YOU HAVE FOUND OUR OLD WEB SITE. BE SURE TO CHECK OUT OUR NEW AND IMPROVED SITE!       September 17, 2004 Virginia County School District Picks Providers For 457, 403(b) Plans The Fairfax County (Va.) Public School System ihas chosen seven providers for its 403(b) plan, which totals about $100 million in assets and 8,000 participants, and a newly established 457 plan. A source familiar with the plans said the seven chosen for the 403(b) are ABC Financial Center, AIG VALIC, CitiStreet, Financial Directors, Horace Mann, ING Financial Advisors and Lincoln Financial Group. For the 457 plan the District chose Great-West Retirement Services.   The source said Great-West beat out finalists AIG VALIC for the 457 plan. Among the criteria for selection were implementation and recordkeeping, trust and custodial services, investment flexibility and fees. The source declined to be specific about how Great-West stood out. Mercer Investment Consulting assisted in the search.   The school system changed providers for the 403(b) plan because the contracts with the original 11 vendors had expired and the school system is required by law to send out a request for proposals for new ones. The criteria for the 403(b) providers were similar to those used to decide on a 457 vendor. However, they also included the ability to provide annuity options. In addition to investment management, the new providers are expected to offer participant education and communications, including a Web site where participants can ask questions and look up general information about 403(b) plans.   All of the incumbent providers, which included Metlife Resources and American Express Financial Advisors, had been invited to re-bid. The source declined to say why the losing firms were not chosen. An outside consultant did not assist with the search. [Defined Contribution News]   August 17, 2004 Boston Water, Sewer Commission Seeks 457 Plan Provider The Boston Water and Sewer Commission is searching for a $6.3 million 457 plan provider as a matter of regular review. Jeanne Richardson, director of communications, said Prudential Retirement has been its bundled provider for the past five years. While plan policy prompted the search, the sponsor is looking for more flexibility in its investment lineup, she said. Darrell Oliver, a Prudential spokesman, declined to comment. The sponsor is seeking to add lifestyle funds to its roster, in addition to real estate, mid-cap value and growth, small-cap value and growth, and emerging market options. The plan also wants to boost its 22% participation rate, she said, adding that it has 529 eligible employees. RFPs were due back on Aug. 6. The goal is to have a provider in place in January, said Richardson, but she could not comment on the likelihood of the incumbent winning the bid at this stage. She added that Southborough, Mass.-based PFE Group is assisting in the search.   Kent Scrivener, senior consultant, said the firm sent out RFPs to 11 providers, including Nationwide Retirement Solutions, Great-West Retirement Services, ING, ICMA-RC, CitiStreet and The Hartford. The winning firm should be selected in September, he said, with the new contract likely to begin on Dec. 1. [Defined Contribution News]   CitiStreet To Give Advice In Lone Star State The Employees Retirement System of Texas has tapped CitiStreet Advisors to provide advice for its 401(k) and 457 plans, a new benefit for participants. Mary Jane Wardlow, agency spokeswoman, said the sponsor wanted to afford participants specific investment recommendations since industry regulators gave retirement plan sponsors the go-ahead a few years ago. The $949 million Texa$aver defined contribution program will have access to advice online as well as through personalized statements and CitiStreet's financial advisors. Wardlow said CitiStreet, which is the plan's recordkeeper, was the only firm to meet all the criteria of the RFP, to which Financial Engines and Morningstar Associates also responded. For example, Morningstar did not respond to its request for an annual fee, she said.   John Rekenthaler, president, Morningstar Associates, said the firm did not give the sponsor as much detail as it would have liked because of the way the RFP was structured. The state of Texas said that it considered proposals returned by bidders as a signed contract, which is unusual, he said. Without sufficient knowledge of the plan and its investments, and without the opportunity for discussion, the advice provider did not feel that it could commit to a firm price.   