Trust Fund Advisors Inc., Washington, is hoping union workers will be able to find their union label on a multiemployer defined contribution plan it is introducing for the Taft-Hartley market.
The new plan is being provided through a strategic alliance formed by TFA, Nicholas-Applegate Capital Management, San Diego, and CNA Trust, Costa Mesa, Calif.
Company executives like the new plan design so much that ULLICO Inc., the parent of TFA, on June 1 switched its $550 million 401(k) plan to this defined contribution plan design, said Cathy Humphrey, assistant vice president of investment services marketing. The new options are an international core growth fund, a large-cap fund, a value fund, a small-cap fund and a bond portfolio, all managed by Nicholas-Applegate. Pension executives also are adding Federated's Capital Preservation Fund for a guaranteed investment contract option, she said.
Under the old plan TFA managed a mortgage account; Brandywine Asset Management, Wilmington, Del., ran a value fund; Thomson, Horstmann and Bryant Inc., Kansas City, Mo., managed a small-cap fund; Smith, Breeden Associates Inc ran a bond fund; and Nicholas-Applegate managed a large-cap growth fund. The former record keeper was Aon Corp., Chicago; the 401(k) plan was administered internally.
This plan is designed as a supplemental savings plan for union workers, explained Ms. Humphrey.
Under the plan design, the trustee would administer the plan and select the plan provider, Ms. Humphrey said. Because it is a supplemental plan, employers are not likely to be providing a matching contribution, she said. But unlike supplemental annuity plans now available to union members in multiemployer plans, participants will be able to direct their investments, she added.
"As baby boomers are getting older they want more savings vehicles, and they want control," Ms. Humphrey said.
Unveiled June 1 as the Nicholas-Applegate Defined Contribution Program, the plan design includes CNA as plan administrator and record keeper and Nicholas-Applegate for most of the investment options and the education programs.
The turnkey design includes a menu of eight investment options: the Federated Capital Preservation Fund, a stable value fund; and seven funds provided by Nicholas-Applegate funds: international core growth, emerging countries fund, large-cap growth, midcap growth, value fund, small-cap growth and high-quality bonds fund.