BrightScope is developing a system to rate 401(k) plans in an attempt to provide more information to help people better evaluate different retirement plans, writes Amy Feldman for BusinessWeek. The company’s focus is providing ratings based on quantitative factors and how well a plan is creating retirement income security for participants.
However, the start-up company is currently having difficulties sifting through all the data and at times unable to access data from institutional offerings. Retirement experts are also questioning BrightScope’s decision to not include other retirement benefits like pensions or profit-sharing plans. So far, BrightScope’s list of 401(k) plans is mostly made up of industries with a well-paid and stable workforce. High paid employees are more inclined to participate in retirement plans and contribute at higher levels, which also skews BrightScope’s ratings.
For more information on 401(k)s, visit our 401(k) category. Be sure to take a look at our 401(k) special report for a more in depth review.
Max Chen contributed to this article.