GOLD RETIREMENT WINNER………By most measures, Lucent Technologies Inc.'s 401(k) retirement plan was a very good one: an employee participation rate of almost 90%–well above the industry norm of 66%; an array of cost-effective, professionally managed, institutional-quality investment options; and an award-winning participant education effort–"401(k) cafes"–where employees could gather and learn about Lucent's 401(k) plan.

But for Lucent, "very good" was just not good enough. Lucent Asset Management Corporation (LAMCO) felt it could do better with the company's $7.1 billion voluntary 401(k) plan, which LAMCO oversees along with the company's $34 billion defined benefit (DB) plan that covers the company's retirees. "The 401(k) plan was–and remains–an excellent one," says Bradford Wakeman, LAMCO's director of public market investments. "At the crux of this initiative was a conviction in continuous improvement and trying to better align the defined contribution plan to the defined benefit plan." Adds Mark Gibbens, Lucent vice president and treasurer, "It was a matter of the team taking [the 401(k)] to the next level."

Specifically, data showed that participants could be helped by personalized advice: 83% hadn't changed their allocations in a year, suggesting a decision-making process that was on autopilot. Even more troubling: 15% of the particpants had their holdings in a single investment option, which in most situations is a definite no-no. Lucent leadership wanted to offer the 75,000 DC participants the kind of tailored investment and asset allocation advice available to wealthy and institutional investors.