LINCOLNSHIRE, Ill. - Hewitt Associates L.L.C. terminated relationships with "a handful of midsized clients," said spokeswoman Monica Gallagher. The clients "no longer a good fit" with Hewitt's record-keeping system, she said.
Hewitt will be concentrating on customized record keeping for large clients and standardized, turnkey plans for small clients. The medium-sized companies, which Ms. Gallagher would not identify, apparently required too many customized services.
Ms. Gallagher said Hewitt offered consulting and vendor search services to the terminated clients and helped with transition to new service arrangements.
SAN FRANCISCO - Charles Schwab & Co. acquired The Hampton Co., Akron, Ohio, a defined benefit and defined contribution plan consultant, and expects to expand the firm as Schwab develops its own bundled 401(k) product.
Terms were not disclosed.
Hampton, which has 85 employees, has 550 pension plan clients nationwide. A key product is a turnkey daily valuation program for 401(k) plans, which includes investment portfolios managed by other firms through Schwab, and record-keeping and education services.
BOSTON - Fidelity Investments established an additional site on the World Wide Web to give Internet users access to its Workplace Savings education program. The program provides defined contribution plan participants online access to a variety of investment education tools, reference materials, mutual fund industry information and financial planning tools. Information about Fidelity's retail mutual funds has been available on the Internet since early this year.
Participants can complete worksheets online that will help them to determine their own risk tolerance and to model optimal portfolios. Fidelity initially offered the interactive investment education program only on America Online in June. A World Wide Web site can be reached from a wide range of commercial online services, as well as directly through the Internet. The Internet address for Workplace Savings is http: www.fidelityatwork.com.
The Workplace Savings site now has a new feature, especially for plan sponsors under the Plan Sponsor Services icon. Information about Fidelity's record-keeping and investment management services are available to benefits administrators connected to the Internet.
LAFAYETTE, Calif. - A new index of 401(k) plan vendor charges found bundled service costs for a small plan can vary by as much as $23,000 per year.
Consultants Pension Dynamics Corp. compared what vendors typically charge a hypothetical 401(k) plan with $1 million in assets and 50 employees for basic, services, including investment management within a single family of funds, trust, administration, compliance and record-keeping services.
The Butler Index, devised by Stephen J. Butler, the firm's president, found Principal Financial Group, Des Moines, Iowa, was the lowest cost provider of the 11 vendors studied, with annual fees and expenses of $9,497. Great-West Life & Annuity, Englewood, Colo., was the most expensive, with annual charges of $32,796. The average annual total of charges was $18,912.
As part of its effort to help plan sponsors get an accurate comparison of plan costs, Pension Dynamics is developing a PC-based software package for introduction early next year. The program will enable plan sponsors to prepare a cost comparison worksheet using the particular variables of their own plans. Mr. Butler said the new program will include 20 major vendors.
Using the program, sponsors will be able to compare the precise costs of the service features they use now or want to add for all vendors in the data base. The software will calculate both employer cost and per-employee costs, as well as the opportunity costs of poor investment performance.
NEW YORK - Dreyfus Retirement Services has been busy bolstering its 401(k) plan offerings in its first year.
Dreyfus has just struck a strategic partnership with Ayco Co. L.P., Albany, N.Y., to provide financial planning advice to plan participants whose sponsors choose to offer the service. Robert Stone, a Dreyfus executive vice president, said the delivery system for individual investment advice will vary by plan sponsor, but will combine telephone representatives and employee group investment seminars.
Ayco will use a questionnaire to assess a participant's risk tolerance and will provide investment advice accordingly, right down to the specific funds and allocations a participant should make to meet his or her investment objectives. Ayco representatives will be free to recommend investment in funds outside those managed by Dreyfus and its parent company Mellon Bank Corp. and sister company, the Boston Co., if permissible under a particular plan's investment guidelines.
Mr. Stone said several plans have said they want to use the service, but he did not identify them.
Three asset allocation funds, the LifeTime Portfolios, also have just been added to the company's 401(k) plan offerings. The three funds are jointly managed by Dreyfus and Mellon Equity Associates and are designed to match the risk tolerance of conservative, moderate or aggressive investors.
HARTFORD, Conn. - Confidence about retirement replacement income drops sharply among older Americans, according to a new survey by Aetna Retirement Services.
More than two-thirds (69%) of people between the ages of 25 and 44 said they expect to be able to retire completely from work at the traditional age of 65. That confidence eroded to 63% of respondents between 45 and 54, and dropped to less than half (49%) among adults older than 55.
More than 80% of the 500 people surveyed said they have concerns about their retirement years, mostly in the area of personal finances. About three-quarters (78%) said they have taken steps to address their concerns and 43% of those said they are participating in employer-sponsored retirement plans. Despite that participation, only 7% said they are invested in stocks, bonds or mutual funds, suggesting an over reliance on more conservative investment options.
Less than 6% of all women in the survey said they are invested in any stocks, bonds or mutual funds, compared with 9% of men.
It does appear that some employees do value highly the retirement plans offered by their companies. About one-third (36%) named employer-sponsored plans as the single most important source if retirement income; 13% named Social Security.
NEW YORK - Scudder Funds introduced a new Retirement Builder software program for retail investors, which includes specific asset allocation advice and mutual fund suggestions to match. The tool is available for use for private retirement savings plans at a cost of $15 per diskette, plus shipping.
A software-based retirement planning tool designed for use by participants in qualified retirement plans is planned for introduction next year, said Mary Ellen Wiedenbeck, a spokeswoman for the company.
The institutional software program will not include the investment advice module included in the retail version of the program.
BOSTON - Acumen Financial, Boston, a defined contribution plan consultant, added two services for sponsors to make managing participant information easier.
AcuFact analyzes participant data from a plan's record-keeping data base and categorizes employees into participation bands - employees who are undercontributing, underinvesting or using the plan optimally. The information can be used to help sponsors design targeted communications.
Flash-Financial is a one-page personalized message that highlights a problem the participant may have with features of a 401(k) plan. For example, the consequences of undercontributing are modeled under the current contribution pattern. Alternative scenarios that correct the problem are illustrated using specific information about the employee's account.
Flash-Financial can be run from AcuFact or as a separate service. Both programs are priced on a per-participant basis.