Arco Transfers Management of Savings Plan : Securities: The company places an employee fund with an outside manager because of a 5.3% loss from derivatives.

Atlantic Richfield Co. has transferred management of its Money Market Plus employee savings fund to an outside manager, in the wake of a steep loss the fund incurred in April because of derivative securities.

The fund’s 5.3% principal loss, reported in The Times last week, cost employees about $22 million of the $400 million they had invested in the fund. Arco has said it is seeking government approval to reimburse employees for the loss.

Arco spokesman Al Greenstein confirmed Wednesday that the fund is now being directed by an outside money manager, which he declined to identify.

The Money Market Plus fund had been run by Arco Investment Management Co., an Arco subsidiary that manages $1.5 billion in employees’ retirement savings and regular savings. The subsidiary continues to run the savings plans’ three other funds.

Greenstein declined to comment when asked if the Arco Investment Management employee directly responsible for the Money Market Plus fund was still with the firm.

Meanwhile, Arco this week gave employees more details on the derivative securities that had caused the surprise April loss in the fund, which had been marketed within Arco as an investment managed for “stability of principal.”

Derivatives are often-complex investments whose value is derived from underlying baskets of stocks, bonds or other securities, or from changes in interest rates, currency values or commodities.

Derivatives have exploded onto the financial scene in recent years, and they have been widely used by investment funds and corporations to make market bets or hedge. But since March several major companies have reported large losses in derivatives, mostly because of wild swings in interest rates.

Arco said the derivatives that clipped the Money Market Plus fund were corporate notes and bank certificates that repaid principal only if market interest rates remained in a certain range. Because rates soared in April, the fund wasn’t entitled to repayment of the notes and certificates in question, Arco said.