Putnam Investments today launched a new defined contribution platform that will include the services of record keeper FASCore to provide 401(k) plans with low-cost, state-of-the-art bundled services programs, said Jeffrey R. Carney, Putnams head of global marketing and products.
The cost advantages of FASCores technology will allow Putnam to compete for bigger retirement plan clients such as those plans with more than $50 million in assets an area of the market where margins are thinner. New Putnam funds, including its suite of absolute-return and target-date funds, will further enhance its offerings, Mr. Carney said.
Putnam currently handles about $13 billion in DC client assets on its existing bundled platform.
Putnams existing bundled service uses record-keeping services from Mercer, which had been an affiliate under Putnams previous parent, Marsh & McLennan, until that firm sold the money management firm to Power Financial in August 2007. FASCore is a subsidiary of Great-West Lifeco Inc., which is also owned by Power Financial.
Separately today, Mercer announced it is expanding its comprehensive defined contribution administration services to clients with 500 employees or more, and will hire six employees next week to handle the new business, according to Eric Levy, head of retirement services for Mercers outsourcing business.
Existing business will continue to be managed jointly between Mercer and Putnam for companies. Those existing plans include about 500 clients, 500,000 participants and about $12.5 billion in assets under administration, said Mercer spokesman Bruce Lee.
The expansion is a result of growing marketplace demand for competitive and cost-effective retirement plan administration during these unprecedented economic times; the increasingly demanding and complex fiduciary and regulatory environment; and the desire from plan sponsors for investment independence and complete fee transparency, according to a news release.
The six new employees will include sales team members, an advisor relations manager and relationship management support staff. Mr. Levy said he expects further expansion of the new team going forward.