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Retirement Planning > Retirement Investing

A Good Year For Open Retirement Programs

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NU Online News Service, March 29, 3:55 p.m. – Executives at the Lincoln Alliance Program say this is a great year for companies that offer retirement plans with long investment menus to wrestle cases away from competitors with short menus.

The Lincoln program, a unit of Lincoln National Corp., Fort Wayne, Ind., has won 31 large and midsize retirement accounts this year, according to John Arant, a senior vice president at Lincoln.

At most of the employers, “there’s already an existing plan,” Arant says.

A few employers might be switching because of unrealistic expectations about how well a 401(k) plan, a 457 plan or a 403(b) account can perform in a terrible market.

But, in most cases, Arant says, employers are really looking for plans that offer up-to-date administrative tools, solid participant education programs, and, perhaps most important, a wide choice of investment options.

Marketing psychology experts say giving consumers too much choice might lead to more confusion than happiness.

But today, with articles about the collapse of the 401(k) plan at Enron Corp., Houston, still in the headlines, the typical plan sponsor wants to avoid any perception that it has picked a bad batch of mutual funds, or that it has chosen a retirement plan company that was interested solely in hawking its own mediocre funds.

Lincoln once focused mainly on selling variable annuities that offered a few sensible investment options.

A few years ago, the company started the alliance program, so that it could also offer mutual funds and other investment funds from outside companies.

The program, which sells mainly to plans with $10 million to $150 million in assets, now offers more than 3,000 mutual funds from about 200 fund families.

The program also offers a variety of Web-based planning tools from mPower Advisors L.L.C., San Francisco, that provide personalized, specific investment advice.

The program works with outside brokers, consultants and planners as well as Lincoln agents. The program can customize the compensation to fit the needs of the intermediaries, the executives say.


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