First Union Securities reps are enjoying an enhanced deferred compensation plan.
The revamped program has been in place since Jan. 1, according to brokers. The firm changed its plan from an interest-bearing arrangement to one with a mix of 25 to 30 outside and proprietary funds, as well as First Union stock.
A firm spokesperson declines to confirm details of the new investment options.
“Obviously, it's better with the expanded universe of mutual funds,” says a First Union rep on the West Coast. “The interest rate [on the First Union plan] was not the turbo rate that PaineWebber pays, so the plan wasn't a great deal. It was OK, but nowhere near what you could [earn] on mutual funds.”
“Any time a firm extends the diversity of funds [in a deferred comp plan], it's a major positive,” a Midwest rep says. “Flexibility is always nice. With this upgrade, I think our firm is going the right direction.”
The changes were made in conjunction with adjustments to First Union Bank's 401(k) plan, which is adding 25 outside funds to the eight proprietary Evergreen funds employees now have.
In 1999, First Union Bank was hit with several lawsuits from current and former employees regarding how the bank handled its 401(k) plan. Among other complaints, the employees cited First Union's exclusive use of proprietary funds in the plan. Those suits were settled in March.