COLUMBUS, Ohio - The Ohio Department of Insurance has begun approving vendors for an alternative defined contribution plan for employees at publicly funded universities, colleges and community colleges.
A bill passed last year by the Legislature mandated establishment of such a plan.
The law requires the Department of Insurance to approve at least three vendors to provide investment management, record keeping and administration. Kip May, deputy director of the insurance division, said as many as six could be chosen by the end of the year.
"This is new territory for us," Mr. May said.
"We are good with questions of insolvency and broad questions of insurance, but we've been given more authority on this matter than we wanted by the Legislature," he added.
Most university faculty participate in the State Teachers' Retirement System of Ohio; higher administrative staff is covered by the Public Employees' Retirement System of Ohio. Eligible employees will be able to remain in the current defined benefit plan or opt out into the new plan.
KeyCorp launches Victory
CLEVELAND - KeyCorp has joined a long list of service providers in introducing a bundled 401(k) package for small businesses.
The Victory 401(k) from KeyCorp is a turnkey, daily valuation program designed to provide businesses with less than 100 employees and $1 million in assets with a full package of services usually available to large plans.
The Victory 401(k) provides tailored communications and education, enrollment, record keeping, reporting and investment management. Plans can select from eight proprietary mutual funds and four external funds from Aim Management and Putnam Investments.
The KeyChoice lifestyle funds also are available.
Web site targets sponsors
BOSTON - Scudder Defined Contribution Services has launched a Web site to provide information about Scudder's retirement plan capabilities to consultants and potential clients.
The site provides an overview of Scudder's defined contribution programs and services as well as information regarding investment options, according to Michele A. Corkery, product development manager at Scudder.
The Web site - found at www.dcs.scudder.com - contains an e-mail contact and a link to Scudder's retail site.
Participants seek more
BOSTON - Defined contribution plan participants with large account balances are not satisfied with the number of investment options available in their company-sponsored plans, according to results of an on-line survey by DALBAR Inc.
The survey also found more than half of the 1,143 respondents want restrictions on their plans removed, especially those that limit the timing and frequency they are allowed to make changes to their portfolios.
More than 45% said they wanted more investment options, especially international funds. Just more than 27% expressed a need for more investment education and 22.9% expressed the need for personal investment advice.
The average value of the respondent account was $191,000, nearly five times the national average.
Funds focus on style drift
NEW ORLEANS - Pan-American Retirement & Investment Services has come up with a process to analyze mutual fund style and performance to keep track of fund investment style drift.
The Pan-American mutual fund selection and monitoring process for 401(k) plans is used to evaluate, analyze and revamp the fund lineup it offers to defined contribution plans.
"We looked at the entire mutual fund universe and established partnerships with funds that met our criteria for performance, risk and style adherence," said Pat Lombard, vice president of pension operations.
"We selected funds and found managers that have historically remained true to their style and have performed well when compared with their peers and relevant benchmarks."
1997 directory released
BALTIMORE - HR Investment Consultants has released the fifth edition of its 401(k) Provider Directory.
The directory contains detailed information about fee and services of 122 leading 401(k) vendors. In addition, the directory includes information about record-keeping, investment and communications services of major providers.
New features in the 1997 edition include enhanced investment alliances, outsourcing capabilities, Internet services and a geographical cross-reference.
An on-line version of the directory is also available at www.401(k)search.com.
Putnam unveils newsletter
BOSTON - Putnam Investments introduced a new defined contribution participant newsletter in conjunction with the publisher of Time Magazine.
The newsletter - SAVE - offers Putnam's client plans' participants access to Time's resources of personal savings, retirement and investment education materials.
The newsletter draws materials and articles from Time Inc. publications such as Time-Life Books, Fortune and Money Magazine.
Christine Williamson also contributed to this column.