Rollovers Drive Increase in IRA Market Share

Total retirement market tops $15 trillion

While the U.S. Census Bureau announced Monday that state-administered pension plans improved over 10% in 2010, Cerulli Associates also announced that total assets in the U.S. retirement market, including public and private defined-contribution, defined-benefit and individual retirement account markets, increased 9.6% in 2010 to $15.8 trillion.

Cerulli predicts the market will grow by about 1% in 2011, ultimately reaching about $22 trillion in 2016.

IRA assets account for nearly 30% of total market assets. Cerulli predicts that due to large DC plan rollovers fueling asset levels, IRA assets should represent 33% of the total market in 2016.

"The decisions Baby Boomers make regarding DC plan balances as they enter retirement continue to greatly impact DC and IRA balances. While much of the industry has discussed in-plan retirement income solutions, few of these solutions have been implemented by DC plans. Since there has been little to entice Baby Boomers to stay in-plan, they continue to roll large balances into IRAs," Alessandra Hobler, an analyst in Cerulli's retirement practice, said in a statement.

The report notes that without action to prevent distributions into IRAs, rollovers will continue to increase IRA assets, “furthering their significant marketshare of the total market, beyond 2016.”


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