MassMutual's Retirement Services Division reported Tuesday that in the fourth quarter of 2010, women shifted more of their retirement assets to asset allocation investments in general, but favored target-date funds.
At the end of 2010, women had 24.3% of their retirement assets in asset allocation options, just above male participants, who had 24%. Furthermore, average balances in target-date investments are approximately double those of risk-based options, according to MassMutual, while men have assets evenly split. The Retirement Services Division attributes the gap to women recognizing a need for better diversification, and a more aggressive investment style in general among men.
In late January, the Government Accountability Office made several recommendations to the Department of Labor regarding target-date funds, including a recommendation that plan sponsors deliver a statement to participants outlining "potential consequences of saving, withdrawing, or otherwise managing TDF assets in a way that differs from the assumptions on which the TDF is based."
An earlier survey by MassMutual found over 53% of women "prefer to spend as little time as possible on making investment decisions," compared with over 35% of men. Furthermore, over a quarter of women are confident making investment decisions, compared with just under half of men.
Balances for women continue to lag behind those of men by approximately 40% and their deferral percentages are lower by 0.5 percentage points, according to MassMutual. The good news for women, though, is that they gained an average 5.7% for the fourth quarter, compared with 5.5% for men.
"MassMutual has invested significant resources in participant education and, in fact, participant visits to self-service education modules increased by 6% during the fourth quarter vs. the third quarter 2010, and are up 21% for the year," Elaine Sarsynski, executive vice president of MassMutual's Retirement Services Division, and chairman and CEO of MassMutual International LLC, said in a press release.
Additionally, just 3.8% of plan participants stopped or decreased their deferrals in the fourth quarter, the lowest level since the beginning of the market drop, according to the company.
"The decreased participant activities and increased educational usage are also indicative of overall improved confidence in the economy and individual employment outlook," Sarsynski added.
Another indication of that overall confidence is participants' move out of stable value funds; less than one-quarter of participants have assets in such funds, the lowest level since the start of the recession.
In other good news, the average participant balance is above the average balance at the end of 2007. Participants in their 40s saw their balances grow 10.4% followed by those in their 50s who saw growth of 9.8%.