MutualFundWire.com: Midwestern Fund Company Offloads Small 401k Biz
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Friday, April 23, 1999

Midwestern Fund Company Offloads Small 401k Biz


The number of players offering full-services to the small end of the market continues to shrink. Early this month, JP Morgan|American Century informed a number of small plan clients that it will end its recordkeeping and administrative services as of September 30, 1999. A spokesperson declined to specify which clients are effected but confirmed that the "size of the plan is a major criteria" in the selection.

"We took a look at certain clients that could get better services at a lower price," the spokesperson said.

The provider has arranged to transfer the plans to either ADP or Nationwide Financial Services depending on the plan sponsor's desire. Plans may also be taken to alternative administrators and TPAs. The fund company looked for alternative administrators for this block of business for more than a year.

The transfer will involve recordkeeping, administration, communications and other services, but will not affect the plans' investments. These plans will continue to use JP Morgan and American Century investments, according to the spokesperson.

Altogether the decision effects about 1% of JP Morgan|American Century's defined contribution assets and 5% of its participant base.

Currently the company has 270 defined contribution clients, and 300,000 participants. American Century has $15 billion in total defined contribution assets while JP Morgan manages a total of $14 billion.

These moves will not affect American Century Retirement Plan Services large plan business. "We are working diligently at leveraging JP Morgan's defined benefit clients which are mostly larger plans," confirmed the spokesperson.


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