SCHAUMBURG, Ill.--Close to 60% of Motorola Inc.'s 72,000 employees opted to join the company's new portable, hybrid defined benefit pension plan.

The rest will stay in the company's $3.4 billion traditional plan.

When the one-time defined benefit plan choice went into effect July 1, Motorola executives also selected a new recordkeeper for its $6.4 billion 401(k) profit sharing plan and managers for that plan's five new investment options from its group of 12 existing managers, said Sheila Forsberg, director of global retirement benefits strategy for the Schaumburg, Ill.-based company.

The investment managers oversee the assets in both the 401(k) and defined benefit plans, she said.

Northern Trust Corp., which manages the index investments in Motorola's pension plans and was trustee for the defined benefit plan, was selected to provide administration and recordkeeping for all of the plans.

Motorola's new portable defined benefit plan is a pension equity plan, a hybrid offering a lump-sum payment that can be taken when an employee leaves Motorola. Employees who worked for Motorola before July 1, 1999, had a one-time choice between the existing defined benefit plan and the new portable plan. Those who were hired after that date, or who failed to choose, were enrolled in the portable plan. The portable plan became effective July 1.

The traditional defined benefit plan was frozen as of June 30, Ms. Forsberg said. Employees' accrued benefit in that plan as of June 30-and any benefit under the Supplementary Contributory Retirement Plan, a plan to which employees made voluntary contributions until Dec. 31, 1977-were added to their benefits earned under the portable pension plan, she said.

"Quite a few older individuals in their mid- to late 60s requested the portable plan," so that they could get lump-sum distributions, Ms. Forsberg said. That feature will make the portable plan a bit more expensive for Motorola, Ms. Forsberg said.

The new defined contribution investments-all separate accounts-more than double the number of options in the plan's menu of investments to nine from four, she said.

The investment options added to the 401(k) plan July 1 were: long-term indexed bond; international indexed equity; midcap indexed equity and small-cap indexed equity funds, all managed by Northern Trust; and a balanced fund run by all 12 investment managers.

The remaining lineup of investment managers is the same. The equity investment managers are: Jennison Associates L.L.C. and Ark Asset Management Co. Inc., both of New York; Lincoln Capital Management and Northern Trust, Chicago; and The Boston Co. Asset Management Inc. and Independence Investment Associates, Boston. The fixed-income managers are Harris Investment Management and Stein Roe & Farnham Inc., both of Chicago; Scudder Kemper Investments Inc., Boston; and Weiss Peck & Greer L.L.C., New York.

The existing investments in the 401(k) plan are a large-cap equity index fund run by Northern Trust; a balanced fund run by all 12 managers; a short-term bond portfolio managed by Scudder Kemper, Stein Roe and Weiss Peck; and Motorola stock, Ms. Forsberg said.

To prepare the employees for making the choice between the defined benefit plans, the company hired Arthur Andersen's Human Capital practice to run a five-month employee education program, Ms. Forsberg said.

The education campaign included 1,300 seminars at Motorola's U.S. offices, a personalized benefit statement, help-line counseling, and an online tool allowing employees to model the differences between the two defined benefit plans, she said.

"We got real nice thank yous from employees," she said. "They were pleased with so much information and in so many different forms."

Those who used the online modeling tool liked it. However, employees needed to have the right computer browser in order to access it, Ms. Forsberg said. A Northern Trust Web site for Motorola employees will be launched Dec. 1.

Arleen Jacobius is a reporter for Pensions & Investments, a sister publication of Business Insurance.