The announcement said that the new Benefits Services Alliance will include administration of executive deferred compensation and workplace 529 education savings plans, as well as health and welfare plan services. The companies said that the new effort should increase economies of scale and operating efficiencies for both because of Scudder’s client service experience as well as ADP’s existing transaction processing and rercordkeeping.
As part of the deal, ADP will acquire Scudder’s Salem, New Hampshire and Kansas City, Missouri, retirement plan recordkeeping operations. Scudder Retirement Services will also keep a continuing – but unspecified – financial interest in the future performance of the business.
Approximately 350 employees in the Scudder service centers will join with 510 employees from ADP’s Roseland, New Jersey, and Louisville, Kentucky, retirement centers. Together, they will provide retirement recordkeeping services to a client base of over 30,000 retirement plans representing 1.1 million employees, with $16 billion in assets under administration. ADP’s mega-market, custom retirement services business is not included in the alliance, according to the announcement.
Mark Phillips will lead the Benefit Services Alliance management team. Along with Scott David, he also will be part of a six-person Strategic Advisory Committee comprised of representatives from both organizations that will monitor the alliance’s performance.
As a part of Scudder Investments, Scudder Retirement Services has been servicing defined contribution plans since 1984. With total DC assets under management of approximately $38.9 billion as of December 31, 2002, it administers 15,550 DC plans, including 401(k), 403(b), profit sharing, money purchase pension plans and more.
ADP Employer Services, a division of ADP, Inc., offers both traditional and Internet-based outsourcing products and services. Those services include: payroll, tax regulatory management, benefits administration, time and labor management, retirement plan services, online recruiting, and employment screening and selection.