A new Mellon Banc Corp. unit is out to become a leading supplier of retirement plans by pairing corporate clients with Dreyfus mutual funds.
Executives with Dreyfus Retirement Services believe that top-notch servicing and the reputation of Dreyfus' mutual funds will make the unit one of the nation's five biggest providers of corporate 401(k) plans by 1998.
"We're making a major effort to say to corporations, here's what we can do for you," said Barbara E. Casey, president of the unit.
By marketing Dreyfus funds to business clients, Mellon executives are hoping to capitalize on cross-marketing opportunities that attracted them to the fund company last year.
Until buying Dreyfus, the Pittsburgh banking company "had banking relationships (with companies) but didn't have name-brand mutual funds," Ms. Casey said.
In an effort to capitalize on the $1.85 billion acquisition, Mellon has rechristened its Laurel Funds as portfolios within the Dreyfus family. And Dreyfus is registering new funds as retail and institutional offerings, so the products can be sold into 401(k) plans.
Defined-contribution, or 401(k), plans allow employees to use mutual funds to build a nest egg for retirement. Other mutual fund companies discovered the 401(k) market years ago, leaving Dreyfus Retirement Services with plenty of catching up to do, observers said.
"I wouldn't say it's too late, but there are certain factors," like heavy competition and a demand for ongoing support, said Amy Lipton, a consultant at Optima Group, Fairfield, Conn.
By brandishing the Dreyfus name, the new retirement unit may be able to make up lost time, she said. "It would perhaps open doors some other companies might struggle with."
Mellon created the unit earlier this year by combining its 401(k) business with those of Dreyfus and Boston Co., another acquisition. Right now, this organization ranks about 20th among defined-contribution plan marketers, said Ms. Casey, who was with Boston Co.
In addition to approaching Mellon customers, usually through their banking officer, Dreyfus Retirement Services is "aggressively out selling" to other businesses, Ms. Casey said.
The unit recently landed a large doctors group and is in the running for several other contracts, she said. "Because Dreyfus is a well-known name, we can get into final competitions very easily. That doesn't mean we always win, though."
The Dreyfus unit tries to maximize its chances by allowing businesses to choose from Dreyfus funds, including a "Lifestyle" asset allocation product.