Squeezed Out

Big 401(k) Shops are Firing Small Clients,
Which Now Must Choose Between A More Costly Plan and None at All

by Harris Collingwood & Janice Koch

PART FOUR OF A SERIES

Worth, December/January 1999, pages 103-104
partial reprint; visit www.worth.com/articles/Z9812F03.html for complete article

EXCERPT:

"All over the country, 401(k) vendors --- the companies that perform investment management, record keeping, employee education, and regulatory compliance testing -- are firing their customers...., many of them small and midsize companies."


OTHER POINTS:

-- United Asset Management, Van Kampen Funds, Dreyfus, and MFS have all announced they're "getting out of the business of administrating (401k) plans."

-- Many benefits consulting firms that had formed alliances with independent money managers to administrate 401(k) plans are also "abandoning" the 1000-participant-and-less market.

-- Small and midsize companies must look for new vendors. Often have to replace all vendors even if only one is pulling out due to changes in marketplace.

-- New vendors may cost up to three times as much.

For complete text, visit www.worth.com/articles/Z9812P03.html or contact Worth Magazine.