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Mutual fund 401(k) plans have been
aggressively promoted to the small business communities both by no-load
fund companies (e.g., Fidelity Funds, Vanguard Funds) and load fund
companies (e.g., MFS, John Hancock, Putnam). recent new articles,
however, have reported a trend among many of these plan vendors to
abandon the very small plans because the costs of providing 401(k)
services for such plans versus the revenue generated from them has
proved to be a losing proposition. For economic reasons, the sales
target for mutual fund bundled plans has been raised, and now companies
with fewer than 100 employees are not being actively solicited by most
of these vendors. |
