Companies with 401(k) plans, or intentions of setting up such a plan, ought to investigate bundled options. "These are plans in which one financial company provides its customers with the comprehensive range of 401(k) services," explains Joan M. Curtiss, manager of pension marketing at Minnesota Mutual, a life-insurance company based in St. Paul, Minn.

Bundled plans offer one-stop shopping for such 401(k) services as plan design, compliance testing, investment administration, government reporting, and all facets of employee education. "The advantage for companies with 50 to 500 employees is that they can better control costs and quality," notes Curtiss.

Ivans, a small Greenwich, Conn., telecommunications and data-processing company, recently made the switch. "We have an extremely good plan that includes high levels of corporate matching and a short vesting period for our employees," says Bob Payne, Ivans's vice-president and treasurer. "We were looking for a 401(k) administrator that would be as good as our plan itself."

Payne chose a bundled provider because Ivans didn't want to handle 401(k) administration or record keeping but did want to offer employees a wide range of investment options. "We interviewed about a dozen firms, and we selected Minnesota Mutual, in part because its plan gives our employees 10 investment options and a lot of investment control," says Payne.

Payne recommends that companies "look for a 401(k) provider whose bundled services include a lot of support during the transition process. It's very complicated, because when you transfer 401(k) records you must temporarily freeze assets. It helps to choose a firm that's got a plan for handling that quickly and accurately, while keeping your employees informed about what's happening and why."

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