With a new Internal Revenue Service requirement about to require 403(b) sponsors to assume fiduciary duty, much as 401(k) sponsors do, and pare back the number of offerings, the sponsors are inevitably going to scrutinize their plan administrators.

And that is an opportunity that Fidelity Investments plans to pounce on.

Currently, Fidelity not only ranks second in the 403(b) market, but it trails TIAA-CREF by a significant margin. Fidelity has $49.8 billion in 403(b) assets under management, less than one-seventh of TIAA-CREF's $370.8 billion.

But Fidelity plans to change that, and has devised a five-year plan to accomplish this, Fidelity Executive Vice President John Begley told Pensions & Investments, without providing details.

"Some institutions are looking at vendor reduction. Some want to bring it down to two or three, not necessarily one, but it's a strong market for us as the sole provider," Begley said.

Nonetheless, TIAA-CREF believes it will maintain its stronghold on the 403(b) market.

"As competition intensifies," said TIAA-CREF spokesman Chad Peterson, "we believe TIAA-CREF's combination of choice, long-term approach, dedicated service to the non-profit community, value and staying power surpasses what is available from many other providers, none of whom share our non-profit heritage or unique mission."

(c) 2007 Money Management Executive and SourceMedia, Inc. All Rights Reserved.

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