Honeywell managed to update the investment offerings in its $9.7 billion 401(k) plan last year while maintaining the plan's low-cost structure despite obstacles thrown up by the financial markets turmoil.

At the end of 2007, Honeywell's savings plan had 11 investment choices; the offerings used an indexed approach and were almost all commingled funds or separate accounts. The lineup, unchanged for more than 10 years, included a set of three lifestyle funds that provided conservative, moderate and aggressive investment options.

When employees were automatically enrolled in the savings plan, the default investment was the short-term fixed income fund. Given new regulations about default investments, Honeywell decided to add target-date funds to the lineup and use them as the default, while eliminating the lifestyle funds to avoid any confusion among participants. "The goal was to eliminate what could be perceived as some duplicate offerings," says Charlie Malone, U.S. leader of savings plan investments at Honeywell. After considering providers of target-date funds and the asset allocations they use over time, Honeywell settled on Barclays LifePath funds.

Continue Reading for Free

Register and gain access to:

  • Thought leadership on regulatory changes, economic trends, corporate success stories, and tactical solutions for treasurers, CFOs, risk managers, controllers, and other finance professionals
  • Informative weekly newsletter featuring news, analysis, real-world cas studies, and other critical content
  • Educational webcasts, white papers, and ebooks from industry thought leaders
  • Critical coverage of the employee benefits and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.