Look to Small Firms for Growth in Retirement Plan Market

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There has been substantial attention given to the opportunities in management and distribution of defined-contribution retirement vehicles, particularly 401(k) plans.

The movement from defined-benefit to defined-contribution programs is well established. So is the related shifting of costs and asset allocation responsibility from the employer/ plan sponsor to the employee/ participant.

Based on company-level data from firms such as Access Research, it is also becoming well recognized that much of the growth of 401(k) assets over the next decade will be from newly established plans of smaller companies with under 500 participants, rather than from larger companies.

Foothold in the Sector

In one sense. banks are strongly positioned in the small-plan segment. The clearest example is where a relationship already exists with the employer company through other commercial bank product lines. The loan officer filing a growth company's financing needs has an enviable inside track for steering that company's retirement assets toward the bank's 401(k) offering.

As a result, …