Internet: Tapping 401(k) Growth

The growing adoption of 401(k) retirement plans is a hot market for banks. Union Bank of California, not one to linger, has leaped ahead with a Web site that gives customers Internet access to retirement planning tools.

The 401(k) Resource Site includes an investment tutorial, a quarterly retirement newsletter and interactive tools for retirement planning, tax savings calculation and investment risk evaluation. A visitor to the site can model his own 401(k) scenario by plugging in numbers, compiling results and making adjustments. The site also is an effective marketing device for the bank; it is aimed at all consumers, not just bank customers. "As the focus in the defined contribution retirement plan market shifts to participant-directed accounts, employees are clamoring for more investment information," says Jeff Boyle, svp and director of business trust sales and marketing for Union Bank, the West Coast's largest provider of in-house 401(k) services. "We invested heavily in providing them with workbooks, videos and CDs. The next logical step was the Internet."

The bank engaged an outside consultant to produce the Web site. Boyle says the bank will soon offer the 120,000 participants in its own 401(k) plans on-line access to account balances, funds transfer, and an ability to reallocate their investments, moving from bonds to equities or small capital funds to income equity funds with a mouse click. The bank also plans to develop other tools, such as more in-depth investment information, says Boyle.

Employees, fearing that Social Security will not meet their retirement needs, are taking control of the reins in their investment decisions. Thus, growth in the market for retirement investment vehicles is being targeted not just by banks, but by mutual funds, brokers and insurance companies too. Banks must grab their slice of the pie soon or be lost in the shuffle. Union Bank is proving that using the Internet is one way to do it.

-peterson tfn.com

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