American Skandia Exits Recordkeeping

March 19, 2002 ( Skandia has announced that it will be exiting the defined contribution recordkeeping business, citing a strategic initiative the company plans to undertake to focus on its largest and most profitable mutual fund segments. Additionally, the company will be curbing its variable life insurance division.

The company will not be accepting new qualified plan clients after July. However, the company will continue to service its exiting clientele.

Mutual fund, variable annuity and wrap products made up more than 90% of American Skandia’s sales and all of its profits. After a review, the company determined that achieving scale in these lines would be too time consuming. Going forward, the company plans to expand its core product line by increasing its sales force by 40%.

Forty employees have been displaced by this change, about 3% of American Skandia’s workforce. The company expects to place these individuals in other positions within the company.