Many public defined benefit plan trustees are elected officials or political appointees. And public defined benefit plans "are quick to make investment decisions and make social statements," notes Keith Hocter, investment consultant at Bellwether Consulting, Cedar Grove, N.J.
At American Airlines, on the other hand, "we are still trying to gather all the facts," Mr. Quinn said. "It's hard to just turn things off and move quickly when people are making payroll deductions and money is flowing into the funds.
"For defined contribution plans, it just takes longer. … We don't want to jump from one of these funds into XYZ fund and find out they have a problem too."
Mr. Hocter agreed, saying: "Corporations are a little more deliberate and don't want to bring in a new fund manager and find them next in the news." He noted that many DC plans have bundled providers, and it's more complicated and costly to make changes when all services flow through a single company.
Consultants say most plan sponsors are being cautious before switching investment options in their defined contribution plans, but a few are moving ahead. Among them:
-- DaimlerChrysler Corp., Auburn Hills, Mich., dropped the Putnam Vista and Putnam Voyager funds from its $4.2 billion 401(k) plan, according to spokeswoman Debra Nelson. She declined to disclose asset totals but said the assets from the two Putnam funds will be mapped into other funds.
c Wal-Mart Stores Inc., Bentonville, Ark., dropped as the Putnam International Growth and Putnam New Opportunities funds as investment options in its $1.5 billion 401(k) plan. Sharon Weber, Wal-Mart spokeswoman, said she did not know how much was invested in each fund nor whether a search would be conducted to replace the Putnam funds.
-- Revlon Inc., New York, will replace the Putnam International Equity Fund from its $135 million plan, according to a company spokeswoman.
-- Merck & Co., Whitehouse Station, N.J., dropped two Putnam funds from its $2.7 billion defined contribution plan. A Merck spokesman confirmed the move but would not elaborate.
-- Quadion Corp., Minneapolis, later this month will decide whether to take any action against Putnam, administrator and record keeper of its 401(k) and profit-sharing plans, said Pete Peterson, vice president-human resources. Officials at the plans, with a combined $60 million in assets, are taking a "wait-and-see" approach to the civil fraud charges filed against Putnam.
-- Menomonee Falls (Wis.) Medical Associates likely will seek a new bundled provider for its $40 million 401(k)/profit-sharing plan next year, said Bob Swanson, director of human resources. Strong is the incumbent.
c The Board of Pensions of the Evangelical Lutheran Church in America, Minneapolis, is evaluating AllianceBernstein, which runs a large-cap growth equities portfolio for the $4.1 billion 403(b) plan.
-- The New York State Deferred Compensation Plan, Albany, heightened its monitoring of the mutual fund firms that are under investigation whose funds are offered in the $5.9 billion plan, according to Julian Regan, executive director. Changes could be forthcoming, he said. Janus manages $402 million for the fund in the Janus Fund; Putnam manages $40 million in its International Equity Fund and $16.7 million in the George Putnam of Boston fund; and Strong Capital runs $11 million in the Strong Advisors Small-Cap Value Fund.