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Internet Upsetting Status Quo In 401(k) Market: Study
NEW YORK -(Dow Jones)- Once overlooked as too costly to service, companies with fewer than 500 employees are demanding new respect from pension plan providers.
According to a study from TowerGroup, a Needham, Mass. consulting firm, the Internet is bringing down the cost of enrolling employees and keeping track of their contributions to such an extent that some 401(k) plan providers find it worthwhile to target companies with as few as 50 employees.
TowerGroup estimates that by 2005, 65% of companies with fewer than 500 employees will have 401(k) plans, up from 35% currently. Given the rate of growth of the overall market, that will represent an asset base of nearly $5 trillion.
"The advent of e-401(k) is changing the competitive landscape in the defined benefit industry," TowerGroup said in the study.
* Excerpts taken from full Dow Jones article, posted on December 12 and 13, 2000 |
