NU Online News Service, Nov. 2, 2004, 12:48 p.m. EST

A large New England insurer hopes to use a little psychology to increase worker involvement in retirement savings plans.[@@]

The retirement services unit at Massachusetts Mutual Life Insurance Company, Springfield, Mass., has introduced the Prepared USA retirement plan participant education program to improve participation rates at 401(k) plans and other voluntary defined contribution retirement plans.

The program uses software that combines basic employee demographic information with several different employee psychological profiles.

Employees who decide they fit into the “I know the way” category will get more access to detailed research materials, and employees who choose the “Show me the way” category will be encouraged to adopt simple asset-allocation strategies, MassMutual says.

Employees in the middle “I’d like a map” category will get customized portfolio-selection assistance from a unit of Morningstar Inc., Chicago.

In addition to encouraging employees to participate in 401(k) plans, the MassMutual system can help plan sponsors identify possible problems with deferral levels and asset-allocation choices, MassMutual says.