T. Rowe Price acquires Black & Decker contract Mutual fund company to manage retirement plan for toolmaker

September 25, 1996|By Bill Atkinson | Bill Atkinson,SUN STAFF

T. Rowe Price Associates Inc. won the job of managing Black & Decker Corp.'s $325 million retirement savings plan, beating out some of the biggest names in the mutual fund business, the company said yesterday.

The Baltimore-based mutual fund company was picked over Fidelity Investments Inc., the nation's largest mutual fund concern, the Vanguard Group and Dreyfus Corp. to manage the plan that has 10,000 participants who contribute about $15 million annually.

"It is a sizable opportunity," said Keith Lewis, vice president of national account sales for Price. "They will be one of our top 20 relationships in the full-service area."

Price won the business after Black & Decker put it up for bid about four months ago, said Ray Brusca, Black & Decker's vice president of benefits.

The Towson-based tool and appliance maker had been using State Street Boston Corp. to manage a portion of the funds and keep records of how much was being invested by Black & Decker employees. Price managed the other portion of the account, he said.

Brusca said Price won because the company has strong name recognition, a large offering of mutual funds and a good investor education program.

"They seem to be very aggressive in going after the business," Brusca said.

Brusca said Price agreed to work with Black & Decker to get more employees involved in savings for their retirement. He said 57 percent of Black & Decker employees participate in the company's 401(k) plan.

"It is still a far cry from where it should be," Brusca said.

Price wasn't the lowest bidder, he said.

"When you shop for price you get what you pay for," he said. "It was the best value for the money we were paying."

Black & Decker employees will have eight investment options under Price, including the New Horizons Fund, which was closed to new investors in June after it was flooded with money. The prior plan offered only three investment options. Price also will maintain records of employee investments, field questions and teach the employees about investing.

Joan Solotar, an analyst with New York-based Donaldson Lufkin & Jenrette Corp., said Price is striving to build its retirement business because that is where it sees future growth.

"T. Rowe is clearly one of the premiere players in the 401(k) market," she said. "The question is did they have to bid incredibly low for the business."

Price manages $87 billion in total assets of which $20 billion is in 401(k) plan assets. The company's 401(k) business has more than tripled in assets in the last five years as more companies have begun offering such plans instead of pensions. Price is betting that its 401(k) business will keep booming. It unveiled a plan nine months ago for a major expansion in Owings Mills largely to handle growth in the retirement business.

Pub Date: 9/25/96

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