CHICAGO - The Profit Sharing Council of America unveiled a 401(k) and profit-sharing public awareness campaign for 1995 at its 47th annual meeting in San Francisco late last month.
Citing an imbalance in general media reporting of 401(k) plan issues, PSCA President David L. Wray told association members the campaign will take an aggressive stance, actively promoting a positive image for defined contribution plan vehicles of all types.
"There is a very active element out there which is giving a strong message that profit-sharing and 401(k) plans are bad. Our aim is to try to provide a more balanced approach and to make available to the media our wide range of experience and expertise. Our member companies and plan sponsors may be our best spokesmen," said Mr. Wray.
The PSCA will sponsor a Gallup poll of 1,000 American workers next year and will base a new educational campaign on the results, targeting individuals, corporate management and local and national media in a grass-roots effort. The PSCA will try to clear up misconceptions and diffuse the negative messages some media channels are pushing, said Cathy Calhoun, a senior vice president at Bozell Public Relations, New York, which has been hired to develop and orchestrate the campaign.
A PSCA-sponsored "road show" for the campaign is planned for next year. Other ideas include a PSCA on-line database to give journalists access to the association's research data and legislative expertise.
A fund-raising campaign is planned for the end of this year to raise funds from PSCA member companies to finance next year's activities, said Mr. Wray.
PURCHASE, N.Y. - Contrary to common opinion, large defined contribution plan sponsors increasingly are moving toward bundled plan services, according to data from a new study conducted for Diversified Investment Advisors Inc.
More than 10,000 employee benefit managers were surveyed by Access Research Inc., Windsor, Conn., for the study, which found the number of large defined contribution plans (those with more than 1,000 participants) using a single vendor for plan services has increased to 38% in 1993 from 22% in 1989. Midsized plans drastically increased the use of bundled services to 62% in 1993 from 40% in 1989. The move toward bundled services also was dramatic among small plans, which increased single-vendor usage to 71% in 1993, from 62% in 1989.
About one-quarter of plan sponsors reported they were less than completely satisfied with the service they are receiving from their record keepers and 11% reported they are likely to switch vendors within the next 12 months.
With regard to participant communications, plan sponsors surveyed also reported they were least satisfied with the quality of basic investment education programs, followed by asset allocation training and advice. Sponsors were much happier with the communication provided by vendors to plan participants for more routine tasks, such as transfers among investment options and loan or withdrawal procedures.
WEST CONSHOHOCKEN, Pa. - Money manager Miller Anderson & Sherrerd announced the introduction of a bundled service for 401(k) plans, featuring record keeping, participant education and communication, asset allocation services, trust services, and investment management using the MAS family of mutual funds. The program will offer a choice of five equity funds, including international; six fixed-income funds, including a global fund; a cash reserve fund; a domestic and global balanced fund; and a stable value fund.
Record-keeping services will be provided by Delaware Charter Guarantee & Trust Co., Wilmington, or Benefits Services Corp., Altanta.
Fees for the bundled service will be less than 1% of assets for all services, said a spokeswoman for the company. The company manages about $1.15 billion in defined contribution plan assets.
SAN FRANCISCO - Gary D. Blank, president of Retirement Plan Consulting, predicts technology will revolutionize the ways defined contribution plan participants access their accounts in the very near future.
Speaking at the 47th annual meeting of the Profit Sharing Council of America, Mr. Blank predicted that within as little as 18 months, the use of voice-recognition systems will become widespread on automated telephone voice-response systems, making the use of personal identification numbers for account access obsolete. More advanced systems technology will store a "voice imprint" for each plan participant and will provide employee access to account information on the basis of voice recognition alone.
Access to retirement accounts through bank automated teller machines also is very close to being a reality, said Mr. Blank, giving employees very easy means to manage all of their financial affairs at a single outlet. ATM access to defined contribution plan accounts will become commonplace within just a few years, he predicts.
Before starting his new firm, Mr. Blank was a consultant with the Wyatt Co., based in San Francisco.
INDIANAPOLIS - A bundled service for government deferred compensation 457 plans has been introduced by American United Life Insurance Co.
The AUL American Series Plan is a full-service group annuity contract with one fixed interest account, which credits competitive rates of interest with a guarantee from AUL that the rate will not fall below 4%. Nine other variable investment options are broadly diversified, including active and passively managed domestic and international stocks, bonds, money market and balanced funds. The investment options are managed by AUL and Fidelity Investments, Boston.
The American Series Plan also offers administrative, record-keeping, telephone voice-response and participant investment education services for state and municipal 457 plans. The plan is benefit responsive, said a company spokesman, operating without sales charges and without back-end load fees should an employee retire, die, become disabled or terminate employment, unlike many other insurance company 457 plan programs. In-service withdrawals are permitted from the group annuity contract.
Separately, AUL added three mutual funds from Twentieth Century Investors, Kansas City, Mo., to its 401(k) plan program, bringing the number of available investment options up to 13. Added choices are the Twentieth Century Select Investors, Ultra Investors and the International Equity Funds. The other investment options in the 401(k) program are managed by AUL and FIdelity Investments, Boston.
A fourth mutual fund, the TCI Growth Fund, was added to AUL's 403(b) program.
AUL services 7,000 retirement plans, covering 300,000 participants.
NEW YORK - Scudder, Stevens & Clark Inc. introduced the Scudder Haven Plan for very small defined contribution plans - those with fewer than 100 employees.
The fully bundled program features investment management through more than 20 diversified Scudder mutual funds and multimedia participant education and communication provided by Scudder, including brochures, videos, a quarterly newsletter and a toll-free automated voice-response system. Daily valuation record-keeping and administrative services will be provided by Trust Consultants Inc., San Mateo, Calif. Scudder and Trust Consultants also will provide sponsors with PC-based software, Plan Manager, which automates the collection and transmission of plan data and daily reconciliation of plan information by the employer to the record keeper.
WASHINGTON - Marriott International is considering offering individualized employee financial planning for all employees, including participants in its $800 million defined contribution plan.
"We feel a need for people to look at their entire financial package for retirement," said Raymond Gaydos, manager of profit sharing.
Among other firms, Marriott is considering AYCO's "Money in Motion," Arthur Andersen, and T. Rowe Price's "Financial Planning Kit."