After two years in second place, the 8,586 CPA firms tracked by Judy Diamond Associates, a unit of ALM Global LLC, for the seventh annual "401(k) Plan Benchmark Report" have finally claimed the title of highest ranked industry grouping for the best 401(k) plans.
The report provides an in-depth look at 27 different industrial groupings across eight company sizes. More than 600,000 active 401(k) plans with $8.0 trillion in assets covering 96 million workers were analyzed to create this unique and comprehensive look at the country's primary retirement vehicle.
CPAs were helped by claiming the top spot in Average Account Balance ($145,838) and Participation Rate (median of 100%), and the No. 2 spots in Employee Contribution ($8,619 per participant) and overall Plan Score. The median account balance across all CPA firms is $140,093, putting them about $4,000 ahead of lawyers and $11,000 ahead of financial advisors (which widens the gap from last year, when they were only $5,000 ahead).
It should also come as no surprise that these firms enjoy some of the longest tenured employees (fourth) highest over plan health score (second), and highest contributions per participant (second). CPAs enjoyed almost a $6,000 bump in median account balance, while participant contributions rose 17% year over year to $8,750.
Nearly 54% of all CPA firms had one to 10 employees, behind only dentists, financial advisors and lawyers in this metric. Unsurprisingly, all four of those industry sectors rank in our Top 5, along with physicians.
The following industries received top marks:
- Certified Public Accountants
- Financial Advisors
- Lawyers
- PhysiciansDentists
According to the report, year over year, total 401(k) contributions rose by $42 billion dollars to a total of $502 billion while total 401(k) assets increased by $900 billion to $8.0 trillion. On a per-participant basis, contributions actually declined slightly due to the influx of more than 4 million new 401(k) participants entering the system, as new employees typically contribute fewer dollars per paycheck than established workers.
This is the largest increase in new participants in the last decade and signifies the return of those who had been forced out of the system due to COVID-19 related layoffs and business closures.
The complete "401(k) Plan Benchmark Report," sponsored by Mutual of America Financial Group, can be downloaded HERE.
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