(MONEY Magazine) – Suppose for a moment that you are the corporate officer in charge of the $300 million 401(k) plan for 16,000 employees of Indiana-based Cummins Engine. You've just decided, like an estimated half of all plan administrators, that your plan should offer a carefully screened selection of mutual funds. How would you go about picking them? Well, you might hire professionals to analyze fund performance data, interview portfolio managers and then give you a list of top entries from the best-run fund families they could find. As it happens, that is precisely what most major companies like Cummins do when selecting funds to offer employees for their 401(k)s. Why go to such trouble? Because legally, they have to: Employers have a fiduciary duty to scrutinize the investments they include in retirement plans. ''Just offering employees a bunch of funds doesn't do the trick,'' says Brian Ternoey, head of investment services at the benefits consulting firm A. Foster Higgins & Co. ''If a company chose funds imprudently for its 401(k), it could be sued for violating its fiduciary responsibilities.'' Luckily, you don't have to be part of a major firm's 401(k) plan to benefit from these high-brainpower fund searches. In the table on page 60 we name 10 top 401(k) favorites -- two in each of five investment categories -- that you can invest in on your own. To find them, we surveyed six of the country's largest pension consultants -- companies that collectively help administer more than 4,000 401(k) plans. We then eliminated funds that were not among the 10 most popular 401(k) offerings within their family or that had not achieved a MONEY risk-adjusted grade of at least B, indicating that during the past five years the fund has achieved strong returns compared with the risks it took. (For more on MONEY's risk-adjusted grades, see page 62.) Note that our choices tilt toward billion-dollar heavyweights from large, well-known fund families, such as $21 billion Fidelity Magellan and $4 billion Twentieth Century Growth. That's not surprising: Funds that catch on with 401(k) plans quickly become giants, if they weren't already. Also, to simplify 401(k) administration, corporations seek major fund companies with back-office operations sophisticated enough to handle accounting for thousands of employees, as well as other shareholders. As a result, pension managers typically won't consider funds from small outfits, however attractive they may be for individual investors. Even so, long-term investors are not likely to go wrong with the funds below; all have scored high with the financial world's most demanding judges. ''Obviously, we can't make promises about return,'' says Ray McKinney, executive vice president of Atlanta-based pension consultant Hazlehurst & Associates. ''But our selection process ensures that all of our recommendations are solid choices that fulfill a fiduciary's responsibility.''

CHART: NOT AVAILABLE CREDIT: Source: Lipper Analytical Services CAPTION: THESE FUNDS CARRY A SEAL OF APPROVAL The 10 funds below are among those selected most often by corporations as investment options in their 401(k) plans. To qualify for consideration by 401(k) fiduciaries, each fund had to pass scrutiny with professional pension consultants, who evaluated them on such factors as performance and risk. All of the funds sell shares to the general public as well.