A bundled vendor with a company stock problem? Marsh is taking heat in the San Francisco Chronicle for offering a 401(k) plan featuring just Marsh stock as an option. Marsh is the parent firm to 401(k) provider Putnam Investments. The firm contends that the plan is an ESOP with 401(k) features and is not intended as a retirement plan. The firm adds that it also offers a generous defined benefit plan. Still, these excuses sound lame in the current environment, valid or not.



Northern Trust said its loans to Enron totaled $43.5 million, including $24.5 million in unsecured loans. Published reports last week hinted that Northern Trust made loans to Enron to help it win the plan sponsors 401(k) administration business. The business went to Hewitt Associates.



Schwab was reportedly dropped as the provider of the brokerage option in the Enron 401(k) plan at the end of July, according to the Wall Street Journal. That action would date to before the resignation of Enron CEO Skilling and the plan's conversion from Northern Trust to Hewitt Associates. Schwab also advised Skilling to hedge his holdings in Enron stock with a collar, advice that he did not take.



Washington has it quotes ready. Bush Cabinet members Paul O'Neill (Treasury), Elaine Chao (Labor), and Don Evans (Commerce) met Friday. The meeting was in response to President Bush's call for an exploration of the rules, regulations and laws that govern pension plans and investment programs, such as 401(k)s. They directed staff to immediately begin analyzing the effectiveness of retirement security protections. "We will take the necessary steps to ensure appropriate protection for the retirement nest eggs of millions of Americans," stated Treasury Secretary Paul O'Neill. "We need to fully protect workers who depend on pensions and 401(k) plans for their retirement," stated Labor Secretary Elaine Chao. "Our number one priority is the security of the retirement savings of America's workers," stated Commerce Secretary Don Evans.



Representative John Boehner (R, Ohio) is taken a stand behind President Bush's call for a review of the nation's employee pension system. He also used the opportunity to urge the Senate to pass his investment advice bill (The Retirement Security Advice Act, H.R. 2269). Boehner's bill is facing a competing bill in the Senate authored by Jeff Bingeman (D, New Mexico) and Susan Collins (R, Maine).



Participants beat the pros. Despite knocks against participants for supposed poor investment selection, they are beating the professionals. Watson Wyatt tracked the returns of defined benefit plans against 401(k) plan returns and found that 401(k) plans are best since 1995. Prior to that time DB plans had higher returns. 401(k) returns are about 100 basis points higher than DB plan returns from 1995 to 1998. Read the study summary here.



Surveys may find the obvious. The majority of Americans still do not have an educational savings account, according to an online survey conducted by SunAmerica Mutual Funds. Also not surprising is the finding that only about half of the family respondents are budgeting for the expense. SunAmerica's take on the results is that financial advisors have a prime opportunity to help in this area.



Waddell & Reed Financial has two new fund managers. The firm named Cynthia Prince-Fox, co-chief investment officer of San Antonio-affiliate Austin, Calvert & Flavin. She also takes the reins co-manager of the Waddell & Reed Advisors Value Fund the W&R Target Funds Value Portfolio. It also tapped Barry Ogden, vice president as portfolio manager of the Waddell & Reed Advisors Tax-Managed Equity Fund and the W&R Funds Tax-Managed Equity Fund.



Ellen Schultz has written an article for The Wall Street Journal on Enron and its 401(k) plan. The article analyzes various responses that Washington could take to the Houston-based energy company. Schultz looks at whether the government will respond to Enron they way it responded to Studebaker (the disappearance of that company's pension plan led to ERISA) or if it will be too difficult to enact any changes to the law.



Also according to The Wall Street Journal, FleetBoston is delaying the release of its fourth-quarter earnings report. The firm claims that there are "unresolved issues" from its Argentinian banking operation.



DecisionPoint has raised $10 million in a new round of financing from Battery Ventures. The firm -- located in Beaverton, Oregon -- provides financial performance management software.



M Financial Group has announced today that its M Fund would now be made available to qualified plans such as 401(k) plans. Donald H. Mehlig, president of Cal-Surance Benefit Plans, Inc. (a member firm of M Financial Group), stated, "As we developed our state of the art 401(k) platform, it was important to us to include the M Funds in our offerings. The inclusion of the M Funds is an added benefit offering benchmark-beating funds. Most advantageous is the ability to design and package two-tiered program, combining a 401(k) and a nonqualified plan, with M Funds available in both products." Previously, M Funds had only been available to institutional investors.  

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