Black & Decker Corp., Towson, Md., hired T. Rowe Price Associates to provide bundled services to its $325 million 401(k) plan under a novel performance approach. B&D will give T. Rowe incentive payments for boosting participation rates and improving asset allocation diversification, said Ray Brusca, Black & Decker vice president-benefits.
In turn, T. Rowe Price faces disincentives, and having to make penalty payments to Black & Decker, if participation rates fall or asset allocation becomes more concentrated in more conservative investment options.
The company created the incentives to spur the performance of the educational program. Some 57%, or 10,000 of its employees, now participate in the 401(k) and of those, on average, 70% of their assets are in a guaranteed fixed-income fund.
Effective April 1, T. Rowe Price will provide fully bundled services for the plan, including record keeping and eight investment options.
The new structure will replace State Street Global Investors, the incumbent record keeper, which also manages two of the plan's three current investment options. T. Rowe already manages the third.