Exclusive: Wal-Mart keeps Bank of America to run $18 billion 401(k) plan
By Lauren Young
NEW YORK (Reuters) - Wal-Mart Stores Inc (WMT.N: Quote) is sticking with Bank of America's (BAC.N: Quote) Merrill Lynch unit to run its 401(k) program with $18 billion in assets, Wal-Mart confirmed on Tuesday.
Earlier this year, the Bentonville, Arkansas-based retailer put its retirement plan - the largest private plan in the U.S. in terms of participants - up for review.
As first reported by Reuters, the company considered switching to Wells Fargo & Co (WMT.N: Quote) to oversee the 401(k) plan. It is unclear if other plan providers were in the running.
Bank of America (BAC.N: Quote), the No. 2 U.S. bank had not responded to requests for comment. Wells Fargo, the No. 4 U.S. bank by assets, declined to comment.
The average Wal-Mart employee has about $18,000 in their retirement account, according to BrightScope, which tracks and rates retirement plans. That's much smaller than the average worker's account balance of about $84,000 at the end of the third quarter, according to Fidelity Investments, one of the largest retirement plan providers. Yet Wal-Mart's massive size makes it one of the most coveted clients in the retirement industry.
Wal-Mart, the world's biggest retailer, has more than 1.2 million people participating in its retirement plan.
BrightScope currently rates Wal-Mart's 401(k) plan as average compared to its peers, noting that it has very low management fees, average participation but below-average account balances.
Keeping the Wal-Mart plan, which Bank of America has serviced for more than 15 years, is a major coup for the bank as it tries to woo large companies to its platform. Continued...