NU Online News Service, April 27, 2004, 3:35 p.m. – Prudential Retirement, a unit of Prudential Financial, Newark, N.J., has introduced an investment-mapping program that permits 401(k) plan participants to keep their original investments when their employers switch plan administrators.[@@]
Investment mapping is used when a 401(k) plan provider takes over an existing employer plan and transfers participant employees’ assets to mutual funds most similar to the funds they had with the previous provider.
Prudential developed the plan for the state of North Carolina and says the opt-out provision is the first of its kind. It was implemented during the changeover of the North Carolina 401(k) plan to Prudential Retirement, begun last September.
The idea was to give plan members additional flexibility and more time to consider investment options offered by Prudential Retirement. Prudential says it developed the opt-out program when North Carolina plan members expressed some anxieties about whether their favorite funds would be eliminated, according to Paul Chong, senior vice president of marketing and strategy for Prudential Retirement.
“We offered a flexible opt-out investment program so that members could retain funds from their previous plan as part of their investment line-up at the conclusion of the transition to Prudential,” Chong says.
North Carolina’s 401(k) plan is the nation’s largest for public employees, with $2.6 billion in assets and more than 181,000 participants. It is available to the state’s teachers, law enforcement officers and state and local government employees.