’s or M.D.’s., and substantial retirement plans serve as powerful recruitment and retention tools.

At Abbott Laboratories, which made Bloomberg’s top 10, employees who save just 2 percent of their annual salaries get a 5 percent match from the company.

Giving Incentives

“We want to give incentives to young employees without a lot of discretionary income,” said Stephen Fussell, executive vice president of human resources at the Abbott Park, Illinois-based pharmaceutical company. “We don’t think you need to work at 10 companies over your career to keep advancing and growing.”

Near the bottom are retail companies, including Whole Foods and Home Depot. Retailers say they consider a broad range of benefits and costs and are especially weighing rising expenses for health care.

“In addition to our 401(k) plan, we offer benefits that our more than 80,000 Team Members have the opportunity to actually vote on, including paying only $0 to $15 per paycheck for health insurance premiums, and a broad-based stock plan,” said Mark Ehrnstein, global vice president of Team Member Services at Austin-based Whole Foods.

At Atlanta-based Home Depot, employees must wait three years to be vested. The retailer also doesn’t match employees’ contributions until they have worked there for a year. Then it puts in a maximum of 3.5 percent if employees save 5 percent or more of their salaries.

“Our view is, if you hold up your end, we’ll hold up ours,” said Brant Suddath, Home Depot’s director of benefits.