Scandal Prompts Plan Sponsors to Change Providers

With high-profile firms like Janus and MFS implicated for improper trades, "providers who have not been implicated find themselves much more competitive in today’s market place," according to Dan Cassidy, president of the employee benefits consulting firm Argus Consulting Ltd .

Because the scandal has caused so much panic among firms associated with tainted mutual funds, many 401(k) plan sponsors are also spreading their money around several funds instead of just their own. "Two years ago, one would see the mutual fund companies wanting 80% of the assets in their own funds, with only 20% outside," Cassidy said. "Now they are willing to have only 60% of the assets in their own funds. That’s business for other providers.