While EGTRRA opened the doors on a number of new business opportunities for fund firms, not all of those opportunities are panning out. The loosened rules on contributions to 529 plans and retirement plans at small employers have bolstered those market segments, yet an effort to broaden savings at larger firms has fallen on its face.

The failed product is the deemed-IRA. That account would allow employers to sponsor an IRA account for employees. Employees could then use that deemed-IRA for rollovers from other retirement plans. Yet, there appears to be little interest in the concept, reports Dow Jones Newswire.

That conclusion is bolstered by the lack of buzz surrounding deemed-IRA among retirement plan providers. Not only are they not a hot topic of discussion at advisor or provider conferences, they are not even a topic that InvestmentWires has heard raised in any context.

The lack of attention comes as a surprise to FRC's Chris Brown. He is exploring the use of deemed-IRAs as part of the Bisys research unit's renewed emphasis on the qualified plan market. Brown notes that employees may like the convenience of seeing their IRA and 401(k) account information in one place.

But the reason for the deemed-IRA's failure to catch on may be as simple as cost. Few firms have business development budgets to give over to untried niches. They are also more focused on rolling out both 529 programs and individual-K plans that show more immediate promise. Both of those plans also feature higher contribution limits. Those higher limits hold appeal to the financial intermediaries who fund firms are relying upon to move products in this market.

Finally, employers are over handling their current retirement programs and do not seem open to take on yet another payroll deduction plan and the costs associated with it. 

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