R.I. ranks as 10th best state for highly rated 401(k) plans
JUDY DIAMOND ASSOCIATES, a benefits and retirement plan analyst in Washington, D.C., has published a study ranking Rhode Island 10th in a list of the 10 U.S. states with the highest percentage of top-rated 401(k) plans. In Rhode Island, 5.85 percent of all plans were highly rated according to measures of the plans' design, management and performance.
WASHINGTON – Rhode Island placed No. 10 in a study that ranked the 10 U.S. states with the highest percentage of top-rated 401(k) retirement plans.
Judy Diamond Associates Inc. evaluated each 401(k) plan based on information reported annually to the U.S. Department of Labor and awarded each plan a score between 0 and 100 according to “key measures of the strength of a plan’s design, management and performance, as well as how each of those metrics compares to nationwide benchmarks.”
Plans were considered to be “top-rated” if they received a score higher than 80.
The study concluded that 5.85 percent of all 401(k) plans in Rhode Island received a score higher than 80 and qualified as “top-rated” plans. Connecticut ranked at No. 1 with 6.86 percent of all plans scoring highly, followed by Wyoming at 6.79 percent and Alaska with 6.78 percent.
Massachusetts, the other New England state named to the list, ranked at No. 5 with 6.57 percent. The national average of highly scored plans was 5.2 percent of all plans.
“Those states with the highest concentration of top plans have higher participation rates and more employer generosity than their peers,” said Eric Ryles, managing director of Judy Diamond Associates. “Regional differences in plan strength will contribute to regional differences in participant outcomes.”
Seven of the top 10 states were located on the East Coast, Judy Diamond Associates reported, and 32.3 percent of all 401(k) plans nationwide are located in one of the top 10 states listed in the study.
The District of Columbia was excluded from the study, but if it had been included, it would have ranked first with 12.71 percent of all plans receiving high scores.
Judy Diamond Associates, based in Washington, D.C., provides sales prospecting and plan analysis tools for benefits brokers, financial advisers and retirement plan providers.