MassMutual's Retirement Plan Participants Exhibiting 'Stable' Behavior

Aug 31, 2010, 17:33 ET from MassMutual Retirement Services

SPRINGFIELD, Mass., Aug. 31 /PRNewswire/ -- MassMutual's Retirement Services Division has released data for the quarter ended June 30, 2010 indicating that participants in retirement plans administered by MassMutual showed no signs of panic despite the decline in the S&P 500 Index, with 96% of participants either maintaining or increasing their savings rates.

This behavior helps explain why, despite the fact that the stock market was down sharply for the second quarter with the S&P 500 Index losing 11.4%, MassMutual's average participant account balance declined by only 3.26%, beating the S&P 500 Index by 8.14%.

The substantially better performance for participant accounts is primarily attributable to the benefits of continued ongoing deposits by participants and an increased percentage of assets allocated to stable value and bond investments. Male participants fared slightly better than females for the quarter (-2.7% compared to -5.5%) primarily as a result of the impact of higher average deferral rates.

The percentage of participant assets in equity investments declined from 41.1% to 38.4% during the quarter, with stable value increasing from 26.3% to 28.4%, and investment in bonds increasing from 7.6% to 8.6%. The percentage in asset allocation investments (target date and target risk) was relatively unchanged.

"We are pleased to see that our participants are holding their course," says E. Heather Smiley, chief marketing officer for MassMutual's Retirement Services Division. "Participant behavior is consistent with MassMutual's overall educational message and it appears that MassMutual participants are listening," she adds.

The asset allocation gap by gender during the quarter closed further. Males continue to be slightly more aggressive with their portfolios than females, but not by a large percentage. On average, males have about 2% more in equities than do females, while females have 2% more than males in stable value and bonds. Historically, females have had lower percentages in asset allocation investments than males. Females have gradually moved some of their assets from stable value to asset allocation and, as such, percentages in asset allocation investments by males and females are virtually the same at approximately 23%.

Deferral percentages are highest for participants closest to retirement with participants over age 60 contributing at 7.2%, roughly double the rate of participants under age 30. Visits to MassMutual's participant website remained virtually unchanged compared to the prior two quarters. There were 3.6 million participant website visits, with asset allocation, rebalancing and tax implications of withdrawals being the most popular topics among participants who visited MassMutual's RetireSmart Academy education site.

Call center activities increased by 5.2% for the quarter and, while MassMutual participants exhibited a very slight increase in loan and withdrawal activity compared to an unusually low first quarter 2010, only about 2.5% of MassMutual participants actually initiated a loan or withdrawal during the quarter.

"Our participants do seem to understand that taking a loan or withdrawal from their retirement plan account should be considered a last resort," says Elaine Sarsynski, executive vice president of MassMutual's Retirement Services Division and chairman and CEO of MassMutual International LLC. "Our call center representatives are doing a fantastic job in helping participants made good decisions based on accurate information that is specific to the individual participant," she adds.

MassMutual's data covers approximately one million participants across more than 6,000 plans.

For more information regarding MassMutual Retirement Services, please call your retirement plan advisor or contact MassMutual at 1-866-444-2601.

About MassMutual

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) [of which Retirement Services is a division] 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.

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Contact:  Lisa Reilly


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