The Internet is opening up a whole range of new possibilities for 401(k) participants. Many participants can now go online and, by gaining access to their retirement accounts, redistribute their investments or take out loans.
While access to an e-mail account may be somewhat commonplace in the white-collar workplace, access to the World Wide Web is not as common. Many companies restrict Internet access while others use Intranet systems that do not hook into the Web. Employees who work in the fast food and retail clothing industries, for example, or in manufacturing do not have Internet access at all on the job.
Internet access can also be time consuming. One of the reasons employers restrict Internet use is that employees can consume hours of company time surfing the Web. The time is lost even if it entails participants attending to their company-sponsored retirement plans. Employees who do not have Internet access at home may also refrain from checking into their accounts online at work because they do not have the time to do so.
New York Life Benefit Services has created a new service that cuts down on the need to surf. The company, based in Norwood, Mass., will send certain 401(k) account information to plan participants by e-mail on request.
The information is sent automatically at intervals that participants request: either weekly, monthly or quarterly. And participants can still get information from New York Life Benefit's 401(k) website, (www.bcomplete.com), whenever they want.
"Plan sponsors win because it helps them better educate participants with no additional cost or effort; participants win because they can view their account information in an easy-to-understand format for the timeframe they can specify without having to go to our website, and we win, because we can deliver information much more efficiently," said Tod Bryant, director of information systems at New York Life Benefit Services.
New York Life Benefit officials also believe that e-mailing account information to participants gets people to look at their accounts more often. Customers can sign up for the service online.
The information that New York Life sends participants is broken into four categories: account profiles, investment summaries, fund profiles and investment returns.
Account profiles provide information on file about the participant as well as his 401(k) balance and loan information. The investment summary shows a breakdown of the participant's fund allocation. The fund profile explains the investment strategy of each fund that the participant is invested in, and investment returns show historical investment return information of those funds. Participants can receive any or all of this information by e-mail.
The e-mail access is not aimed at satisfying legal obligations but at satisfying customer needs, said David Wray, president of the Profit Sharing/401(k) Council of America.
"These plans are about making employees happy," Wray said.
He says most defined contribution information will eventually be disseminated electronically. Paper administration will be maintained for those who are not electronically-inclined or do not have access to computers. Electronic forms of communication include the Web, e-mail and the telephone.
"A lot of people are not electronic (but) electronic administration will be the backbone," Wray said.
The federal Department of Labor is also easing regulations regarding electronic media. The DOL is considering allowing plan administrators to send some benefit information to employees electronically as long as the receipt of documents can be confirmed. The DOL is currently taking comments from the public on the proposed rule. The Investment Company Institute, the mutual fund industry trade group, has posted information about the rule change on its website at www.ici.org under legislation topics.
New advertising technology in
A California company has created new technology that could dramatically change television advertising and already one fund supermarket has signed up to try it.
Wink Communications of Alameda, Calif. is now marketing its Wink E-Commercial program, which is used for cable television. Using the new technology, cable television viewers can request more information about a particular product on certain stations by using remote control.
Charles Schwab, in the first quarter of this year, will become one of the first companies to use the technology for its commercials. The commercials will allow Schwab to generate leads for potential investors and get information quickly to those who are attracted by its advertising, according to Wink Communications. Schwab did not return a call seeking comment. But, Peter DeLuca, Schwab's vice president of advertising said in a statement: "...Schwab now has an opportunity to complete a direct connection between our advertisement and a viewer response."
Wink officials also did not return calls.