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Retirement Assets Lost Quarter of Their Value in '08

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Yet another report is highlighting the huge amount of losses in retirement plans. During the economic crisis, retirement plans have lost nearly a quarter of their value, according to a new Spectrem Group report, Retirement Market Insights 2009.

The report notes that total retirement market assets, including defined contribution (DC) and defined benefit (DB) plans, tumbled 24% to $7.86 trillion in 2008, down from $10.3 trillion in 2007. Assets held in DC plans, which includes 401(k)s, fell 21% in 2008 to $3.8 trillion, a drop from $4.8 trillion in 2007. However, the study notes that DC plans continue to increase in popularity, with DC plans as a percentage of all retirement assets expanding to a record 49% in 2008.

In the corporate sector specifically, 401(k) plans, which account for 71% of all corporate retirement assets, fell to $1.94 trillion in 2008, the study says. “That represents a 23% decline from $2.52 trillion in 2007. However, average annual growth remained positive at 7.8% from 1995 to 2008,” the study notes.

Spectrem says the report findings are based on data derived from both public and private sources as well as Spectrem surveys. The market sizing estimates, Spectrem says, make use of these data sources as well as Spectrem’s proprietary algorithms.


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