By Cyril Tuohy
Great-West Financial has announced its entry into the small and midsize nonprofit retirement market with the launch of its Premier and Custom Key 403(b) products.
The initiative represents the Denver-based firm’s latest foray into the retirement plan market
The company’s new Premier and Custom Key 403(b) plans are a “perfect fit” for employees working for libraries, clinics and museums, Marte Werner, co-founder of NWK Group, a registered investment advisor in San Francisco, said in a news release.
More than 200 investment options, including target-date funds, variable investments and fixed income are available under Premier and Custom Key. Plan participants will also benefit from fund performance review, policy statements education materials and relationship manager services, the company said.
Bill Harmon, senior vice president of 401(k) corporate markets, said that after consulting with advisors, the company determined there was enough interest in the nonprofit retirement market to launch the products.
“We agreed that the smaller end of the market was short on quality 403(b) offerings and are confident that our new Premier and Custom Key 403(b) products will be a popular solution,” Harmon said in a statement.
The 403(b) plans are served by the same advisor and recordkeeping teams as the for-profit 401(k) plans, Great-West also said. There are many similarities between 403(b) and 401(k) plans, yet they differ in their contribution limits, catch-up contributions, nondiscrimination rules and funding options, according to retirement plan experts.
Great-West’s latest 403(b) product announcement to target small and midsize nonprofits follows a series of important company developments earlier this year related to its growth in the retirement plan market.
Since Jan. 1, Great-West has hired several veteran managers and sales executives to strengthen its 401(k) retirement services group, and the company has also expanded into the Southeast and Mid-Atlantic with new hires.
In addition, Great-West in June announced multiyear contract renewals and extensions for big public employee retirement programs serving Indiana, Louisiana and Wyoming.
There’s no lack of opportunity in the small and midsize market. A recent LIMRA survey found that as many as 94 percent of small business owners believe the needs for an outside advisor will either remain the same or increase over the next two years.
Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at [email protected].
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