Houston-based BMC Software is removing and adding various funds in its $410 million 401(k) lineup. Carol Ambuhl, benefits manager, said the company will drop two or three large-cap funds and add a small-cap fund, mid-cap fund and index fund, all three of which will be new asset classes for the lineup. She declined to name the firms in play. Ambuhl said the company had five or six large-cap funds, which was too many for the company’s taste. BMC also wanted more diversity in the plan.
The company wants to keep three out of the original group of large-cap funds, but there is no decision yet on which ones. She said the assets from the soon-to-be dropped funds will be mapped over to the remaining funds, but she did not want to disclose how much money is invested in each one.
As for the new additions, Ambuhl said the company issued a request for proposals late last quarter and heard back from 12 fund firms. BMC has now narrowed its choices to two. She declined to detail the selection criteria, nor is there a timeframe for a decision. Ambuhl said her firm did not use a consultant. Once the lineup is finalized, the company will have 21 investment options.
Separately, BMC is adding a brokerage window from its recordkeeper Fidelity Investments. The company also will implement five-year increments, in addition to the ten-year increments for the target-date funds it offers to employees.