|
July 27, 2001
All-SRI 401(k) Plan Debuts
by Mark Thomsen
Seventeen social mutual funds compose a new, diversified plan that can also be customized to client
needs.
SocialFunds.com --
1Point Administrative Services, a broad-based benefits administration firm based in Nashville,
Tennessee, this week introduced the SR401K Plan,
a 401(k) plan comprising only socially responsible mutual funds. The fully diversified plan offers
large-, mid- and small-cap funds as well as an international fund, a global fund and a fixed-income
fund. 1Point can also customize the plan for clients to include standard funds as well.
 "We are pleased to be able to launch this
innovative, socially responsible 401k plan," said Barry Stokes, President of 1Point. "1Point has
specialized in creating customized, daily valuation 401k platforms, and this particular platform
will meet the needs of a growing number of sponsors and participants who value socially responsible
investing."
The participating fund companies are Ariel, Calvert, Citizens, Domini, IPS,
Meyers Pride Value, Neuberger Berman, Parnassus and Women's Equity. In addition to offering
diversification, 1Point also provides asset-allocation models from which participants may choose.
These models are created for Income, Conservative Growth and Aggressive Growth.
An all-SRI
401(k) plan may raise some eyebrows among those familiar with fiduciary responsibility and its
legal interpretations. The U.S. Department of Labor's Pension and Welfare Benefits Administration
(PWBA) issued an official Advisory Opinion, sometimes known as the "Calvert letter," in 1998
regarding the offering of socially responsible mutual funds in certain retirement plans. The PWBA
basically said that a socially responsible mutual fund could be offered only if the plan's
fiduciary determined that the fund's expected return would be commensurate to other investments
having similar risks.
In the past, many have taken this as saying an all-SRI retirement
plan would not meet government standards of fiduciary responsibility. Stokes believes that this
interpretation seems to automatically assume that social funds under-perform their peers. In an
analysis of the plan's funds as compared to their Morningstar-defined peer groups, 1Point found
that 13 out of the plan's 17 funds were ranked in the top half of their respective peer groups over
a 3-year period.
For potential clients that still want to offer plan participants greater
variety, 1Point can include non-SRI funds in the SR401K as well. "Because 1Point is a provider of
customized 401(k) platforms, we do have the ability to take the fund offerings of the SR401K Plan
and add additional fund offerings," said Stokes. "We would be happy to do so for any sponsor that
still may have concerns regarding the Advisory Opinion."
1Point is offering the plans to
public, private, and non-profit organizations. The fee structure for SR401K is $1,000 per year for
record keeping services and $30 per participant per year, regardless of the number of funds in the
plan. 1Point also administers 457 plans for governmental bodies, and funds in the SR401K can be
utilized in a 457 plan.
Regarding the size of plan, 1Point can handle any number of
participants. But it primarily deals with plans that have under $25 million in assets.
1Point says its strategy is to focus on niche markets. Next month, it is planning to release a
Catholic values-based 401(k) plan. But with socially responsible investing expanding through
peer-beating performance and growing acceptance among investors, 1Point is hoping the market for
the SR401K Plan goes beyond "niche" status in the not-too-distant future.
©
SRI World Group, Inc. All Rights Reserved.
Top
| 
