Magazine article American Banker

MFS Gearing Up for Retirement Plans

Magazine article American Banker

MFS Gearing Up for Retirement Plans

Article excerpt

Massachusetts Financial Services is making a major push into the business of servicing retirement plans.

In addition to reorganizing and expanding its retirement-services division, the Boston-based mutual funds company is designing new products for defined-contribution plans, such as 401(k) plans.

Last month, the company began selling the MFS Fixed Fund, which pools guaranteed investment contracts and similar investments for defined-contribution and pension plans.

The primary reason for adding this fund to MFS' product lineup "is that the No. 1 investment objective for 401(k) investors is a fixed investment." said Doug Grip, senior vice president and head of the retirement-services division.

A 401(k) is a salary-reduction plan that allows employees of corporations to save for the future while sheltering part of their compensation from taxes.

Such plans are called defined-contribution plans because workers set aside a specific amount of money. Returns vary depending on how investments are allocated.

More to Come

The MFS Fixed Fund is a harbinger of future moves. More product launches are planned for after Jan. 1, Mr. Grip said, but he declined to elaborate.

"This is one of many things that we are trying to do to expand" in the defined-contribution area, said John Reilly, an MFS spokesman.

In response to consumer concerns about performance, service, and price, MFS launched the Fundamental 401(k), a simplified pension plan, in May.

In the retirement services division, the marketing staff has more than doubled from 19 people last year to 41 now. …

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