Lord Abbett Introduces New $500 Turnkey 401k for Small Business Market
Plan Satisfies Employers' Desire For Effective and Low-Cost Retirement Option To Provide Employees
JERSEY CITY, NJ, October 7, 2003 –- Lord, Abbett & Co. LLC, a leading investment management company, today introduced its $500 Lord Abbett Turnkey 401k Plan, one of the lowest priced retirement plans for use by small businesses.
The Lord Abbett Turnkey 401k Plan is suited for companies that have between 10 and 50 employees. The $500 annual fee covers all administrative preparation including 5500 preparation, ADP discrimination testing, top heavy testing, and all other salient features that typically accompany plans such as this including participant Internet access, daily valuations and switching. Plan participants have access to over 20 equity and fixed income funds, and on-going service is provided by the Lord Abbett Service Center, the Firm's internal retirement services specialists. This and all other Lord Abbett Retirement Plans are sold through financial intermediaries.
According to Michael Rose, Partner and Director of Retirement Services at Lord Abbett, based on 2002 U.S. Census Bureau data, 66 percent of all employees who work for small companies are without any formal retirement coverage at work. "The Small Employer Retirement Survey (SERS) shows that 69 percent of small business owners who don't offer a retirement plan would be more likely to do so if they could find a way to provide a low-cost program without any contribution or funding obligation," he said. "The Lord Abbett Turnkey plan offers a potential win-win situation for employer and employee; employers get a low-cost plan while employees get a retirement plan that allows them to defer up to $12000 pre-tax dollars vs. $3000 for IRAs."
Lord Abbett has been providing small business retirement plans since 1995. The Firm made a strong commitment to that market and currently has closed over 6000 401k plans. Mr. Rose stated that given the volume of plans the Firm has closed over the years, we have been able to realize efficiencies with our record keeping and administrative platforms that have allowed us the flexibility to reduce fees.
This is not the first time Lord Abbett introduced a retirement plan competitively priced to meet the needs of business owners: provide a solid plan with strong investment options but for a good price. Last year, the Firm introduced a $500 Lord Abbett SafeHarbor 401k Plan, for companies with 10 or fewer employees in which the owner met certain criteria for revenue and only has to offer a match to employees in order to eligible. "Since then, Lord Abbett closed over 1500 of these plans," Rose noted. "Our track record with offering SafeHarbor encouraged us to transfer that know-how to our Turnkey product."
As service to its clients, earlier this year Lord Abbett developed the "Lifecycle of the Investor" presentation for 401k plan participants. The educational tutorial was developed to help investors understand some of the nuances of investing for their retirement. The presentation was broadcast via Internet on the Firm's website and remains available to participants.
About Lord Abbett
Since 1929, Lord, Abbett & Co. LLC, a private, independent investment management firm, has been offering time-tested expertise, proven investment processes and a tradition of performance to private investors, corporations and institutions worldwide. Lord Abbett manages approximately $62 billion in assets as of September 30, 2003, including a family of mutual funds, and separately managed equity, fixed-income and balanced accounts for corporations, institutions and individuals. The firm remains committed to delivering its best for its clients by never deviating from its core business – investment management – and by taking a disciplined, consistent approach to investing in all market conditions.
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