BrightScope is on a mission to increase the retirement security of America's workforce by bringing transparency and efficiency to the 401k plan market
San Diego, CA (PRWEB) January 29, 2009
BrightScope, Inc. (http://www.brightscope.com), an independent data analytics firm that provides 401k ratings and financial intelligence to plan sponsors and participants in all 50 states, today announced the launch of their 401k ratings disclosure website featuring the BrightScope Rating™, the nation's first online 401k rating system. The new BrightScope Rating debuted today at the 2009 Los Angeles Benefits Conference, co-sponsored by the Internal Revenue Service (IRS), the American Society of Pension Professionals & Actuaries (ASPPA) and the National Institute of Pension Administrators (NIPA).
The new BrightScope Rating is a quantitative 401k plan rating developed by BrightScope, Inc. in partnership with some of the country's top independent fiduciaries, finance professors, and 401k experts. BrightScope Ratings take into account over 200 unique data inputs per plan and calculate a single numerical score to define 401k plan quality at the company level. The ratings algorithm runs thousands of simulations for each 401k plan in order to determine how quickly each plan will propel the average 401k participant to retirement. Using this rigorous approach, BrightScope ensures that every factor that affects retirement outcomes - such as company generosity, fees, investment menu quality, vesting schedules, and more - is accurately reflected in a company's rating. The site provides open access to 401k ratings, allowing anyone to compare any 401k plan with another.
"BrightScope is very intuitive yet backed by solid research. It's a powerful tool for those who approach investing as a science." said Dave Logan, best-selling author of "Tribal Leadership."
The timing couldn't be better. Powerful forces have begun to converge to create the perfect storm for 401k fiduciaries across the country. In 2009, the 401k fee issue will become a Congressional priority. From new proposed 401k legislation to subprime originations, investment banking conflicts, and excessive 401k fees, the bright light of regulators will be focused on punishing companies and individuals that have acted improperly. The economic crisis has caused 401k participants to lose trillions of dollars. According to Independent Fiduciary Matt Hutcheson, thirty percent of the Fortune 100 is now facing an ERISA lawsuit.
"The BrightScope Rating creates a new industry standard for evaluating and benchmarking 401k performance across the country and delivers online 401k performance transparency," explains Joshua P. Itzoe, a Principal of Greenspring Wealth Management and author of "Fixing the 401k: What Fiduciaries Must Know (And Do) To Help Employees Retire Successfully." "Increased transparency will ultimately be a boon for 401k plan sponsors and their participants."
HR professionals, Chief Financial Officers, brokers and employees alike can simply visit http://www.brightscope.com to review their company 401k plan and determine the relative quality of the plan when compared to a unique peer group with similar demographic characteristics. Peer groups are groups of 401k plans of roughly the same size and industry that are used to compare the quality of 401k plans. Using peer groups ensures that similar size and industry rating criteria are applied to each plan.
"BrightScope is on a mission to increase the retirement security of America's workforce by bringing transparency and efficiency to the 401k plan market," said BrightScope CEO, Mike Alfred. "We want to educate plan participants so that they can encourage their company to make decisions that maximize their retirement outlook. We also want to prevent plan sponsors from making uninformed choices that can negatively impact 401k performance. Plan sponsors who use BrightScope can demonstrate to their employees, their board, their retirement committee, and to regulators that they are taking the necessary steps to improve the quality of their 401k plan."
Leading human resource executives facing increasing pressure to be proactive and knowledgeable about the 401k plan that they are offering to their employees are already beginning to use BrightScope for 401k plan benchmarking, plan design optimization, fiduciary prudence, risk mitigation, and enhanced employee recognition and recruiting opportunities.
"BrightScope has provided PETCO with valuable insights into the true investment returns of the funds in our 401k program," said Julie Cunningham, PETCO Director of Total Rewards. "True transparency will allow us to negotiate more effectively to minimize hidden fees and to help maximize returns for our associates in helping them prepare for retirement."
BrightScope has reviewed and rated 1000 of the largest 401k plans in the country and expects to rate the plans of companies covering two out of every three employees by the end of 2009.
There is no charge for employees or employers to review their 401k plan rating. Companies can submit updated information about their 401k plan to refine their current rating and review BrightScope tips which can help them improve their plan rating over time.
Companies with 401k plans currently rated among the nation's best, according to BrightScope:
- Avis Budget Group, Inc.
- Bank of New York Mellon
- Nucor Corporation
- Southwest Airlines Company
- Saudi Arabian Oil Company
These highly rated plans represent some of the top plans within their respective peer groups, as measured in terms of plan size, number of participants and employee demographics. Participants contributing to these plans have a high likelihood of having a secure retirement.
To see detailed scores and attributes for the aforementioned leading 401k plans or to review your company 401k plan rating, visit http://www.brightscope.com.
BrightScope is an independent data analytics firm that quantitatively rates 401k plans and gives employers, employees, and brokers tools to enhance plan performance and maximize retirement outlook. The BrightScope Rating™, developed in partnership with leading independent 401k fiduciaries, reviews over 200 unique data inputs per plan and calculates a single numerical score which defines 401k plan quality at the company level. BrightScope published ratings, rating definitions, criteria and methodologies are available on the agency's public site, http://www.brightscope.com
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