NEW YORK -- Interpublic Group of Companies Inc. is in the home stretch of revamping its 401(k) plan.
Alan Forster, vice president and treasurer, said the $300 million fund has added two core fund options and three "pre-mixed" investment choices, and moved management of an existing fund outside -- all since February.
In July, it will offer an eighth option, self-directed brokerage. It is working out the details with State Street Bank & Trust Co., which will administer that option.
The most recent change in the Interpublic 401(k) plan was made May 1. Bankers Trust Co., New York, was picked to manage the $103 million stable value fund, formerly managed internally.
The other core options are: State Street Bank's Matrix fund, a large-cap domestic fund that uses a blend of growth and value stocks; State Street's Small Cap Fund, also a blend of growth and value stocks; and Templeton Foreign Fund. The small-cap fund and foreign fund are new.
Before all the changes were made, the plan offered the Matrix fund; a Frank Russell balanced fund, which was dropped; and the stable value fund.
The three "pre-mixed" options are combinations of the four individual fund choices, with differing asset allocations. They were designed by Interpublic's consultant, BARRA RogersCasey, Darien, Conn. The funds will be managed by Bankers Trust, which also is the plan's trustee.
The changes are part of an evolution of the defined contribution plan, said Mr. Forster, and are unrelated to the freezing of Interpublic's $115 million defined benefit plan March 31.
"We froze (the defined benefit plan) because we felt that was the best cost-containment strategy to use. At the same time, we have been enhancing the defined contribution plan," he said.
"We had our consultant RogersCasey sit in with us while we laid out what we wanted," Mr. Forster said. "We thought the four core options were easy to combine, and that different mixes of these made sense for different employees, depending upon where they are in their careers and what their investment goals are. They are a good idea for those (participants) who need help with asset allocation."
The three pre-mixed options have been structured on a sliding scale of risk:
Fund A uses 60% stable value, 35% large company stock fund and 5% international stock fund;
Fund B uses 40% stable value, 45% large company stock fund, 5% small company stock fund and 10% international stock fund; and
Fund C uses 20% stable value, 55% large company stock fund, 10% small company stock fund and 15% international stock fund. These funds have been well-received by employees, he said.
In conjunction with the re-vamped defined contribution plan, Interpublic is holding seminars for employees. The education plan is still evolving, according to Mr. Forster. Interpublic's record keeper, Howard Johnson & Co., New York, helped prepare the educational material.