Massachusetts Mutual Life Insurance Co. has agreed to buy The Hartford’s retirement plans business for $400 million, helping push MassMutual’s retirement plan assets to nearly $120 billion.

The transaction is expected to close by the end of 2012.

“This acquisition represents an important step for MassMutual and underscores our long-standing commitment to the retirement market. Following the closing of the transaction, we look forward to combining the best of our two organizations, to offer enhanced capabilities and greater overall value across a broader retirement market,” said Roger Crandall, chairman, president and CEO of MassMutual.

“Our Retirement Services Division has experienced record growth in recent years and is an important contributor to MassMutual’s overall profitability and success. This transaction enables us to accelerate growth into new sectors, add complementary distribution capabilities, and nearly double the number of retirement plan participants we serve.”

The Hartford decided to sell its retirement plans business as part of its strategy to focus more on insurance underwriting and to improve expense efficiencies, increase capital generation and reduce market risks, according to The Hartford’s Chairman, President and CEO Liam McGee.

While the decision comes as a positive for MassMutual’s efforts to expand its coverage and strength in the retirement field, local employees at the company’s Hartford Financial Services Group in Simsbury and Windsor, Conn. have expressed some concern about their future as the company’s holdings are merged, according to the Hartford Courant.

MassMutual maintains a substantial presence in the region, with more than 5,000 employees in Springfield and Enfield, Conn.; Courant columnist Dan Haar says that with a long period of economic struggles in central Connecticut, Hartford employees hope for better opportunities following the merger.

The deal, which will contribute new strength to MassMutual’s existing Retirement Services Division, increasing the company’s total retirement plan assets to $120 billion.

At present, MassMutual serves more than 1.6 million participants in 7,600 plans, largely in the mid-size market. Its current assets under management are just over $66 billion. Hartford’s Retirement Plans business, including administration for DB programs, has $54.9 billion AUM and serves some 1.5 million participants in more than 33,000 plans.

The Hartford has traditionally been stronger in small- to mid-size plans and has also had a significant tax-exempt business, as well as being one of America’s leading providers of governmental plans. That 457 market is reportedly one of the new arrangement’s key opportunities.

Founded in 1851, MassMutual is a leading mutual life insurance company that is run for the benefit of its members and participating policyholders. The Hartford Financial Services Group Inc. provides insurance and wealth management services for millions of consumers and businesses worldwide.