First Union Corp. announced Thursday that it will offer 401(k) retirement plans to its small-business customers through Fidelity Investments.
First Union decided to team up with the No. 1 provider of 401(k) retirement savings plans because Fidelity can produce individual statements for small-business employees, said Martha Hayes, senior vice president and head of small-business banking.
"We didn't feel we could offer it as competitively if we did it ourselves," she said. "This is a more efficient way to offer the product."
The retirement plans are designed for businesses with 25 to 200 employees and more than $3 million in annual sales. First Union estimated that there are more than 3.5 million such companies in its East Coast market.
Employees have the option of investing in First Union's Evergreen Funds or Fidelity Advisor Funds. Beyond setting up the plans and providing quarterly statements, Fidelity will provide employee education, 24-hour voice response, and tax reporting assistance.
Charlotte-based First Union also offers small businesses property and casualty insurance through a partnership with Hartford.