MassMutual’s Second Quarter ’09 Retirement Plan Data Shows Renewed Participant Confidence in Equity Investments
(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.
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