Providing total benefits outsourcing to midsized companies will be one of the early priorities of the proposed joint venture between State Street Bank & Trust Co., Boston, and Watson Wyatt Worldwide, Washington.
James Phalen, managing director at State Street, said demand for total benefits outsourcing - which provides information on all of a company's employee benefit programs via a single voice response system - is just as great from midsized companies as from large ones.
Watson Wyatt's revenues from TBO will total $50 million this year, four years after the company first began offering the technologically complex services.
State Street and Watson Wyatt have signed a letter of intent to form a joint venture partnership to provide the services. The TBO practice will operate from Watson Wyatt's Jacksonville, Fla., technology and customer service center. The deal is expected to close early this year.
The joint venture probably will introduce the middle-market service during the first quarter of next year.
Some of Watson Wyatt's larger TBO clients now include Westinghouse Electric Corp., Pittsburgh; Rockwell International Corp., Pittsburgh; and NYNEX Corp., New York.
As part of the deal, State Street is acquiring Watson Wyatt's daily valued defined contribution plan service center in Minneapolis, including 130 employees, systems, offices and clients. State Street will license Watson Wyatt's record keeping software system, WYSTAR.