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Defined contribution assets to hit $7.3T by 2017

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Public and private defined contribution plan assets will reach $7.3 trillion by 2017, according to a new report.

Cerulli Associates, Boston, published this finding in a new study, “U.S. Retirement Markets 2012: Market Sizing, Projections and Segmentation of Public and Private DB and DC.” The 10th annual report explores retirement market opportunities in public and private defined benefit (DB), defined contribution (DC), and IRA plans.

The report reveals that private and public defined contribution plan assets in 2011 totaled $3.71 trillion and $1.25 trillion, respectively. Public defined benefit plan assets totaled $4.05 trillion in 2011, just behind the largest retirement segment by assets: IRAs, which were valued at $4.87 trillion in 2011.

In 2010, private and public defined contribution plan assets reached $3.59 trillion and $1.22 trillion, respectively. Public defined benefit plan assets that year totaled $4.06 trillion, again just behind the largest retirement segment by assets: IRAs, which were valued at $4.83 trillion in 2010.

“The 401(k) market is the largest driver of growth in the private DC industry, and it remains the largest component of the market,” states Cerulli Analyst Alessandra Hobler. “401(k) plans have become the primary savings vehicle for many private sector employees. As automatic features continue to gain traction, further implementation of these features may increase participation and deferral rates, contributing to plan asset growth.”