Defined contribution plan sponsors in the utilities industry are doing a better job of preparing their workers for retirement than other industries, according to an analysis by Judy Diamond Associates that examined national retirement preparedness by industry.
“By looking at historical trends in plan performance, we saw that there were clear differences in how different industries are preparing their workers for retirement” said Eric Ryles, managing director of Judy Diamond Associates. “Employees in the utilities and mining industries saw their plans improve more often than participants in other industries.”
Each of the 20 major industry classifications described by the North American Industrial Classification System was ranked on changes to their average account balances, participation rates, employee and employer contributions, their rates of return and the number of plan red flags over a five-year period.
The industries were ranked across each metric based on the ratio of plans that saw improvements in performance compared to the number of plans that saw declines. The individual rankings for each metric were then combined into a single, overall score for each industry and the industries were ranked accordingly.
Judy Diamond based its research on the most recent 401(k) plan disclosure documents released by the Department of Labor. Judy Diamond provides sales prospecting and plan analysis tools for benefits brokers, financial advisors, plan providers and carriers serving the employee benefits and retirement markets.
In descending order, here is the first half of the top 10 list and the number of plans analyzed in each to compile this research:
10. Wholesale Trade – 28,549 plans
9. Educational Services – 4,412
8. Public Administration – 301
7. Finance and Insurance – 35,062
6. Arts, Entertainment and Recreation – 6,301
And on the following pages – in descending order – are the top five industries for retirement preparedness: