Judy Diamond Associates released Tuesday a list of the best states for 401(k) plans based on the concentration of strong plans. A plan’s strength was based on its design, management and performance, and was scored on a 100-point scale. Any score over 80 was considered a top score.
The report found that almost a third of all 401(k) plans are located in one of the top 10 states. Furthermore, top plans weren’t limited to states with small populations, where fewer plans overall means a smaller number of top-scoring plans could push the state into the top 10.
“What’s exciting about these findings is that there is a broad diversity in the states listed. You’ve got some of the most heavily populated and some of the least heavily populated areas,” Eric Ryles, managing director of Judy Diamond Associates, told ThinkAdvisor by email. “The takeaway is that while there may be broad geographic trends, there’s nothing exclusionary about 401(k) savings. If a plan participant in Wyoming or Alaska can have as good a plan as someone in New York or California (and they can), then there are good options for anyone – regardless of area. You may have to look a little harder in some places, but anyone who is committed to a positive retirement outcome for themselves and their family has access the tools to make that a reality.”
Washington, D.C., was not considered in the list, but if it were, it would have ranked first. Judy Diamond found nearly 13% of all D.C.-based plans got a top score, more than twice the national average.
The following plan data is from Judy Diamond Associates, which is a sister company of ThinkAdvisor. Population data is from the U.S. Census Bureau.
10. Rhode Island: 5.85%
State population (2013 estimate): 1.05 million
Total plans: 2,409
Plans with a score of 80 or higher: 141
9. California: 5.92%
State population (2013 estimate): 38.33 million
Total plans: 63,792
Plans with a score of 80 or higher: 3,775
8. New York: 5.97%
State population (2013 estimate): 19.65 million
Total plans: 37,549
Plans with a score of 80 or higher: 2,240
7. Maryland: 6.43%
State population (2013 estimate): 5.92 million
Total plans: 11,289
Plans with a score of 80 or higher: 726
6. Virginia: 6.45%
State population (2013 estimate): 8.26 million
Total plans: 13,441