Fidelity Issues Details of Plan For Chamber of Commerce
May 05, 2011
NEW YORK -- Fidelity Investments announced details of its retirement program for the U.S. Chamber of Commerce. With the product, the chamber's 215,000 members -- employing 24 million workers -- become potential Fidelity clients. Fidelity is marketing the product, U.S. Chamberplan for Retirement, to the chamber's members as a low-cost program with easy access to retirement plans and services. The program is designed for small companies; 96% of the chamber's members have 100 or fewer employees. For businesses with 25 or more employees, Fidelity has designed U.S. Chamberplan 401(k), which offers eight Fidelity mutual funds, record-keeping services and assistance with employee education. Businesses of other sizes and types can choose from Fidelity's SEP-IRA, Rochelle and Winner options. Next September 12, 2010 will stop offering the Sarsep (salary reduction simplified employee pensions) and substitute the new Simple (Savings Incentive Match Plan for Employees), created by a provision of the minimum-wage legislation signed this week. Fidelity and other firms are in hot pursuit of small-business clients. According to government statistics, 80% of America's five million to six million small businesses don't offer retirement plans. The chamber spent two years soliciting proposals from mutual-fund companies, insurance companies, brokerage firms and other providers of retirement plans before selecting Fidelity. Fidelity came up with a 401(k) option with a cost -- 1,400 plus $28 per employee annually -- that is substantially below the $3,000-to-$6,000 industry average for a bundled small 401(k) plan, a Fidelity spokeswoman says. Fidelity won't say what it charges nonchamber businesses for similar 401(k) bundled service plans.
