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Fidelity to launch 'Net 401k
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March 2, 1999: 8:01 p.m. ET
Investment giant to offer retirement savings plan online to small businesses
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NEW YORK (CNNfn) - Fidelity Investments, the largest fund family in the U.S., announced plans Tuesday to introduce a 401(k) plan for small businesses to be sold and serviced exclusively over the Internet.
Many small business do not offer 401(k) retirement plans because they are complex to administer and are not widely available to the nation's smallest businesses.
Fidelity hopes to lower administration costs by offering the plans over the Internet. The company has seen impressive growth in its 401(k) sales to small companies in the past year and looks to continue the trend with the new plan.
According to Fidelity, the number of participants accessing 401(k) accounts over the Internet has skyrocketed to 100,000 per day, up from roughly 10,000 a year ago.
The small business Internet 401(k) plan, termed "e401k," will be launched sometime this summer.
"Internet access is probably the most important factor in selecting our e401k," said Guy Patton, executive vice president of Fidelity's small business 401(k) unit. "The e401k will be particularly appealing to thousands of professional service, software, engineering, biotechnology and other firms that equip their workers with computers."
Only 20 percent of small businesses currently offer 401(k) plans, according to Fidelity. In today's tight labor market, small businesses are turning increasingly to company-sponsored retirement plans to gain a competitive advantage.
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