Larry Raffone, executive v.p. of sales and client services at Financial Engines, said as CitiStreet's subadvisor, it would rather support than compete with the firm. Once Morningstar was eliminated, Financial Engines saw that it was a winning situation either way. Ray Martin, president of CitiStreet Advisors, said the sponsor's selection of CitiStreet is a validation that the firm's experience in delivering advice, which coupled with Financial Engines' technology is a winning combination. [Defined Contribution News]   Diversified Upgrades Marketing Campaign Diversified Investment Advisors has revamped its marketing materials to reflect an increased focus on the expertise of the firm's personnel. The previous marketing campaign was more product-specific, said Joe Masterson, v.p. of sales for the Purchase, N.Y.-based bundled provider. The firm decided to make the changes after a client survey revealed that plan sponsors do business with the firm primarily because of the skills and knowledge of its employees. "People buy from us for our talented personnel," Masterson said. "We're the approachable experts."   The print materials will also feature more colorful, eye-catching graphics, he said. The marketing campaign overhaul will encompass all of the firm's marketing materials, including print ads and brochures. Diversified offers bundled plan services for both defined benefit plans and defined contribution plans, including 401(k), 403(b), 457, profit sharing and money purchase plans. [Defined Contribution News]   June 27, 2004 Firms Gear Up For Public Sector TRS Push MassMutual and Prudential Financial are gearing up for a push into the public sector market to offer total retirement services, with an eye toward offering health savings accounts as part of the package. Only a handful of firms currently offer total retirement services — which is a growing trend in the corporate market, but only beginning to catch on among government plans. Indeed, industry officials are saying that to secure a long term place in the retirement market firms should position themselves to provide such a service. MassMutual's move is marked by the recent hiring of Matt Abraham to fill the newly created position of national sales director of public markets to step up its total retirement services focus in the government, hospital and non-profit sectors. Abraham, who is based in Houston, said he is likely to beef up the firm's sales team by hiring people based in their respective jurisdictions, but could not elaborate on how MassMutual might more aggressively penetrate the public market. "The plan is still being outlined as we speak," he said. He added that there is a good growth rate for 457 and 403(b) plans, while defined benefit plans in the public sector do not switch to DC programs as quickly as in the corporate arena. The combined factors mean greater business opportunities for plan providers.   Abraham said he will also help MassMutual explore the possibility of offering Healthcare Savings Accounts as part of its product line. At the recent SPARK conference in Naples, Fla., industry leaders said the future of the retirement industry will be defined by bundled providers, and to survive firms should offer total retirement outsourcing, and consider including HSAs as part of their offerings (DCN, 5/31).   Prudential beefed up its total retirement services capabilities, specifically in the government markets, with the purchase of CIGNA Retirement & Investment Services in April. "$2.1 billion is a pretty big thing," said Jamie Kalamarides, senior v.p., tax-exempt markets at Prudential, of the firm's investment and recommitment to total retirement services. The deal afforded Prudential a strong book of business in DB administrative outsourcing, in particular, he said. While the bundling of DB and DC plans has developed into a hot trend in the corporate sector, it has been slower to reach the public sector, where the effects of the capital markets were delayed for plan sponsors, Kalamarides said. Similar to MassMutual, Prudential is looking broadly at HSAs, expecting that sponsors will desire the tax-deferred savings accounts as part of a total benefits outsourcing package.   Randy Taylor, senior v.p., governmental markets at CitiStreet, said that a couple of its large plan sponsors are exploring the possibility of bundling their DB and DC plans. "We are well positioned if that becomes an important need [in the public market]," he said, thanks to its total benefits outsourcing business in Jacksonville, Fla. Regarding health savings accounts, he said that there has been enough interest among its current and prospect customers to prompt CitiStreet to look at what offering them might mean to the firm internally.   