| Website | brightscope.com |
| Category | Other |
| Employees | 20 |
| Founded | 2/08 |
| Description | Rates 401K plans |
| Total | $2.9M |
| Series A, 5/08 | $900k |
| Series B, 9/09 Steelpoint Capital Partners | $2M |
BrightScope is an independent retirement plan ratings and investment research firm. The company quantitatively rates the quality of 401k plans and provides data analytics software to plan sponsors, investment companies, and advisors. The company also provides free research and reports to plan participants.
BrightScope is the brainchild of two investment portfolio managers and a long term HP engineering veteran. For years, the three had discussed the challenges human resource executives faced with 401k plan evaluation because benefits data has been controlled by a small group of companies that are not incentivized or governed by the same fiduciary standards that a plan sponsor must honor. Unfortunately, HR managers and senior executives had little they could do about it. Together the three founders of BrightScope decided to set out to achieve a lofty dream: to enhance and protect the retirement security, health, and welfare of America’s workforce by increasing the transparency and efficiency of the company benefits market. In 2007 they formed BrightScope and began to build the BrightScope RatingTM Engine. They spent the first year analyzing 401k filings and industry data and running 401k performance simulation tests. In 2008, the BrightScope team began constructing a user-friendly website and distribution platform. BrightScope.com publicly launched on January 29, 2009.
As of December 2009: BrightScope has rated over 25,000 401k plans, spanning more than 30 million workers and $1.9 trillion in assets, and has plans to rate more than 30,000 plans by the end of the year. The BrightScope Rating can be found at its public disclosure Web site: http://BrightScope.com, where consumers can find scores for small plans with assets of $50,000 to large plans with more than $30 billion.
BrightScope Rating is a quantitative 401k plan rating developed by BrightScope, Inc. in partnership with some of the country’s top independent fiduciaries, finance professors, and 401k experts. BrightScope Ratings take into account over 200 unique data inputs per plan and calculate a single numerical score to define 401k plan quality at the company level. The ratings algorithm runs thousands of simulations for each 401k plan in order to determine how quickly each plan will propel the average 401k participant to retirement. Using this rigorous approach, BrightScope ensures that every factor that affects retirement outcomes – such as company generosity, fees, investment menu quality, vesting schedules, and more – is accurately reflected in a company’s rating.
