Study: Tupelo a leader in 401(k) contributions

Dec. 05--According to research from financial technology company SmartAsset, using data from the United States Department of Labor, Tupelo employers are among the leaders in Mississippi at matching 401(k) contributions.

The All-America City is ranked sixth, with 42.7 percent of employers matching employees' contributions to their retirement plans.

Two other cities in Northeast Mississippi also are ranked in the top 10. Corinth is ranked fifth, just ahead of Tupelo, with employer contribution rates of 43.4 percent. West Point was ninth at 40.3 percent.

The average statewide was 35.3 percent.

According to SmartAsset, determining which communities have the best 401(k) benefit plans began by looking at employer and employee 401(k) contributions to determine employer contribution percentage. This is the sum of employer 401(k) plan contributions divided by the sum of total 401(k) plan contributions.

"We then indexed the ratio to 100, with a score of 100 representing the highest employer contribution percentage. This index reflects how generous companies are to contribute to employee 401(k) plans," SmartAsset said in a press release.

"We then created an investment performance index by calculating annual earnings on investments as a percentage of average total assets. We indexed these values to 100, with a value of 100 reflecting the highest return on assets. This helps show which US cities have the best 401(k) plan investment performance."

SmartAsset also developed an administrative fee index by calculating annual administrative fees as a percentage of average total assets.

"We indexed these values to 100, with a value of 100 reflecting the lowest administrative fees. This helps determine where employees pay the lowest fees in their 401(k) plan."

A weighted average of the indices for employer contributions, investment performance and administrative fees produced an overall score. The final number was indexed so higher values reflect the best 401(k) benefit plans.

The average investment performance studied by SmartAsset in the state was 0.1 percent. In this measure Tupelo was tied with Jackson with the best performance with a 2 percent average. Administrative fees averaged 0.2 percent, but Tupelo's averaged 0.1 percent. Corinth averaged 0.5 percent, while West Point matched the state average.

The overall investment performance index in Tupelo was third-best in the state, at 60.10. Topping the chart was Brandon at 61.1, and Diamondhead at 60.68.

Also faring well in overall investment performance were Ripley (ranked sixth, 59.53), New Albany (seventh, 59.34), West Point (ninth, 58.45) and Pontotoc (10th, 58.3).

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