Personalized, actively managed investment strategies are designed to help retirement plan participants who need investment guidance
ENFIELD, Conn. – As asset allocation strategies become increasingly popular, MassMutual has teamed up with Envestnet Retirement Solutions, LLC (ERS) to introduce managed accounts, providing personalized, professionally managed investment strategies to help participants in 401(k)s and similar retirement savings plans reach their retirement goals.
Envestnet Retirement Solutions, LLC is a federally registered investment advisor and is the investment manager for managed accounts. ERS is a subsidiary of its parent company, Envestnet, Inc. (NYSE: ENV). ERS and Envestnet, Inc. are not affiliated with MassMutual or any of its subsidiaries.
With RetireSmartSM Ready Managed Path Managed Accounts, the participant’s retirement account is actively managed by ERS on an ongoing basis to ensure that the investments remain appropriate for the participant’s objectives. RetireSmartSM Ready Managed Path is designed to help participants who need investment guidance and who may not want to actively manage their retirement investments on their own. The managed account investment strategies are built from investment options already available through a plan sponsor’s retirement savings plan.
Employers that sponsor retirement plans administered by MassMutual will be able to use RetireSmartSM Ready Managed Path in two ways: personalized investment strategies available for selection by participants or as a Qualified Deferred Investment Alternative (QDIA) available in plans that automatically enroll employees or when participants otherwise fail to select investments. RetireSmartSM Ready Managed Path is available as a participant investment option now and will be available for use as a plan’s QDIA this fall.
“We believe MassMutual offers better managed account solutions because ours takes a more customized, more accurate approach to investment strategy construction and management,” said Tina Wilson, Senior Vice President, Product Management. “RetireSmartSM Ready Managed Path is connected to our PlanALYTICSSM engine that measures retirement readiness for individual participants based on real data.”
MassMutual’s introduction of managed accounts reflects the growing popularity of asset allocation strategies such as target date funds as participants cede management of their retirement assets to investment professionals. MassMutual’s recordkeeping data shows that the percentage of assets within asset allocation strategies increased by 26.2 percent in the last five years.
“Asset allocation strategies such as managed accounts and target date funds are becoming increasingly popular as more retirement savers want professional help in managing their retirement savings,” Wilson said. “Investment selection and asset allocation become increasingly important as savers draw closer to retirement, especially for those within 20 years of their planned retirement date. Professional management can make a significant difference, both in growing assets as well as preserving assets.”
Participants can enroll in RetireSmartSM Ready Managed Path online through the MassMutual RetireSMARTSM Ready Tool after establishing a separate advisory account with ERS, according to Wilson. No other paperwork is required, she said.
The tool gathers information about each participant’s current age, target retirement age, risk tolerance, existing savings and future retirement needs, including whether or not he or she has a defined benefit plan. Retirement readiness projections – and managed account portfolio construction – are based on a participant being able to replace at least 75 percent of his or her pre-retirement income, including full Social Security benefits.
“The projections for retirement readiness are used as the foundation to build RetireSmartSM Ready Managed Path’s personalized investment strategies,” Wilson said. “The more accurate the data used to construct the strategy, the more effective the strategy should be in helping participants retire on their own terms.”
RetireSmartSM Ready Managed Path is available to MassMutual Retirement Services’ retirement plans with $5 million or more in retirement assets under management.
For more information about MassMutual’s Retirement Services Division, please contact your financial professional or call MassMutual at 1-800-874-2502, option 4.
Founded in 1851, MassMutual is a leading mutual life insurance company that is run for the benefit of its members and participating policyowners. 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 policyowners consistently 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, LLC, Member FINRA and SIPC; OppenheimerFunds, Inc.; and The MassMutual Trust Company, FSB.