Facebook, Amazon, Whole Foods offer subpar 401(k)s, study finds

NEW YORK— A first-of-its-kind ranking of 401(k) plans at the 250 biggest companies in the United States found that ConocoPhillips and Abbott Laboratories are among those that provide the most lucrative retirement benefits. Among the least generous are Facebook, Amazon.com and Whole Foods Market. The natural-foods grocer offers a maximum contribution of $152 annually.

ConocoPhillips topped the Bloomberg News rankings of the largest public companies’ 401(k) plans, largely due to a matching formula that contributes 9 percent of annual salaries for employees who save as little as 1 percent of their pay.

Facebook finished last in the Bloomberg rankings, which were based on 2012 data. The social media company didn’t offer any match at the time. It started making contributions in April to its 401(k) plan.

One finding rings out clearly: when generously conceived, a 401(k) plan can put workers on the track for a comfortable and secure retirement.

Created by federal legislation in 1978 as a supplement to traditional pensions, 401(k)s have supplanted them as corporate America’s primary retirement vehicle.

In 2010, the Department of Labor began posting information online that the government had required companies to provide about their 401(k) plans. Yet the details were so difficult to access and understand that few employees could ever hope to decipher them.

To bring clarity to the 401(k) universe, Bloomberg News reporters spent six months tracking down and studying company filings. Bloomberg’s analysis focuses on what companies offer new hires.

ConocoPhillips estimates that an employee could retire at 60 after 35 years of service with savings of $3.8 million, adjusted for inflation, assuming a starting salary of $75,000 and increases of 4 percent a year.

While Google and Apple ranked in the top half, other tech giants such as Facebook, Amazon.com, Yahoo and Oracle lagged. One reason such companies scrimp on 401(k) plans is that some highly skilled employees share in stock ownership.

Until this year, Facebook didn’t offer any match. This April, the company started making contributions of 50 cents on the dollar. Amazon matches up to 2 percent of employees’ salaries if they contribute 4 percent.

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