NEW YORK - Westinghouse Electric Co.'s $2.2 billion 401(k) plan may be frozen, but new parent Viacom Inc. still overhauled the investment options and changed record keepers.
The goal was to have Westinghouse's plan look like Viacom's $1.9 billion plan and offer a broader array of investment options, said Susan Duffy, a Viacom spokeswoman.
The number of options climbed to 15 from 11, but most of the old funds were eliminated.
What's more, retirees in the frozen plan were given the one-time option of transferring their defined benefit assets to the frozen 401(k).
Westinghouse's new record keeper is Mellon HR Solutions, Fort Lee, N.J. The previous record keeper, MetLife, New York, exited the large plan business.
In revamping the investment options, only four of Westinghouse's previous options remain: Janus Fund; Fidelity Growth and Income; a fixed-income fund managed internally by Viacom; and company stock.
At year-end 2001, the fixed-income fund was the most popular, with $1.7 billion in assets. Second was company stock, with $160 million, followed by the Fidelity Growth and Income, with $97 million.
New options
New options are an bond index fund from Mellon; four Vanguard LifeStrategy funds; the Deutsche Asset Management Pyramid Equity Index Fund; a large-cap value fund managed by The Boston Co.; Putnam's large-cap growth fund; a Fidelity midcap stock fund; the DFA U.S. Small Cap Fund; and Capital Guardian International Equity Fund.
Dumped from the investment menu were American Century Ultra; Deutsche's Equity Index Fund and three lifecycle funds; J.P. Morgan Institutional Diversified Fund; and J.P. Morgan Fleming International Value Equity Fund.
Westinghouse's new set of investment options is similar to that of the Viacom plan. And Viacom hired Mellon, Westinghouse's new record keeper, for the same role last year. Putnam Investments, Boston, had been Viacom's record keeper.
Mellon customized the plan to Viacom's specifications when it took on the Viacom plan last year, and the same customized services are being provided to Westinghouse participants, said Julia McCarthy, vice president of Mellon HR Solutions. Among them is Viacom's first participant website.
Some of these new bells and whistles developed for Viacom's plans will be marketed to Mellon's other defined contribution plan sponsors, she said.
One of the challenges of the Westinghouse plan has been to effectively communicate such extensive plan changes to a group of people who no longer work at the company and are now sprinkled all over the country, Ms. Duffy said.
Mellon provided telephone conferences, she said, in which executives from the plan and from Mellon went over the batch of written materials participants had received. The goal was to make it similar to an in-person meeting.
"We took a creative approach to the communication and education," Ms. McCarthy said. "We developed a whole new look and feel for Westinghouse that included a clean, concise brochure."
Call volumes were very manageable; more than 50% of participants used the Web, Ms. McCarthy said.
"Viacom took the same level of communication and concern as it did with its active plan," Ms. McCarthy said.
