Women and Generation Y increased deferrals into their defined contribution plans during the first quarter of 2012, according to MassMutual's Retirement Services Division.
Within MassMutual DC plans, 4.22 percent of participants increased their deferral percentage during the first quarter, the second-highest percentage recorded in a single quarter since measurement began in 2007. Younger savers deferred less than older participants, however the savings rates for Gen Y are increasing at an accelerated rate, the company found. Participants age 29 and younger increased their savings by 2.29 percent compared to those over age 60 who increased by only .42 percent. Those ages 40 to 49 increased their savings level by .57 percent to an average deferral rate of 5.27 percent.
MassMutual found that only 1.30 percent of participants decreased their deferral percentage during the first quarter and only 2.98 percent stopped deferring altogether.
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MassMutual also saw a major increase in participation in its target date and risk-based options, with 24.7 percent of total retirement assets under management, which is well above the industry average.
Women continue to favor age-based investments far more than risk-based options, with 72 percent investing in target date funds and only 28 percent investing in risk-based options. Men remain more evenly divided on their preferences, with about 53 percent in age-based vs. 46 percent in risk-based investments.
Women are catching up with men when it comes to retirement assets. The data showed that women's account balances rose nearly 8 percent for the quarter compared to 7.27 percent for men and the average account balances for women now trail those of men by 38.8 percent compared to 40.5 percent in late 2010.
"We believe the positive trends we are seeing in the first quarter reflect MassMutual's true value as a retirement plan provider – helping participants understand what it will take for them to calculate and save towards sufficient income levels in retirement," says Elaine Sarsynski, executive vice president of MassMutual's Retirement Services Division and chairman and CEO of MassMutual International LLC. "Participants on our platform are taking positive actions towards their retirement savings goals. Deferral percentages are up, with the greatest increase coming from Gen Y, and participants are letting their money work for them by avoiding loans, withdrawals and other behaviors that can have a negative impact."
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