The warranty can help protect plan fiduciaries if there is a legal judgment that results in damages attributable to a breach in the warranty, the firm said, in a press release. Assurances provided by the warranty include:
- independent certification that Employee Retirement Income Security Act (ERISA) standards of fiduciary prudence have been applied to investment identification, screening and monitoring,
- independent certification that investment options under MassMutual’s Smart Architecture Investment Program provide a suitable basis for plan participants to construct well-diversified investment portfolios for retirement, and
- investment options made available include balanced and target date investments that meet the Department of Labor’s proposed requirements for Qualified Default Investment Alternatives (QDIA).
Underpinning MassMutual’s Fiduciary Warranty will be a separate, independent third-party certification program that will also launch early in the fourth quarter, the announcement said.
The certification will be conducted annually and will focus on MassMutual’s investment identification, screening and monitoring process, which uses quantitative and qualitative factors. Evaluation criteria will include investment performance, style consistency, manager tenure, investment philosophy, and expenses.
Additional information about MassMutual’s third-party certification program and terms and conditions of the Fiduciary Warranty will be released in the fall. MassMutual’s Web site is www.massmutual.com.