The Scarborough Group signed an agreement with Ibbotson Associates to provide investment advice and asset allocation modeling to 401(k) plan participants. Scarborough already provides investment management to participants, but participants must pay for the service. The agreement with Ibbotson will allow employers to offer "managed accounts to participants and pay for the service with plan assets, said J. Michael Scarborough, president. Scarborough initially will provide Ibbotsons advice and asset allocation services to 73 defined contribution plans Scarborough manages.
The agreement is modeled after guidance issued last month by the Labor Department to SunAmerica Retirement Markets, which permits plan sponsors to automatically direct participant money into the managed accounts unless they opt out and use plan assets to pay for the one-stop investment management service.