The Springfield, Massachusetts-based provider said that 96% of participants recordkept by the firm either kept their rate of deferral the same, or increased it during the second quarter. That consistency meant that while the S&P 500 Index lost 11.4%, MassMutual’s average participant account balance declined by only 3.26%, according to the firm.
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, according to the firm.
MassMutual noted that male participants fared better than females for the quarter (-2.7% compared to -5.5%), though the firm attributed that primarily to the impact of higher average deferral rates.
The asset allocation gap by gender during the quarter closed further, according to the report. Male participants continued to be somewhat more aggressive in their allocations; on average, males have about 2% more in equities than do females, while females have 2% more than males in stable value and bonds. While historically, females have had lower percentages in asset allocation investments than males, female participants have gradually moved some of their assets from stable value to asset allocation. As such, percentages in asset allocation investments by males and females are virtually the same at approximately 23%, according to the report.
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, according to the report.
"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.
MassMutual's data covers approximately one million participants across more than 6,000 plans.