Crestar Financial Corp. this week unveiled a retirement plan service this week aimed at small businesses.

The new 401(k) plan includes many of the options the Richmond, Va.-based banking company offers larger companies, but with fewer administrative responsibilities for plan sponsors and a narrower range of investment options.

Officials at the $14.3 billion-asset bank say the plan should enable Crestar to generate new business from the fastest-growing segment of the retirement market - companies with up to 100 employees.

"Less than 11% of these companies have retirement plans in place for their employees," said Thomas D. Hogan, executive vice president in charge of Crestar's trust and investment management group. "They represent the most growth for 401(k) in our market."

Dubbed the 401(k) Solution, the new retirement plan includes daily valuation, an employee loan option, automated telephone access to accounts, and an option that lets callers speak directly with an account representative.

On the administrative side, Crestar handles all record keeping, accounting, and shareholder services. The bank will also act as trustee for plan sponsors.

But unlike 401(k) plans sold to larger companies, the new service only offers sponsors a choice of investments from the bank's proprietary mutual funds, the CrestFunds, and one international portfolio from Fidelity Investments' Advisor fund family.

None of the funds offered through the new plan charge a sales fee, commonly known as a "load." Mr. Hogan said that that's a plus for plan sponsors and employees who are sometimes "held hostage" by back-end loads, which must be paid to plan providers if a sponsor opts to switch to another provider.

"Sponsors that want to change (401(k)) providers are sometimes shocked when they find out how much these fees amount to," Mr. Hogan said.

Crestar has been selling 401(k) plans since the retirement program came into existence in the early 1980s. The bank has about $2 billion of retirement assets under management, of which $700 million are in 401(k) plans. But Crestar can expect stiff competition from mutual fund and insurance companies, one expert said.

"While there are not very many bank retirement products out there that have these features for small plans, wholesale fund groups have had them in place for years," said William E. Chapman 2d, retirement product manager for Kemper Financial Services in Chicago.

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