A: A:Some 401(k) plans are better than others, and employees are increasingly dissecting prospective employers’ 401(k) plans before job-hopping.
Plans that offer brand-name funds and a variety of fund categories are among the better ones. For example, a plan that offers Fidelity funds, Vanguard funds, and T. Rowe Price funds may be more attractive, because these funds are generally well-regarded.
Offering different types of funds is also important. “You want a plan to have an S&P 500 index fund, a large cap growth fund, a large cap value fund, a mid cap fund, a small cap fund, a fixed-income fund, and a bond fund,” says Robert Liberto, vice president in charge of defined contribution plans for Segal Advisors in Manhattan.
“When a company offers a good variety of options, participants get the opportunity to create an asset-allocation mix that fulfills their needs. ... The plan participants should have options that allow them to take different types of risk.”
Other things that make a plan attractive are allowing new employees to join immediately and offering convenient access to their accounts — via the Internet, voice-response systems, on-demand statements, and serv-ice reps available for questions and personal assistance.