Staples Inc., Framingham, Mass., hired NYL Benefit Services Co., Norwood, Mass., to provide bundled services for its $25 million 401(k) plan.
Seven diversified investment options are included in the fund lineup. Three funds are managed by NYL's parent company, New York Life Insurance Co., Parsippany, N.J.; the other four are managed by various managers. A company stock option is administered by NYL.
NYL is providing daily valued record keeping, trust, compliance and administrative services, as well as employee communications and investment education.
Staples is the first sponsor to test NYL's new Client Access product - a private network that delivers real-time plan and participant level data to Staples' in-house benefits staff. Installation of the new workstations will begin this year.
The Staples plan is expected to grow beyond $100 million by 1998, due to the company's rapid growth. Some 120 new office supply stores will be opened in 1996 alone, said Reg Butts, director of corporate human relations. The company outsourced many plan functions because of the explosive growth of the employee population.
"I can't overemphasize the difficulty in dealing with such fast growth. The simplest things become so complicated - like how to get statements out and how to enroll lots of brand new associates efficiently. We needed a vendor to step in for us," Mr. Butts said.
Staples had used quarterly valued record-keeping services from ADQ Inc., Waltham, Mass., which was purchased by New York Life in 1994. A search last summer included NYL Benefit Services, the combined ADQ-New York Life DC plan service unit, as well as many other vendors, Mr. Butts said.
Three investment options were offered under the old plan design: an internally managed GIC pooled fund; the Janus Fund; and Vanguard Wellington. Company stock also was offered.