MyPlanIQ's  Instablog

We report on their 401(K) plan. Certainly these large, profitable companies may have a range of retirement benefits and this is one aspect. However, this is the employees retirement money and the better the plan, the better the returns. 

The list of minor asset classes covered:
Foreign Large Blend: EFA, VEU, GWL, PFA
Intermediate-term Bond: AGG, CIU, BIV, BND
Large Blend: IVV, IYY, IWV, VTI, VV, SPY, DLN, RSP, SCHX
Mid-cap Blend: IJH, IWR, JKG, VO, MDY, EMM, PJG, DON, EZM, MVV
Moderate Allocation: AOM
Short-term Bond: CSJ, BSV, VCSH

As of Jan 19, 2011, this plan investment choice is rated as below average based on MyPlanIQ Plan Rating methodology that was designed to measure how effective a plan's available investment funds are . It has the following detailed ratings:

Diversification -- Rated as below average (32%)
Fund Quality -- Rated as above average (71%)
Portfolio Building -- Rated as poor (7%)
Overall Rating: below average (34%)

 The company recently upgraded their plan to include two more funds which drove the rating from 21% to 34%. Although 34% isn't great, they have made an improvement.

The use of good index funds is a point in their favor but the lack of asset classes and choice in funds make for a poor overall rating. The recent upgrade added a second bond fund which is an improvement but the funds are still meagre.

As we exit 2010 which was an outstanding year for US (and other equities) we may forget the gut wrenching turbulence of two to three years ago. It's important to have a plan with funds that will provide downside protection as well as capturing upside gains.

In this market it is even more critical to properly diversify and respond market changes. MyPlanIQ offers two asset allocation strategies: strategic and tactical asset allocation strategies (SAA and TAA for participants in Exxon Mobil Savings Plan).

US Equity: SPY or VTI
Foreign Equity: EFA or VEU
Fixed Income: AGG or BND
Performance chart (as of Jan 19, 2011)

Performance table (as of Jan 19, 2011)

Currently Commodities, US Equity and Real Estate are doing well. Only US Equity is available to Exxon Mobil Savings Plan participants.

Over the longer term, this plan beats the three asset benchmark by virtue of the US asset class choices. In the short term, it falls below the benchmark. In some ways, it is close to the benchmark plan because of the lack of choices.

If would be a stronger plan with more fixed income choices and an additional asset class. To date, this plan comes at the bottom of the list based on returns.

To summarize, Exxon Mobil  may offer employees a range of retirement benefits outside the 401K plan. However, it would be easy to improve the returns of this current plan. A lot of money is spent in administering this plan and it seems likely that the company could receive more bang for its buck.