Fidelity 'e401k' Now Available to Small Businesses Via the Internet.

MARLBOROUGH, Mass.--(BUSINESS WIRE)--Oct. 14, 1999--

The country's first Internet-based 401(k) plan is now available to the more than 2 million small businesses in America that currently do not offer a retirement plan to their tens of millions of workers.

Fidelity Investments(R), the nation's largest provider of 401(k) plans, said it has invested millions of dollars to develop "e401kSM " to help meet the retirement needs of small businesses. Information on e401k, which is offered and serviced via the Internet, is accessible directly at fidelitye401k.com or through Fidelity's 401k.com and fidelity.com web sites.

"The new e401k plan now puts retirement planning on the radar screens for small business owners and their millions of employees who haven't had the option to save through workplace programs," said Peter J. Smail, president, Fidelity Institutional Retirement Services Company. "e401k makes it easier for smaller businesses to offer what current and prospective employees will see as a `big company' benefit at an affordable cost.

"Offering a 401(k) has become increasingly important for small businesses to attract and retain talented workers in today's competitive labor market," Smail said.

Since Fidelity announced e401k in the spring, more than 200 companies have inquired about it and about two dozen firms are in the process of signing on for it since the web site has been available.

"The e401k is exactly the kind of product that works for our company," said Christopher Baucom, chief financial officer, Giage, Ltd., a software company located in Cincinnati. "Our employees are finding it quite easy to go online with e401k and not only enroll in the plan, but view their accounts and answer questions day or night. Using the web makes it easy to put a great retirement plan in place."

Once the plan has been established, small companies can do everything associated with a 401(k) plan entirely over the Internet. With fidelitye401k.com's interactive capabilities, they can design and introduce the plan to their workers. Workers can educate themselves about the plan and enroll online. They can monitor and manage their 401(k) accounts on an ongoing basis. Additionally, employers can administer their plans online. All of these functions can be done with the convenience of the Internet.

"We designed e401k with the features and functions necessary to meet the needs of small businesses," said Guy Patton, executive vice president of Fidelity's small business 401(k) unit. "The efficiencies provided by the Internet, combined with our plan design, have allowed us to deliver a 401(k) plan to small businesses that is superior to what's affordable to them today."

Small businesses represent the last untapped segment of the 401(k) business. Fidelity estimates that only about 15 percent of America's small businesses offer a 401(k), primarily due to costs. Fidelity said its e401k addresses that issue, with plan costs of $750 at set-up and annual recordkeeping and trustee fees of $1,750, plus $20 per plan participant.

Fidelity's Emerging Corporate Market unit is the leader in the small business retirement plan market and has about 650 employees focused on serving this market segment. Currently, Fidelity provides 401(k) plans to about 6,000 small companies.

fidelitye401k.com

The fidelitye401k.com web site is designed to be user-friendly and offer general information about 401(k) plans. The web site includes five key areas necessary to start a plan: investment options, employee services, recordkeeping, compliance support, and total plan cost.

Investment Options - Within the investment options section, there is extensive information about the 25 mutual funds available in Fidelity's e401(k), which allow for a diversified portfolio. The options comprise seven growth funds; two equity income funds; one growth and income fund; two international funds; four aggressive/small company funds; one balanced fund; two income funds; one money market fund; and the five Fidelity Freedom Funds(R). The section provides performance information on each fund and a tutorial about how to construct a well-balanced portfolio.

Employee Services - With e401k, plan participants interact directly with Fidelity over the Internet through the Fidelity NetBenefits online service. e401k offers education and planning materials to help participants get started in saving for retirement. In fact, through the online "planning center," participants have access to savings information and calculation tools to answer questions such as, "How much should I save?" It also features information about target asset mixes.

Within the employee services area of the web site, plan participants enroll in their company's e401k plan. Here they sign-up to participate, decide how much to contribute through automatic payroll deductions, and explore and select investment options.

On an ongoing basis, plan participants will use NetBenefitsSM to review their account balances, conduct exchanges among investment options and generate online statements.

Recordkeeping - Using Fidelity Plan Sponsor WebStation(SM), plan sponsors are able to access the latest news and events that ultimately impact their plan; view current plan data; submit plan data and update participant information online; and order plan level reports and view them online.

Compliance Support - Fidelity's e401k helps plan sponsors address their fiduciary obligations. This support includes IRS approved plan documents, non-discrimination testing, tax reporting and filing, and trustee services.

Total Plan Cost - In the total plan cost area of the web site, Fidelity provides plan sponsors with a discussion of the various costs associated with offering a 401(k) plan. It also provides a worksheet that allows small business owners to compare the costs of e401(k) with other plans they may be considering.

Additionally, the web site offers background information for small business owners who need to learn about the basics of 401(k)s.

Once an employer has determined an interest in e401k, the web site helps them design a plan allowing for certain choices related to plan features such as percentage of employee eligibility, company match, profit sharing, and vesting schedules.

Fidelity Investments is the nation's largest mutual fund company and a leading provider of financial services. Fidelity offers investment management, retirement, brokerage and shareholder services directly to individuals and institutions, and through financial intermediaries. The firm also is the No. 1 provider of 401(k) retirement savings plans, the second largest discount brokerage firm and the third largest provider of 403(b) retirement plans for not-for-profit institutions in the United States. At August 31, 1999, Fidelity had total managed assets of $846.0 billion.

For more complete information about Fidelity Mutual Funds, including charges and expenses, call or write for a free prospectus. Read it carefully before you make your investment choices.

Fidelity Institutional Retirement Services Company, a division of Fidelity Investments Institutional Services Company, Inc., 82 Devonshire Street, Boston, MA 02109.