NYL Retirement Sees Client Pension Service and Costs Improve

Win / Loss analysis client logoWESTWOOD, Mass., December 13, 2005 – NYLIM Retirement Plan Services, a division of New York Life Investment Management LLC (NYLIM), has found that most of its defined benefit clients who moved from an unbundled to a bundled platform during the last several years have seen overall pension service, costs and employee awareness improve since their plan converted.

Bundled pension services entail using one provider, such as NYLIM Retirement Plan Services, for most or all of the services necessary to maintain the plan.  Such services include administration, investment management, trust, actuarial consulting and employee communications.  Under a traditional, or unbundled, model, a plan sponsor arranges and pays for each of these services a la carte, usually from different firms.

Service Improvement

For example, according to NYLIM Retirement Plan Services, 84 percent of its pension clients who switched to a bundled environment indicated in a recent study that overall service to their plan had improved. Similarly, 75 percent of these clients questioned said plan administration had improved while 17 percent thought it had stayed the same.  Plan administration includes such services as answering participant telephone inquiries, processing payroll feeds and distributing checks to plan beneficiaries.

Sixty-seven percent of plan sponsors in the study said the effectiveness of their service team had been enhanced under a bundled model, while 33 percent reported it had not changed.

Additionally, 73 percent of plan sponsors questioned indicated that investment services, such as investment review and monitoring, the range of available investments, and investment fiduciary support, had improved over their prior provider, while 27 percent said investment services had stayed the same. None reported a decline in service.

Cost Reductions

Many of NYLIM Retirement Plan Services’ plan sponsor clients also saw a decline in servicing costs associated with their pension plan under a bundled platform.  Sixty-seven percent of NYLIM Retirement Plan Services’ defined benefit clients in the study said their pension costs declined versus 25 percent who said the cost had stayed the same and eight percent who said costs had risen.

“Until now, there’s been anecdotal evidence that bundling improves service to pension plan sponsors by enhancing automation, efficiency and plan oversight, but now we have data to back that up,” said Don Salama, managing director of sales, marketing, and product development for NYLIM Retirement Plan Services.  “Bringing state-of-the-art, web-based technology to the traditional world of pension plans is clearly revolutionizing this business during a time when plan sponsors want fewer service providers, not more.”

Increased Employee Awareness

Finally, NYLIM Retirement Plan Services has seen an apparent increase in its clients’ employee awareness of their pension benefits in the switch to bundling.  Seventy-five percent of plan sponsors questioned believe employees’ awareness of their pension benefits had improved as opposed to 25 percent who thought it had stayed the same. Employee awareness of a pension plan is important to plan sponsors, who offer this relatively high-cost benefit for reasons that include employee attraction and retention.

The study was performed by Rich Schroder of Anova Consulting Group in Brookline, Massachusetts. Respondents to the study represent more than 90 percent of NYLIM Retirement Plan Services’ pension clients who moved from an unbundled service arrangement to NYLIM’s bundled platform from January 2002 to August 2004.  Anova is a market research and consulting firm focused on the financial services industry.

“Although our sample size is small due to the fact that this trend is still emerging, the results of the survey show a lot of potential for growth in the bundled pension market,” said Salama.

About NYLIM Retirement Plan Services

NYLIM Retirement Plan Services provided services to more than 2,100 defined contribution, defined benefit and deferred compensation plans as of October 31, 2005. With offices in Westwood, Massachusetts, and Parsippany, New Jersey, NYLIM Retirement Plan Services administers retirement programs for small, medium and large companies, multi-employer plans, and individuals throughout the United States, and is widely recognized for its leadership in bundled defined contribution and bundled defined benefit plans.

With more than $196 billion in assets under management as of October 31, 2005, New York Life Investment Management LLC and its affiliates provide investment management and related services to a wide range of individual, corporate, public, and Taft-Hartley clients. NYLIM offers institutional asset management, retail investments, retirement plan services, guaranteed products, real estate investments, and alternative investments. For more information, visit NYLIM’s website at