Durham, N.C./Florham Park, N.J. (Jan. 22, 2004) -- A recent survey of chief financial officers from a variety of public and private companies found that 47 percent of their 401(k) plans have been tainted by the recent mutual fund scandal.
The survey found that the avalanche of allegations charging abusive behavior in the $7 trillion mutual fund industry over the past few months has been enough to shake investor's faith and cause companies to make significant changes to their 401(k) plans.
Among those companies affected by tainted mutual funds, 77 percent have already made or may make changes to their respective 401k plans.
The poll, conducted by Financial Executives International and Duke University’s Fuqua School of Business, interviewed 307 CFOs of U.S. companies electronically during the second week of January. CFOs from both public and private companies and from a broad range of industries, geographic areas, and revenues are represented.
Among those companies that have already made changes to their plans, 65 percent of the changes occurred in the fourth quarter of 2003. Among those planning on making changes, 80 percent will occur some time during the first quarter of 2004, the survey revealed.
The most common change is to add new providers to the fund line-up. However, among the firms that have already made changes, almost 47 percent have eliminated all the funds from a “tainted” fund family. Another 25 percent have selectively eliminated the tainted funds, but not the entire family of funds.
-- WebCPA staff
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