MassMutual Retirement and BlackRock have joined forces to develop a customized, lower-cost alternative to managed accounts for defined contribution retirement plans.
The new Managed Allocations program provides a choice of asset allocation strategies, professional management and fiduciary oversight for retirement plans, according to the firms.
MassMutual provides the recordkeeping and BlackRock assumes fiduciary responsibility for designing and updating the glidepath models and asset allocations.
Managed Allocations is available to sponsors of defined contribution retirement plans with at least $15 million in assets.
“Managed Allocations offers plan sponsors an innovative and scalable custom target date experience for plans that may not have the ability to go custom because of their size or the cost,” said Greg Porteous, managing director, BlackRock U.S. Retirement Group.
The program provides three glidepath options, including conservative, moderate and aggressive. The choice of glidepath may hinge on a variety of considerations including whether or not the plan sponsor offers a defined benefit pension, offers company stock as an investment option, employee demographics, employee savings rates and other factors that advisors can help clients navigate, says BlackRock.
Plan sponsors can choose from six to nine asset classes, and BlackRock will rebalance the glidepath model and asset classes on an annul basis.
“MassMutual’s data on plan participants indicates that asset allocation strategies and target date funds are growing in popularity, especially with younger retirement savers,” said Eric Wietsma, senior vice president, sales and worksite education for MassMutual Retirement Services. “Advisors and plan sponsors want more control over the quality of the funds selected as part of the asset allocation models, as well as the glidepaths available within these investment strategies.”