The demand from corporations for retirement services has never been stronger, and Northern Trust Corp. says it wants a bigger slice of that market.

The Chicago-based banking company was one of the first in the industry to provide corporate clients with more comprehensive employee benefit services, through its 1994 acquisition of Hazelhurst Corp.

But since then, observers say, Northern Trust has been slow to expand the unit's client base and push its products and services.

Adele Langie Heller, director of retirement services for RogersCasey, a Darien, Conn. consulting firm, said, "Hazelhurst has not been marketed aggressively enough - and I don't know why, because they certainly have the talent, the quality, and technology."

The Hazelhurst unit receives fees for providing administrative, record keeping, actuarial, and employee communications services for 401(k), pensions, and other retirement plans, as well as for health and dental plans.

Constance F. Magnuson, senior vice president and director of retirement services, said it has taken Northern Trust two years to plot a strategy, but the company now plans to expand Hazelhurst's client base by pitching the unit's strategic consulting business.

"We all know that the environment for workers has changed dramatically over the past several years, as have the relationships that employees have with their company," Ms. Magnuson said.

She added that "we do see a lot more mobility from the work force, and that changes the type of benefits that people need from their employers."

More of Northern's 350 large and midsize corporate clients are asking for help in educating employees about investing for retirment, or rolling over money over from other qualified plans, such as 401(k) plans.

Employee communication services are also in higher demand because more people are retiring early, and many employers need to coordinate how benefits are dispersed well after someone leaves their employ.

Ms. Magnuson said 47 corporate clients now use Northern for its banking services and Hazelhurst for its employee benefits servicing, up from two that used both shortly after the unit was acquired.

She expects to see Northern Trust's employee benefits business expand 25% over the next two years by leveraging the bank's existing corporate banking relationships.

However, the banking company faces stiff competition. Last December, State Street Boston Corp. formed a joint venture with Watson Wyatt Worldwide, a leading provider of employee services. And companies such as Fidelity Investments, Cigna Corp., and Charles Schwab & Co. are also offering extended services.

Some experts predict that more banks will also enter the fray.

Acquiring employee benefits companies is "a cost-effective way to gain access to people that can influence where the money flows into retirement plans," said Ann Figueredo, a senior consultant for Spectrem Group, San Francisco.

She added that these acquisitions give banks the opportunity to cross- sell other bank services, and to attract assets more cheaply. Employee benefits companies can sometimes be bought for less than double their expected earnings, compared to two to four times earnings for money management firms, she said.

Robert Wuelfing, president of Access Research, a retirement market research and consulting firm in Windsor, Conn., said he's not convinced that banks can offer a full package of employee benefits cost effectively, but it's worth a try.

If banks "can get out there with a total benefits outsourcing package, you can integrate all your services, and that makes it very difficult for clients to consider leaving you."

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