According to TechCrunch, BrightScope, a San Diego-based company that helps employees better understand and manage their 401K plans, has raised $2 million in funding led by Steelpoint Capital Partners.
BrightScope quantitatively rates 401k plans and gives plan sponsors, advisors, and participants tools to make their plans better. Their rating algorithm calculates a single numerical score for each 401k plan in the country after considering over 200+ individual data points in broad categories such as total plan cost, company generosity and investment menu quality.
The TechCrunch article cites an interview with BrightScope in which the company said they’re providing a much-needed service, since 30 percent of workers don’t participate at all in their company 401k programs, 22 percent don’t contribute enough to maximize matching benefits from companies, and 80 percent of workers have no idea how much they’re paying in 401k administrative and other fees.
BrightScope is the brainchild of two investment portfolio managers and a long term HP engineering veteran.
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