Copyright 2010 A.M. Best Company, Inc.All Rights Reserved BestWire
January 27, 2010 Wednesday 04:23 PM EST
562 words
Rule Changes Drive MassMutual’s Nonprofit Retirement Business Sales Boom
Fran Lysiak
SPRINGFIELD, Mass.
Massachusetts Mutual Life Insurance Co.’s 70%-plus sales increase in the nonprofit sector retirement plan business is a result of rule changes put into effect little more than a year ago. Scott Buffington, divisional sales manager and head of market development for the retirement services division, said the new 403(b) defined contribution plan regulations that took effect Jan. 1, 2009 drove many retirement-plan sponsors in the nonprofit market to seek providers with expertise in this sector. Due to the complexity and additional administrative burden that 403(b) plan sponsors are experiencing, MassMutual has seen “tremendous growth” driven among plan sponsors and their retirement plan advisers seeking to consolidate their retirement plans with a single vendor such as MassMutual, he said. The Internal Revenue Service’s 403(b) regulations took effect in January 2009 for retirement plans subject to the Employee Retirement Income Security Act. With the regulations, also issued by the Department of Labor, 403(b) plan rules have become more similar to 401(k) plan rules. “And we have a very strong pipeline of new business opportunities” in that market, Buffington told BestWire.MassMutual’s retirement services division hired a new sales executive to support its growing retirement plan business in the nonprofit sector. Brenda Van joined MassMutual as Western regional nonprofit market specialist. She spent more than 22 years with Fidelity Investments, where she most recently served as vice president and Southwest regional manager. Van will report to Buffington.Van was added to support new business growth in the Western region of the United States, he said. TIAA-CREF, the dominant player in the higher-education retirement market, is seeing increased competition from some U.S. life insurers, one year after new 403(b) regulations (BestWire, Jan. 11, 2010). The new 403(b) regulations place increased reporting requirements on employers, “making it much less appealing” to work with many investment providers, said Bertram Scott, chief institutional development and sales officer for TIAA-CREF (BestWire, Jan. 11, 2010). As an example, employers are now responsible for ensuring that employees are within the IRS limits for hardship and loan distributions across all investment providers, he said. “These changes have prompted employers to focus on the best overall value for their employee benefit dollar,” Scott said. The providers that have helped clients navigate these changes, continue to be financially strong and provide noncommissioned advice “are getting a strong response from clients.”MassMutual has a strategy to help plans that are seeking a single vendor to administer their plan or plans, Buffington said. MassMutual has been providing retirement plans to the nonprofit market for more than 60 years. In addition to the health care market, such as hospitals and physician groups, the company serves several nonprofit sub-niches. including charitable 501c (3) organizations, private education, associations and religious organizations, Buffington said.Massachusetts Mutual Life Insurance Co. currently has a Best’s Financial Strength Rating of A++ (Superior). TIAA-CREF Life Insurance Co. also currently has a Best’s Financial Strength Rating of A++ (Superior). (By Fran Matso Lysiak, senior associate editor, BestWeek: fran.lysiak@ambest.com)
January 28, 2010
Terms and Conditions Privacy Policy
Advertisement
More Articles