Mid-sized 401(k) plan sponsors know they are in the drivers seat and are looking for some of the same services that plan providers have only given large corporations.
As a result, service providers are expanding their client targets from big firms with assets over $1 billion to those with assets between $5 million and $50 million, reports sister publication Employee Benefit News.
"Combine this with the enormous investment these firms have made in computers, real estate, employees and training, and you have a very motivated seller of 401(k) services," said Dan Cassidy, president of Argus Consulting.
These added benefits include improved technology, such as instant Web access to plan administration data, management of investment options from multiple fund families, and access to investment modeling and retirement plans.
They are also providing clients with more outside investment choices, with one option being a plan with 50% to 70% of fund choices from one fund family and the rest from outside firms. Another is a manager-of-managers plan, where a single provider offers funds managed by other investment managers.
"Its a buyers market today," said Cassidy, "and the sellers of investment and administrative services are running quite a sale."
See related article in MFMN: " Plan Sponsors Take 401(k) Providers to Task ".