How we grade 401(k) plans

Short version: every grade is an estimate computed only from what the employer filed with the U.S. Department of Labor on Form 5500. We compare each plan to similar plans, meaning the same industry and the same number of workers, on four things: how much money the employer puts in, how much the plan costs, how much employees save, and a few helpful features. Then we subtract points for compliance problems the employer reported. You get a score from 0 to 100 and a letter grade.

Where the data comes from

Every private-sector employer with a 401(k) plan has to file an annual report, Form 5500, with the Department of Labor. Large plans (generally 100+ participants) attach audited financials on Schedule H. Small plans file the short Form 5500-SF or Schedule I. The DOL publishes all of these filings as bulk datasets and updates them about once a month. 401kGrade uses filings for plan years beginning in 2024 (DOL dataset dated 2026-09-25). We graded 516,794 plans out of 760,035 distinct 401(k) filings.

Which plans get a grade

  • The plan has a 401(k) feature (feature code 2J) and is a single-employer plan.
  • It averaged at least 5 active participants during the year. That leaves out most owner-only "solo" plans.
  • It has assets and is not a final filing for a plan that is shutting down.
  • The numbers make sense. If the filing shows average employer or employee contributions above the IRS's total per-person limit ($69,000 for 2024), or admin costs above 10% of assets, that almost always means a data-entry error, so we skip the plan rather than guess.
  • Multiple-employer, pooled (PEP), PEO, and association plans are not graded yet. Their totals mix many unrelated employers.

The score (0–100)

1. Employer generosity: up to 50 points

We divide employer contributions for the year by the average number of active participants, meaning current employees who are eligible for the plan. Then we rank that number against peers. A plan that beats 90% of its peers gets 45 of the 50 points. This counts most because the company's money is the biggest thing that sets one 401(k) apart from another. Filings show total dollars, not the match formula. A plan with a generous match can still score lower if few employees contribute enough to collect it.

2. Cost: up to 25 points

We divide administrative expenses paid from plan assets (recordkeeping, audit, legal, advisory, and similar fees) by average net assets. Then we rank that against all graded plans of the same size, since bigger plans get better prices. Lower cost earns more points. Important limit: Form 5500 doesn't capture the expense ratios of the funds in the plan, and those are often the biggest cost. If a plan reports $0 in direct expenses, the employer may be paying the bills, or the fees may be inside the funds. We can't tell which, so those plans get a neutral 12.5 points.

3. Employee saving: up to 15 points

We rank participant contributions per active participant against peers. It's a rough stand-in for how many people actually use the plan and how much they put in. Strong saving usually goes with good plan design: easy enrollment, a match worth chasing, decent communication.

4. Features: up to 10 points

7 points if the plan reports automatic enrollment (feature code 2S), which is one of the best-proven ways to raise retirement savings. 3 points if it uses a default investment for people who don't choose (code 2T).

5. Red-flag deductions

These come straight from the yes/no compliance questions on the filing:

  • −10: Employee contributions were not deposited on time ("late deposits").
  • −10: The plan failed to pay benefits when due.
  • −10: The plan reported a loss from fraud or dishonesty.
  • −10: The plan reported non-exempt transactions with a "party in interest" (such as the employer).
  • −10: The auditor gave a qualified or adverse opinion. −5 for a disclaimer of opinion.
  • −5: The plan reported having no fidelity bond (insurance that protects participants against theft).
  • −5: The plan had a blackout period without the required notice to participants.
  • −3: Corrective distributions, which usually means the plan failed nondiscrimination testing and refunded money to higher earners.

Peers

For generosity and saving, a plan's peers are plans in the same industry sector (from the NAICS-based business code on the filing) with a similar number of active participants: 5–24, 25–99, 100–499, 500–2,499, 2,500–9,999, or 10,000+. If that group has fewer than 30 plans, we compare against all plans of that size instead. Each plan page tells you which peer group it was compared with.

Letter grades

A = 75+, B = 60–74, C = 45–59, D = 30–44, F = below 30. Because most of the score is a ranking against peers, grades work a bit like a curve. In this data: A 10.8%, B 21.1%, C 23.3%, D 23.1%, F 21.7%.

What the grade can't tell you

  • Your exact match formula, vesting schedule, or eligibility wait. Check your Summary Plan Description.
  • Fund expense ratios and investment quality. Check your annual 404(a)(5) fee disclosure.
  • Anything that changed after the filing year.

Found an error? The data comes straight from the DOL. Each plan page lists the filing's acknowledgment ID, so you can check it against the original at efast.dol.gov.

Not financial advice. 401kGrade gives general information and estimates based on public filings.