MassMutual Finds Improved Savings and Investing

For MassMutual 58.4% of total DC participants are in the Generation X and Generation Y cohort (born between 1965 and 1995), and are continuing to gain on numbers of Baby Boomers who now account for just 38.5% of participants on MassMutual’s platform. For 2013, the percentage of combined assets controlled by Gen X and Gen Y (34.2%) is still below that of Baby Boomers (60.2%), but that gap is gradually closing. At year-end 2012, Gen X/Gen Y held 31.9% of defined contribution assets compared to Baby Boomers at 60%.

Women continue to close the gap in retirement plan account balances as well as in savings rates compared to those of their male counterparts. According to the fourth quarter 2013 data, the average deferral rate for female participants was 5.30%, up from 5.25% in third quarter of 2013. Male participants are saving at 5.67% on average, up from 5.60% in the third quarter.

While the average account balance for women still trails that of men by 37.4%, compared to 38.25% at the end of 2012, it continues to improve. The current level marks a significant improvement over the highest recorded gap level of 40.5% in the fourth quarter of 2008. Based on participants with gender information in Fidelity’s system, 40% of participants are female and 60% male, Fidelity tells PLANSPONSOR.

"We see many positive trends in our data overall, and it's particularly gratifying to see that women and Gen X/Gen Y savers are taking such positive action steps," says Elaine Sarsynski, executive vice president of MassMutual's Retirement Services Division and chairman of MassMutual International LLC.

Investments in asset allocation funds more than doubled since 2007 and are at an all-time high at MassMutual. Overall, participants had 26.5% invested in asset allocation investments at year-end 2013, compared to 25% at year-end 2012.

Importantly, two out of every three MassMutual participants who are invested in lifecycle or target-date options are 100% invested in that single option, showing these participants are using these options as intended. Also, 51.9% of assets for Gen Y and 31.4% of assets for Gen X are in asset allocation investments, indicative of very strong use of target-date options. Fidelity says 23.9% of assets for Baby Boomers are invested in asset allocation funds.

"We are thrilled to see such a high acceptance of asset allocation funds, as they are specifically designed to simplify the investment decisions for participants," adds Sarsynski.

MassMutual serves approximately 2.6 million participants.