The Promise of Web-Powered 401(k) Plans Strategic Finance (07/01) Vol. 83, No. 1 p.40; Levinson, Alan
Electronic 401(k)s have been launched. For participating
employees, this means a wider selection of investments and access to
online personal financial analysis and advice at affordable prices.
Employer plan sponsors can take advantage of automated administration,
adherence to government regulations, and easier management of retirement
savings plans. Smaller-sized low-end businesses are the main targets of
the new 401(k)s, since the market remains virtually untapped. The GoldK
start-up distributes about 15 mutual fund options through third-party
financial advisors and brokers and offers free Web-based record-keeping
and administrative services to both them and end users. "[Electronic
401(k)s] going to force a rethinking of the value proposition around
pricing and distribution of the 401(k) product,... because once pricing
is applied to the low end of the market, the high-end customers...are
still going to look for a better deal," predicts TowerGroup industry
analyst Dennis J. Ceru.