MassMutual Retools Aviator 401(k) For Small Employers

By Cyril Tuohy

InsuranceNewsNet

MassMutual Aviator, a 401(k) retirement plan designed for employers with less than $15 million in retirement assets, has been reintroduced to make it more attractive for small plan sponsors.

Enhancements include lower fees, educational tools and more investment options, MassMutual Retirement Services said.

“Our new Aviator 401(k) product allows small businesses, many of which have fewer than 100 employees, to compete effectively with larger employers in offering a desirable retirement plan,” Bill Silvanic, MassMutual’s senior vice president for retirement products, said in a news release.

Aviator includes RetireSMART, a website with savings-accumulation and income-modeling tools; Model My Goals, an asset allocation tool, and Fiduciary Assure, billed as a “co-fiduciary and investment selection service” offered through Mesirow Financial.

MassMutual said it was offering a Lifetime Income option that “allows plan participants to turn retirement savings into retirement income by buying $10 units of monthly income to cover their basic living expenses.”

Aviator was originally available through The Hartford’s Retirement Service Group, but Hartford sold it to MassMutual last year.

The retirement services industry has traditionally found it difficult to reach employees working for small businesses, which represent a fractured but enormous segment of the employer-sponsored retirement market.

Small business owners say they often don’t offer retirement plans because the plans are too expensive and too complex to manage and are often ignored by employees who leave the company after several months.

As a result, employees working for small businesses don’t have the same opportunity to prepare for retirement as peers working at large employers.

But Congress and the retirement services industry are looking for ways to entice more small employers to sponsor a retirement plan, particularly since small employers are traditionally seen as the engine of the economy and do the most hiring.

The Government Accountability Office estimated that in 2013 only 14 percent of employers with fewer than 100 employees sponsored a retirement savings plan.

As much as 35 percent of the U.S. workforce is employed by small business, according to the U.S. Census Bureau.

Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].

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Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at [email protected].