INTERNATIONAL OPTION: Hewitt changes fund, adds online advice for its plan participants

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LINCOLNSHIRE, Ill. -- Hewitt Associates LLC in July will change one of the 10 funds in its $600 million deferred compensation plan and add Internet-based advice for its participants.

Hewitt will replace an unidentified actively managed international growth fund with another, said Dave Wille, Hewitt's director of total rewards. "We're replacing the international manager with a like fund but different fund manager where the performance is better," Mr. Wille said. He would not identify the funds or the managers.

At the same time, Hewitt will be adding online investment advice provided by mPower, San Francisco.

Hewitt, through a recently announced arrangement with mPower, already is offering investment advice to the defined contribution plan sponsors it services. Hewitt is the first plan sponsor to sign on for the service, said Lisa Messena, mPower's director of marketing.

The fund swap follows Hewitt's January overhaul of its deferred compensation program, when Hewitt increased the company match. It also now makes three separate contributions into the plan that go into separate accounts: the company match to the 401(k) account, a contribution into a profit-sharing account and another contribution into a deferred contribution account, Mr. Wille said.

The match, which had been 50 cents on the dollar is now dollar-for-dollar up to the first 2% of base pay. Hewitt also changed the basis of the annual profit-sharing contribution, generally ranging up to 5%, from base pay to base plus variable pay.

The profit-sharing contribution is vested immediately, and employees can take it in cash, as a before-tax contribution to the employee's deferred compensation account, or as a 50/50 split, Mr. Wille explained.

The annual deferred compensation contribution is between 5% and 6% of total pay, which also was changed from base pay, he said. The exact percentage is determined annually, Mr. Wille added.

Hewitt's deferred compensation and profit-sharing contributions combined range between 6% and 10% of employees' total pay. About half of the $600 million in the 401(k) plan is from the company match, he said.

Mr. Wille declined to identify the investment managers or list the funds in Hewitt's plan. Right now, the plan's fund lineup includes fixed income, Standard & Poor's 500, balanced, large-cap value, large-cap growth, small-cap growth, emerging markets and international growth.

The mPower online advice component is not the first time the company has offered investment advice to its employees, Mr. Wille said. Hewitt provides periodic personal investment seminars.

Hewitt executives conducted a six-week pilot test with around 40 employees ranging from customer service representatives to actuaries, he said. The pilot started before Hewitt's arrangement with mPower was announced and was completed after the announcement, he added.

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