After much anticipation, the new CitiGroup is launching its effort targeting the small 401(k) plan market. The product will be a joint effort by two CitiGroup arms: Salomon Smith Barney and SSB Citi Asset Management Group. Dubbed (k) Choice, the product will offer mutual funds from all three SSB Citi Asset Management Group mutual fund families - Salomon Brothers Mutual Funds, Smith Barney Mutual Funds and CitiFunds.

Salomon Smith Barney's will use its force of 10,900 Financial Consultants to market the plan to small and mid-sized companies starting today.

Richard Tinervin, executive vice president, SSB Citi Asset Management Group, will oversee the asset management side of the product. Lynne Shapiro, senior vice president, Salomon Smith Barney's Corporate Retirement Services area will head up the sales support side.

"SSB Citi Asset Management Group and Salomon Smith Barney are committed to the small and mid-sized 401(k) market. These 401(k) clients are requesting 'open architecture,' a platform that offers plan sponsors a broad selection of quality mutual funds. We designed (k) Choice to address that need," said Tinervin.

The product will also allow plan sponsors to choose outside investment options from: AIM, Alliance, Lord Abbett, MFS, Oppenheimer and Van Kampen.

Recordkeeping for the plan is outsourced to First Data.

Despite this being CitiGroup's first major foray into this market, the company has taken a rare approach by offering guarantees for its services. In the event that documented service standards are not met, the bank agrees accept an automatic recordkeeping fee reduction.

"We believe that the most effective way to demonstrate our commitment to quality is to tie fees to service delivery," said Shapiro.

She added that the target market for the product is plans with $1 to $5 milllion in assets. Startup plans would need to meet additional criteria including having at least 300 employees and $1 million in annual cash flow.

"We have other existing products for the startup market," she told InvestmentWires. 

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