At the start of this month, Fidelity Employer Services realigned its business to create the Fidelity Human Resources Services Company — which will service DB, DC, payroll and health and welfare solutions for large firms — and separately set up a team dedicated solely to retirement plans. The move, which was prompted by an increasing demand among employers for a total human resource and benefits outsourcing solution, will make it easier for public and corporate market clients to access the firm for service, said Jennifer Engle, spokeswoman. She added that Fidelity plans on offering HSAs next fall, likely as part of its open enrollment period, to both the public and private markets. The product would become available in 2006, she said. [Defined Contribution News]   June 17, 2004 Colorado School District Evaluates RFIs For New 457 Plan The Colorado Springs School District 11 is evaluating requests for information from firms vying to become bundled provider for its new 457 plan. Tim O'Brien, executive director, procurement and contracting, said that the school district's staff has been asking for an additional way to invest for their retirement. Furthermore, the sponsor considers the deferred compensation plan a useful recruitment and retention tool, especially since it does not penalize participants for withdrawing money prior to age 59-1/2, he said. "But all in all, the district is looking into rounding out an investment program for its staff," which may currently save for retirement through its 403(b) and 401(k) plans.   O'Brien declined to specify how many proposals the sponsor has received or name the bidders, but did say that he sent out the RFIs out to all 13 of the district's 403(b) providers, including American Express Financial Advisors, CitiStreet and New England Financial. Altogether, O'Brien expects that the pool of responses should yield between five and 10 qualified bids. Unless there is a single, clear winner, the sponsor will invite two or three candidates on site for finalist interviews, he said. It hopes to award the contract by the first week of July. Unlike its 403(b) program, the district is looking for a single provider to administer its 457 plan for the sake of administrative ease, he said. All of the school district's 4,000 employees will be eligible to invest in the new deferred compensation plan, he said. The sponsor is not using a consultant to assist in the search. [Defined Contribution News]   June 17, 2004 Granite State May Search For New Bundled Provider The $146 million State of New Hampshire Deferred Compensation plan might search for a new bundled provider, as its contract with ING expires early next year. Michael Ablowich, state treasurer and board member, said that the sponsor expects to decide by its Aug. 13 board meeting whether to put the 457 plan out to bid in order to allow sufficient time for the RFP process. Separately, the Concord, N.H., sponsor might shuffle its investment lineup by adding emerging market and bond funds to its roster and replacing its Fidelity Investments OTC Fund due to style drift concerns. It is also keeping an eye on its four Janus Capital Group funds because of market timing allegations against the firm. Ablowich was unable to comment on the likelihood of the sponsor renewing ING's contract as bundled provider, but said the plan was not looking for any specific service improvements at this time. However, the board has in the past raised the possibility of offering advice to participants, he said. "If New Hampshire decides to re-bid we will work with them through the process," said Caroline Campbell, an ING spokeswoman.   Ablowich said the plan's consultant, Wainwright Investment Counsel, suggested that the plan consider adding funds in the emerging market, global bond and high-yield categories. "They're hot areas right now," he said. However, the plan is somewhat hesitant to make that move. "Participants are not banging on the door asking for them," said Ablowich. Also, the sponsor may eliminate the Fidelity OTC Fund from its roster due to style drift. The fund, which was originally a large-cap option, has moved into the multi-cap category. The Fidelity OTC fund is performing well relative to its peers, making it a difficult decision to remove it, he added. Over the past five years the fund outperformed its large-cap growth peers by 8.53%, according to Morningstar. Sophie Launay, a Fidelity spokeswoman, did not provide comment by press time.   Market timing allegations against Janus have caused the 5,600-life plan to take a closer look at the funds it offers from the firm. "We're sort of grappling with this issue," Ablowich said. Shelley Peterson, a Janus spokeswoman, did not immediately return phone calls. The plan's option roster includes the Janus Twenty, Janus Aspen Series Worldwide Growth, Janus Aspen Series Balanced and Janus Aspen Series Flexible Income funds. Its complete lineup comprises 20 funds, with offerings from The Vanguard Group and Pioneer Investments. [Defined Contribution News]   Home | Disclaimer | © 2004 bWise Guys, LLC. All rights reserved.