Employee communications publisher RAI, a division of Hearst Business Communications Inc., Garden City, N.Y. is introducing a second quarterly newsletter, Financial Dimensions, specifically designed for participants in non-401(k) defined contribution plans, such as profit-sharing or 403(b) plans, in addition to its first DC newsletter, 401(k) Dimensions.
"There was a lot of interest expressed in the first newsletter from sponsors of self-directed, tax deferred plans that aren't 401(k) plans. They want to provide the same kind of objective, educational newsletter for their participants and needed a newsletter which covered other plan designs," said Susan M. Barbey, associate publisher.
The four-page newsletters focus on investment education and retirement planning issues, said Ms. Barbey. The newsletters can be customized through the inclusion of an insert with specific plan information for a particular company or vendor, and some vendors can customize the editorial content to reflect their own product offerings, said Ms. Barbey.
The National Association of College and University Business Officers is about to publish a book for universities written by Lee Morrell, vice president for business and finance and treasurer of Rollins College, Winter Park, Fla.
Retirement Plan Alternatives: The Role of the Business Officer provides analysis of retirement issues as they affect university pension programs. It also explains the role of the pension administrator and provides tools for the evaluation of plan alternatives, including alternatives to the 403(b) plan program of the Teachers Insurance and Annuity Association - College Retirement Equities Fund.
The book also contains a section on employee investment education, including worksheets and self-evaluation forms that can be distributed directly to participants.
Mr. Morrell said he wrote the book to help other NACUBO members break through the complexity of retirement plan management and show college business officers the variety of choices they have in designing their 403(b) plans.
Milliman & Robertson, Brookfield, Wis., has developed the Communicator software package to help employee and employers project and plan retirement benefits.
The MARC software package uses what-if scenarios to guide employees through financial planning and includes a database of participant account information, eliminating the need for the participant to add data to perform modeling functions. The MARC database includes defined contribution, defined benefit, social security, personal savings and spousal benefit information to integrate all aspects of retirement planning into a single model.
The software is a stand-alone product, which Milliman & Robertson is marketing directly to plan sponsors. Some sponsors restrict use of the MARC database to human resources staff while others set up kiosks so employees can perform their own analyses, said Lee Straate, an M&R consulting actuary.
The database is created from information culled from the sponsor or the sponsor's record keeper and is updated regularly. Because MARC is designed for long-term participant planning, daily valued account balance information isn't really needed to project future savings, said Mr. Straate. He said the five clients using the product now tend to select quarterly database updates. He declined to name the clients.
The average installation fee is about $3,000 (depending on plan complexity) and average yearly usage charges also is about $3,000.
In pursuit of better participant education, the International Foundation of Employee Benefit Plans, Brookfield, Wis., is distributing a new book, Selecting Investments for Your Retirement Account, written by Richard D. Glass, a registered investment adviser.
The book uses a question-and-answer format to address basic investment and retirement planning issues, as well as hypothetical case studies. Worksheets guide participants in applying investment tactics to their individual circumstances.
Prudential Defined Contribution Services, Moosic, Pa., hired Acumen Financial Inc., Cambridge, Mass., to develop a personal financial planning guide for Prudential's 1,500 clients, with more than 300,000 plan participants.
The guide can be customized to reflect the individual features used by each company plan sponsor and Prudential investment vehicles.
Chicago-based Persistence of Vision Inc., an employee benefit communications consultant, has developed an interactive participant investment education software package. The Personal Smart Money Machine guides 401(k) plan participants through basic investment theory and asset allocation. Modeling functions allow employees to perform what-if calculations and to make savings projections.
The package can be customized to reflect an employer's plan features and investment options and is designed to be used by plans with as few as 10 employees.
Morningstar Inc. and Business Week magazine have combined forces with Avenue Technologies to provide a mutual fund profile service designed for 401(k) plan participants and retail investors.
Avenue Technologies will electronically create reports on nearly 4,000 open-ended U.S. mutual funds, incorporating Business Week's fund ratings and most recent data with commentary from Morningstar. Each six-page report costs $9.95 and details historical performance, portfolio holdings, management objectives and risk analysis. Individual investors can order the reports by telephone on a fund-by-fund basis.
One of the world's largest providers of defined contribution plan services with $128 billion under management, the Teachers Insurance and Annuity Association - College Retirement Equities Fund, New York, expressed caution about proposed federal mandates that would specify detailed requirements for investment education programs for use in 401(k) plans.
Testifying June 23 before the U.S. Department of Labor's ERISA Advisory Council, which is evaluating investment and educational aspects of defined contribution pensions, John J. McCormack, executive vice president at TIAA-CREF, said retirement education efforts ought to be custom-tailored to the meet the needs of participants in defined contribution plans.
Federal mandates on defined contribution plan education would be expensive and inflexible, said Mr. McCormack, and "will result in addressing the needs of the average participant without allowing for the needs of a specific group."
The Vanguard Group of Investment Cos., Valley Forge, Pa., is introducing a series of life cycle-style portfolios designed primarily for institutional investors within the STAR Fund Family.
The four new portfolios will mimic the structure of the original STAR Fund, which was founded in 1986 and invests in shares of other Vanguard mutual funds in diverse asset classes to create a flexible asset allocation fund. The STAR Fund is the most aggressive of the portfolios, with the new funds spanning a broad range of risk tolerance.
John Werth, a Vanguard spokesman, said the Securities and Exchange Commission is reviewing the new funds, which likely will be rolled out later this summer.
Scudder, Stevens & Clark Inc., New York, added a new Growth and Income Portfolio investment option to its no-load variable annuity program, Horizon.
Robert T. Hoffman will head the investment team for the global portfolio.
Kathleen Millard and Benjamin W. Thorndike, both Scudder portfolio managers, will make up the rest of the growth and income investment team.
The new portfolio brings the total number of actively managed investment options in the Horizon variable annuity program to six. Two guaranteed fixed-rate accounts also are included in the program.
The variable annuity program is available to both institutional and retail investors.
