Bank Leumi Trust Co. of New York has begun marketing retirement savings plans to small businesses using a program offered by Fidelity Investments.
The $2 billion-asset bank said it would make the 401(k) plans available to companies with at least 25 employees.
These popular plans enable corporate employees to earmark a portion of salary for retirement. Assets accumulated this way aren't taxed until they are withdrawn.
Fidelity will provide an array of 401(k) services, including a line of mutual funds and ongoing investment education for the employees who participate in the plans.
Bank Leumi caters to $200 million businesses or smaller. The demand for retirement savings plans among this core clientele has been especially strong, said Joseph Molz, a vice president in charge of investment services.
"Research shows that only 10% of small and middle market business currently have 401(k) plans, so we know there is a strong need out there," said Mr. Molz.
"With many companies down-sizing, many can't have someone dedicated to managing a retirement plan," he added. "But this turnkey program does the trick."
Mr. Molz said the Fidelity program has all the "bells and whistles" of much larger programs.
Investors will have the choice of 13 Fidelity Advisor funds and have their accounts valuated daily. Employees on the program will be able to switch between individual funds within 24 hours through a toll-free phone number.
In addition, Fidelity has arranged for administrative services, such as record keeping, to be provided by G & L Consultants, a retirement-plan administrator based in Greenwich, Corm.
"We're offering 'bundled' plans specifically designed for middle-market firms, and that simplifies the plan-management process. We handle the details," Mr. Molz said.
Bank Leumi is the largest subsidiary of Bank Leumi le-Israel, one that country's largest banking groups with more than $30 billion of assets and 300 branches worldwide.