ST. PAUL, Minn. - MSI Insurance Co. moved Jan. 1 to the use of daily valued mutual funds as investment options for its bundled 401(k) clients.
Three funds from the Vanguard Group of Investment Cos. Inc., Valley Forge, Pa., were selected as investment options: Windsor II; the Institutional Index Fund; and the Wellington Fund. The Capital Growth Equity Fund, from Scudder, Stevens & Clark Inc., New York, also was selected as an investment option.
MSI previously employed three investment advisers to manage separate accounts as investment options for the bundled 401(k) service. Terminated were Investment Advisers Inc., Minneapolis, which managed a balanced fund; Duff & Phelps Investment Management Co., Chicago, which managed a large-capitalization equity fund; and Stein, Roe & Farnham Inc., Chicago, which managed a growth equity fund.
MSI provides a wrap accounts for defined contribution plan clients, using a single group annuity contract format, with four mutual fund investment choices managed by outside investment advisers. MSI manages a general account investment option, investing in fixed-income instruments and guaranteed products. MSI's client base consists of about 800 small to medium-sized defined contribution plans, with a total of about $200 million.
Paul Doxsee, MSI's director, said clients were eager to move to a daily valued fund environment, where plan participants could look up mutual funds they use in the newspaper for performance information. "Brand-name recognition of funds was a huge plus in our selection of Vanguard and Scudder Stevens," he said.
MSI also is developing an automated telephone voice-response system for implementation in July.
CoreStates global bond fund
PHILADELPHIA - CoreStates Investment Advisers introduced in December the CoreFunds Global Bond Fund, its 10th institutional mutual fund for use by defined contribution plans. The global bond fund is "certainly not your run-of-the-mill mutual fund," said Pam Bennett, assistant vice president. "But we have had a number of clients requesting such a fund, particularly some of our more technology-oriented clients, such as pharmaceutical companies."
CoreStates also is fine-tuning its automated voice-response system, adding features that enable participants to perform 401(k) loan modeling functions on the telephone system. Participants can perform a number of what-if scenarios, select the loan option they want and have their employer receive completed loan application papers, ready for immediate authorization. The process generally will be completed within a few working days, said Ms. Bennett. The new loan-by-phone features are expected to be on-line by Feb. 1.
Social account added
ST. LOUIS - General American Life Insurance Co. hired Franklin Research & Development, Boston, to manage a socially responsible domestic equity account starting Feb. 1.
Franklin will use five environmental and social screens in managing the separate account, which will be available as part of General American Life's bundled 401(k) service or as an investment-only, institutional fund choice. The new Franklin fund is General American's 16th investment option offered to defined contribution plan sponsors, through a mixture of internal asset management and outside managers. As of Dec. 31, General American provided full bundled 401(k) service to 204 defined contribution plans with $304 million in assets.
Bill Hicks, regional pension manager, said General American's clients, particularly those in the Northeast, have been expressing "a tremendous interest in socially responsible equity funds. Both sponsors and their participants have shown a strong leaning toward more responsible investment of retirement assets. We decided to meet that need through an agreement with Franklin."
INVESCO joins Wyatt alliance
WASHINGTON - The Wyatt Co. added INVESCO Funds Group Inc., Denver, as the seventh investment partner in its mutual fund alliance, PREFERRED CHOICE. Nineteen INVESCO mutual funds, including international and industry-specific funds, will be available to plan sponsors through the bundled 401(k) service. PREFERRED CHOICE has attracted 15 clients since its start in June, said Bob McKee, a Wyatt spokesman.
Andersen adds Windows format
CHICAGO - Arthur Andersen & Co. will roll out in February a version of its new 401(k) asset allocation participant software package, the Retirement Expert, that runs under Microsoft Corp.'s Windows.
The program helps 401(k) plan participants with savings projections, asset allocation and retirement planning, using an interactive format. Participants can perform sophisticated what-if projections, based on account data obtained from a company's record keeper.
The Retirement Expert supports one unit of Arthur Andersen's modular multi-benefits program, Financial Insights. The program provides personal financial management to employees in self-directed plans. It also provides estate and tax planning guidance, insurance selection and debt management. Interactive software to support each module will be introduced throughout 1994.
Scudder sets telephone loans
BOSTON - Scudder Investor Services Inc. introduced Loans-by-Phone to its telephone voice-response system, Pilot, for 401(k) clients.
Participants can request new loans and check existing loan balances around the clock. Authorization forms are mailed to the participant by Scudder within three days of the request and returned to the plan administrator for final authorization.