MassMutual has announced a new partnership with registered investment advisory Envestnet Retirement Solutions.
Chicago-based ERS, a subsidiary of Envestnet, Inc., provides open-architecture platform technology for RIA advisors to plan sponsors.
In partnering with MassMutual’s proprietary Fiduciary Assure program, ERS will give fiduciary support for MassMutual advisors who serve retirement plan sponsors.
In a statement, MassMutual did not reference the recently finalized Department of Labor fiduciary rule, which will require all advisors to plans with less than $50 million in assets to act as fiduciaries.
Tina Wilson, senior vice president of MassMutual Retirement Services, only said, “the latest enhancements are part of an ongoing program to provide more robust fiduciary support.”
According to new marketing literature for the Fiduciary Assure program, ERS uses a “quantitative and qualitative” selection methodology to assure the investments sponsors offer meet their fiduciary requirements to act in participants’ best interests under the Employee Retirement Income Security Act.
ERS then develops an Approved List and a Select List of investment options for sponsors and advisors to choose from.
The Approved List represents a “broad range of investment options” that satisfies ERISA’s requirement that plan fiduciaries offer at least one investment option from each core asset class—domestic equity, international equity, fixed income, and cash or a cash equivalent investment.
The Select List broadens the options under each subset of required options, “and can be chosen in its entirety” for a plan’s investment lineup, according to the marketing material.
ERS then provides sponsors with a quarterly report to assist in their monitoring requirements as fiduciaries.
In acting as a 3(21) fiduciary, ERS serves as an investment co-fiduciary for the investment options on its Approved List.
In offering that advice for a fee, ERS accepts fiduciary responsibilities “only for the investment selection and monitoring of the investments” on the Approved and Select Lists.
Under ERISA, the 3(21) advisory designation is less comprehensive than the 3(38) designation, which gives advisors discretion over plan assets.
Under the Fiduciary Assure program, ERS will not assume “discretion, authority or control over plan assets,” according to an explanation in MassMutual’s marketing material.
In a statement, MassMutual said it also plans to expand its 3(38) fiduciary program, but did not provide a specific timeline.
Recent proprietary research from MassMutual showed 61 percent of plan sponsors who work with an advisor are concerned about their fiduciary obligations.
One in two plan sponsors said they were not fiduciaries or were unsure of their fiduciary status, underscoring the need for greater sponsor support, according to MassMutual.
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Nick Thornton
Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.
