First Union Corp. is expanding the services that it offers to 401(k) plan customers.
Employees of companies that use First Union's retirement plan services can now call a toll-free telephone line 24 hours a day to check how much they will have saved by retirement, how much they are eligible to borrow, and how much they would owe each month on a loan.
Corporate Plans Being Replaced
Customers of the Charlotte, N.C., bank were already able to call the number to check their account balances and transfer funds from one fund to another.
The service enhancements underscore the growing competition in the 401(k) marketplace.
The plans, which enable employees to set aside pretax dollars for retirement, are rapidly supplanting the traditional corporate retirement plans that have long been a niche business for banks.
Banks managed $111 billion of 401(k) plan assets at the end of 1992, according to Access Research Inc., Windsor, Conn. That equals 27% of the $410 billion that had been invested in 401(k) plans at yearend.
Increasingly, the corporations that sponsor such plans are demanding more service and variety from plan managers.
First Union got into the 401(k) plan business in 1990, and now manages $3.5 billion of such assets. The plans are offered through the bank's capital management group, which managed $21.6 billion of assets at midyear.
New Services Got a Dry Run
Linda Kerschner, vice president of First Union's 401(k) daily retirement services department, said the new services were tested for five months before they were made available to all 401(k) customers.
She said that the service was well received during the test phase because it enables customers "to get the information they need on the spot to make financial decisions, without having to wait for normal business hours."