Union Bank of California is set to handle some record keeping duties for a large actuarial and consulting firm that specializes in 401(k) plans.

At the end of February, the bank will take over daily valuation of 60 accounts from Louis Kravitz & Associates, Los Angeles. Union is one of a handful of banks that offers this service.

There are two components to the 401(k) record keeping business: daily valuation, which puts a value on the accounts every day, and balance forward, which is the value over a longer period.

Daily valuation, the newer part of the 401(k) record keeping business, requires a costly technological infrastructure that many banks cannot afford. Balance forward, also known as traditional valuation, is an older and less expensive measure.

"We've been in the daily valuation business since 1990, two years longer than Louis Kravitz," said Michelle C. Breeden, vice president and client relationship manager for Union Bank of California in Los Angeles. "This represents 30% of Lou's business."

Louis Kravitz is exiting the daily valuation business. The company said it is making the switch because of technological and personnel demands.

The company said it will focus on plan design, actuarial, consulting, and administrative services.

However, Louis Kravitz will maintain its balance forward business for 401(k) and profit-share plans, as well as employee stock ownership plans.

Paul I. Kampner, president of TMark Associates, a Chicago-based 401(k) advisory service for banks, said there are only "about half a dozen" banks in the 401(k) daily valuation business. They include State Street Corp., Norwest Corp., KeyCorp, and First Union Corp.

"Banks have been slow to adapt to daily valuation," Mr. Kampner said. "Union Bank of California has moved aggressively" to develop the technology.

Ms. Breeden said banks are exiting the daily valuation business because "they can't make a profit and don't have the resources for the technology."

"We got into it early as we saw 401(k) plans become more popular," Ms. Breeden added. "We made a significant dollar and personnel investment."

Union of California calculates daily valuations for 400 accounts with $12.5 billion of assets.

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