Union Planters Corp. is working on a program to help it retain retirement-plan assets after retirement.
The program includes an online IRA service center to be launched in the fourth quarter - with the help of a new record-keeping firm - plus retirement planning advice.
Union Planters, based in Memphis, manages $400 million of assets for 30,000 people in over 250 defined-contribution qualified retirement plans. But Alan W. Kennebeck, its senior vice president in charge of retail, said too much of that money is leaving the company when those who are in the plans retire.
He said he had no figures handy, but a Spectrem Group study suggests it is a big problem for banks as well as other institutions that hold retirement plan assets.
If current trends continue, the New York financial services consulting firm said, about $1.2 trillion of qualified retirement assets - 15% of all such assets last year - will roll over to nonqualified accounts at competing financial companies in the next five years.
Retiring participants in plans held by Union Planters do not know the company can help them, Mr. Kennebeck said. "We have to make sure we build an awareness that they can get this advice from our organization."
In-branch investment consultants are being trained to help plan participants to move funds into IRAs and alert them to other investment-oriented opportunities within Union Planters Bank, Mr. Kennebeck said.
"We expect to be able to be the first in line to assist employees with a rollover option when they're ready to leave their plan," he said. "We've restructured the role of the traditional bank-employee benefits administrator to become more of a consultant."
The outsourcing of record keeping to Universal Pensions Inc. of Brainerd, Minn., will also help raise plan holders' awareness of the bank's services, Mr. Kennebeck said. In addition to helping keep plan costs down, Universal Pensions, which is expected to take over by midyear, will provide the technology for the online IRA service center.
The center will provide retirement calculators and other information as well as the documentation and tools for plan participants to move money, using the Internet, from their retirement plans to individual retirement accounts at Union Planters.
The company will promote the service with advertising near yearend, Mr. Kennebeck said.
Laurie L. Cochran, a Chicago-based senior consultant with Spectrem, said that though some larger mutual fund companies are providing retirement planning tools and advice to retain retirees' assets, banking companies have largely neglected the issue.
"That's obviously a mistake, because when participants roll funds over, there's an opportunity for a very big windfall," Ms. Cochran said.
Spectrem found that when a customer moves funds from a retirement plan to a rollover IRA, the main reason for choosing the IRA provider is a relationship with it apart from the plan, Ms. Cochran said. Providing advice is one way to build that relationship, she said.
"It's hard, because there is not a payback immediately, but you have to be willing to build a relationship," Ms. Cochran said.
