MassMutual and Envestnet Retirement Solutions, LLC (ERS) have teamed up to provide managed accounts that allow participants in 401(k)s and similar retirement savings plans to access personalized, actively managed investment strategies within their plans.
With RetireSmart Ready Managed Path managed accounts, the participant’s retirement account is actively managed by ERS on an ongoing basis to make sure investments remain appropriate for the participant’s objectives.
The managed accounts, which are available to retirement plans with $5 million or more in retirement assets under management, are designed to help participants who need investment guidance but 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 can use the managed accounts in two ways: as 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.
Asset allocation strategies such as target-date funds are becoming increasingly popular as participants turn over management of their retirement assets to investment professionals.
According to MassMutual’s recordkeeping data, the percentage of assets within asset allocation strategies increased by 26.2 percent in the last five years.
Participants can enroll in the managed accounts online through the MassMutual RetireSMART Ready Tool after establishing a separate advisory account with ERS, without having to do any other paperwork.
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 preretirement income, including full Social Security benefits.
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