Searches for defined contribution plan providers are up 35% from the levels of 2002 and 2001, the result of fiduciary worries in the aftermath of the mutual fund trading scandal as well as plan assets swelling in the bull market.
"We saw well over a 30% to 35% increase in 2003 in RFPs for record keepers and bundled providers, and we expect it to keep up in 2004," said Bob Francis, head of work site distribution at ING US Financial Services, Hartford, Conn.
Defined contribution plans that have issued requests for proposals or are beginning to do searches for record keepers or bundled providers include:
-- The State of Washington Department of Retirement Systems, Olympia, which is seeking a consultant to assist in a record keeper search for the state's $4.5 billion in deferred compensation and combined defined contribution/defined benefit plans;
-- Michael Baker Corp., Coraopolis, Pa., which issued an RFP for a bundled provider for its $110 million 401(k) plan. Wendy Grindell, qualified plan specialist, said incumbent Putnam Investments may rebid. She said the search is being done for "benchmarking" purposes, and was launched before Putnam's mutual fund trading problems became known.
-- Selectron Corp., Milpitas, Calif., will use an RFP to find a bundled provider for its $250 million 401(k) plan;
-- North Dakota Deferred Compensation Fund, Bismarck, has issued an RFP for a record keeper for its $83 million plan; and
-- Jo-Ann Stores Inc., Hudson, Ohio, has issued an RFP for a new bundled provider for its $52 million 401(k) plan because "we haven't taken the contract out to bid in five years," said Tom Williams, vice president of human resources. Also, he said, plan officials are disappointed in the performance of the mutual funds from its current bundled provider AMVESCAP PLC, Atlanta.