FAIRFIELD, Conn. -- General Electric Co. has added an international equity fund option to the six investments it offers participants in its $25.6 billion 401(k) plan.
GE, sponsor of the largest corporate defined contribution plan in Pensions & Investment's survey, also has launched a new investment education campaign called "Take Charge," said Peter Tosches, program manager for employee communications.
The international equity fund was included in the 401(k) plan in April. A mutual fund, it is actively managed by GE Investment Corp., Stamford, Conn.
The other investment options in the plan are all managed by GE Investment and represent a combination of mutual funds and unitized separate accounts. Those investment options are: GE stock; long-term fixed income; short-term fixed income; a mutual fund that tracks the Standard & Poor's 500 stock index; money market; and U.S. Savings Bonds.
"Based on feedback we've gotten so far, employees like the idea of having more options," Mr. Tosches said.
The most popular investment in GE's plan is its company stock option, which has attracted 73.2% of the plan assets. Another 11% is directed to the S&P 500 fund, 7.4% is in long term fixed income, 3.3% is in short term fixed income, 4.3% is in the money market option, 0.1% is in the international equity fund and 0.7% is in the U.S. Savings Bond option.
GE matches 50% of employee contributions in cash up to 7% of pay.
As of June 30 this year, the assets in GE's plan grew close to $4 billion from the year before.
"Performance of GE stock has driven returns," Mr. Tosches said.
"(Investing in the company stock option) is something employees have found for themselves. We don't encourage and we do not discourage it."
On June 30, GE stock closed at 113, up from a close of 90 7/8 a year earlier.
And the vast majority of GE's employees "appreciate" the plan, he said. The participation rate in GE's 401(k) plan is 85%. One of the reasons so many employees participate is the access to company stock, Mr. Tosches said. Other important factors are the performance of the investments, the range of investment choices and access to their money.
General Electric now is in a planning cycle that comes up every three years, he said. During this process, GE executives will review the investment options and features of the 401(k) plan and decide whether to "fine tune" the plan by adding further options, Mr. Tosches said.
GE executives' approach is to make sure employees are participating in the plan as wisely as they could be and are taking a long-term approach, he added.
However, a "critical part" of the education campaign GE launched last month is that the company will not give employees investment advice, Mr. Tosches said.
"One thing that we get from our employees is a lot of them want more information about what to do with their money," he said.
While GE executives are stopping short of telling participants where to invest their money, they are giving them extensive investment education both on the Internet and with handouts. Soon, GE executives will be taking their act on the road and conducting seminars, he added.
The new education campaign was developed after executives reviewed the results of an employee survey asking where they received their financial planning information.
"The responses were all over the lot," Mr. Tosches said.
Many employees relied on co-workers and friends for information, he said. But the survey also revealed employees believed that GE is a credible source of information, Mr. Tosches said.
"We thought it would be a good place to give basic information," he said.
And while company executives are discussing investment advice, Mr. Tosches said, "I can't say advice is where we want to go."
