Kentucky Deferred Compensation System, Frankfort, this month dropped the INVESCO Small Company Growth, Janus Worldwide, Putnam International Equity and Fidelity Magellan funds as investment options in its 401(k) and 457 plans, with a combined $1 billion in assets, said Robert Brown, executive director. The INVESCO, Janus and Fidelity funds were terminated for performance; the Putnam fund was dropped because of market-timing allegations against the firm. Mr. Brown said the funds will not be replaced.
Fidelity spokeswoman Sophie Launay said the Magellan fund's performance beat 65% of its large-cap core fund peers for the 10-year period ended June 30. Blair Johnson, Janus spokesman, said Janus is "always sorry to lose any client, but we are working hard to regain investors' confidence." Bill Hensel, spokesman for INVESCO parent AMVESCAP, declined to comment; and Sinead Martin, Putnam spokeswoman, didn't comment on the matter by press time.
Separately, the system will search separately in late October for record-keeping, investment consulting and marketing/communications services for its 401(k) and 457 plans, Mr. Brown said. The contract of Nationwide Retirement Solutions, which handled those duties, expires June 30, 2005; the firm can rebid. The system will most likely finalize new contracts by a February board meeting.
The plans, which mirror each other, offer 32 investment options each.