Internet start-ups claiming they can provide the ultimate next generation of 401(k) products and services online are a dime a dozen. But Emplanet Inc.’s credentials are hard to ignore.

Members of its executive management helped build the online 401(k) businesses at American Express, State Street Corp., Dreyfus Corp., FleetBoston Financial Corp., Morgan Stanley Dean Witter & Co., Fidelity Investments, Merrill Lynch & Co, and Paine Webber Group Inc.

“We have a leadership team that has been building and growing the online 401(k) marketplace for years,” said Gary Gould, senior vice president of business development at Emplanet, which is based in Westborough, Mass. “Going online and assembling a line of retirement products does not make you an e-401(k) provider. To provide the best service people have to believe what you are selling.”

Mr. Gould, who helped build American Express’ Retirement Services online 401(k) unit, is one of nine members of Emplanet’s executive management team that have helped put other firms’ 401(k) units online. “We have done it. We have a clear understanding of how and where we can improve the process, and people believe us,” Mr. Gould said.

Emplanet “is setting the bar for banks and insurance companies,” said Ed Kountz, an analyst with TowerGroup, a New York financial research firm. “Certainly there is greater need for technology then there ever has been before, and an outsource like this is invaluable to other financial companies that aren’t tech savvy.

“In terms of the Internet and wireless communication, banks and financial service providers don’t have the internal resources to do everything in house,” he said, and they need to work with companies like Emplanet to provide their clients with value-added technology services.

A month after its launch, Emplanet is distributing its 401(k) service through two banks, each of which has more than 1,000 brokers, Mr. Gould said. He declined to name the banks.

Mr. Gould said that the firm is negotiating with other banks, and that he is confident more deals will be finalized by early 2001.

“Primarily, our distribution strategy is focused on financial institutions. We are sitting down with large banks. We want to be their e-401(k) business,” he said.

Mr. Gould said that on a bank’s Web site the service has the look and feel of a bank product. “This gives banks a way into the e-401(k) industry without having to start from scratch,” he said.

Retirement benefits are the most popular type of employee benefit ever created, according to a TowerGroup survey. This year they have 43.5 million participants, the survey found.

Eighty-five percent of small businesses cannot afford to offer them, however, partly because the paperwork is so costly. But substituting online records for paper lets Emplanet provide affordable 401(k) plans to companies with fewer than 20 employees, Mr. Gould said.

Emplanet can provide competitive products at half the price of a traditional provider, he said.

“Now, with a streamlined back office, every company can afford to offer their employees a 401(k) plan,” Mr. Gould said. No paperwork for the employer “means we don’t require administrative work or an operation group to monitor the administration.”

Mr. Gould said not having a roster of active clients gives Emplanet an advantage.

“The 401(k) industry … is a complex spaghetti works of people, components, and connecting systems,” he said. An established provider that wanted to take full advantage of the Internet would “have to completely dismantle and rebuild.”

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