Citi 401(k) Plan to Employ All 3 of Its Fund Families

Citigroup Inc. said it plans to roll out a new 401(k) program that includes selected funds from the three families under its SSB Citi Asset Management Group umbrella.

The move would "maximize Citi's potential" as a 401(k) provider by offering more choices to plan sponsors, said Laurie A. Hesslein, an executive vice president at Salomon Smith Barney Inc. and head of U.S. mutual funds for SSB Citi Asset Management. She spoke to American Banker at the mutual fund industry's annual conference here.

Scheduled for launching this summer, the 401(k) program would give plan sponsors access to the CitiFunds, Smith Barney Funds, and Salomon Funds on one platform. This would be the first 401(k) program to offer access to all three fund groups.

Previously only Smith Barney offered a 401(k) program; the company manages about $8 billion of retirement assets. Ms. Hesslein declined to give further details of the 401(k) program, saying the particulars have not been completed.

In October, Citigroup put all its fund groups under the SSB Citi Asset Management name, creating a bank-managed fund complex totaling about $133.1 billion. The combined asset base propelled Citigroup to the top of bank- managed mutual fund rankings for the first time at the end of the last quarter, according to Lipper Analytical Services of Summit, N.J.

Offering plan participants access to proprietary fund groups "gives the perception of open architecture," said Burton Greenwald, a Philadelphia- based mutual fund consultant. However, since such programs are essentially proprietary, they do not offer access to funds from third-party companies such as Fidelity Investments or the Janus Funds.

So-called open architecture offers a selection of both proprietary and third-party funds, Mr. Greenwald said, and is favored by large 401(k) plan sponsors, those with more than 1,000 participants.

Citi's proposal would probably be "viable to the small and medium market," he said.

Separately, Citigroup will offer year-2000 seminars nationwide to high- end retail investors through Salomon Smith Barney and its private bank starting next month, said Sally Cates, a spokeswoman for the Citi investment banking unit.

The idea was started by two Salomon Smith Barney branch managers-in Midland, Tex., and Quincy, Ill.-who had fielded questions from retail investors about the year-2000 changeover and decided to hold their own investor sessions.

Ms. Cates said she was surprised at the response: 500 retail investors attended in Midland and 700 in Quincy. "We (had) thought it would be a bit of an eye-roller," she said.

The nationwide series of seminars, which are to kick off in Tysons Corner near Washington, will address people's concerns over the safety of their investments and the effect of the year-2000 changeover on global trading, Ms. Cates said.

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