MassMutual’s Second Quarter ’09 Retirement Plan Data Shows Renewed Participant Confidence in Equity Investments
Aug 18, 2009
(Springfield, MA) - MassMutual’s Retirement Services Division has just released data indicating that participants in retirement plans administered by MassMutual appear to be gaining confidence in the stock market.
Continuing a trend that began in mid-March, participant assets are gradually shifting back into equities and asset allocation investments. In the second quarter of 2009, the greatest proportion of participant assets (38.7%) is in equities vs. stable value options (31.7%). This is a reversal from the first quarter during which the highest proportion of assets was in stable value (36.3%) vs. equities (35.1%). Overall, equities and stable value options account for more than 70% of total assets in the second quarter, with assets in asset allocation options also continuing to increase gradually, now representing almost 22% of total assets.
Call center volume has normalized in this quarter after two consecutive quarters of increased activity. While calls regarding loans have increased by approximately three percentage points to 11%, only 0.24% of participants actually initiated a loan, indicating that participants are borrowing against their retirement account as a “last resort”.
MassMutual also reports that older participants are saving, on average, three percentage points more than participants under age 30. Among MassMutual participants who increased their savings rate in the second quarter, they did so at an average of almost four percentage points. More than 90% of participants made no changes to their savings rate in the second quarter 2009, while 2.1% of participants actually increased their deferral rate.
MassMutual’s participant education website, RetireSmartSM Academy, has seen a 29% increase in activity, with most of the site’s visitors reviewing the accumulation-stage material rather than pre-retiree or retiree material. “All indications are that we are attracting many younger participants who are very interested in saving for retirement,” says Heather Smiley, vice president of marketing communications for MassMutual’s Retirement Services Division.
MassMutual noted that 19% of participants made a change to their asset allocation in the second quarter, vs. 25% in the first quarter of 2009 and 20% in the fourth quarter of 2008.
“MassMutual continues to invest heavily in participant education, and we are launching a direct mail campaign this quarter aimed at helping participants understand the importance of appropriate diversification,” adds Elaine Sarsynski, executive vice president of MassMutual’s Retirement Services Division and chairman and CEO of MassMutual International LLC. “Appropriate asset allocation is an important topic that can have a positive impact on a participant’s overall accumulation for retirement.”
For more information regarding MassMutual Retirement Services, please call your retirement plan advisor or contact MassMutual at 1-866-444-2601.
MassMutual’s Retirement Services Division has been serving retirement plans for more than 60 years. It offers a full range of products and services for corporate, union, nonprofit and governmental employers' defined benefit, defined contribution and nonqualified deferred compensation plans. It serves approximately one million participants.
Founded in 1851, MassMutual is a leading mutual life insurance company that is run for the benefit of its members and participating policyholders. The company has a long history of financial strength and strong performance, and although dividends are not guaranteed, MassMutual has paid dividends to eligible participating policyholders every year since the 1860s. With whole life insurance as its foundation, MassMutual provides products to help meet the financial needs of clients, such as life insurance, disability income insurance, long term care insurance, retirement/401(k) plan services, and annuities. In addition, the company’s strong and growing network of financial professionals helps clients make good financial decisions for the long-term.
MassMutual Financial Group is a marketing name for Massachusetts Mutual Life Insurance Company (MassMutual) and its affiliated companies and sales representatives. MassMutual is headquartered in Springfield, Massachusetts and its major affiliates include: Babson Capital Management LLC; Baring Asset Management Limited; Cornerstone Real Estate Advisers LLC; The First Mercantile Trust Company; MassMutual International LLC; MML Investors Services, Inc., member FINRA and SIPC; OppenheimerFunds, Inc.; and The MassMutual Trust Company, FSB.