Nearly one in three government-sponsored defined contribution plans feature a Roth individual retirement account and 10 percent boast in-service Roth conversions, but less than 5 percent of plan participants contribute to a Roth account, new research shows.
The National Association of Government Defined Contribution Administrators, discloses this finding in a survey of 136 government defined contribution plans covering 1.9 million active participants. Most of the plans examined are 457 plans, but they also include 401(k) plans, 401(a) plans and 403(b) plans.
The report reveals that, as of December 31, 2012, 89 responding governmental 457 plans had assets valued at more than $103.3 billion. The state 457 plans with the largest asset bases are New York ($14.1 billion) and Ohio ($9.1 billion). The largest local plans responding to the survey are New York City ($10.4 billion) and Los Angeles ($3.6 billion).
The report adds that 12 responding governmental 401(k) plans had assets valued at more than $18 billion at year-end 2012. Of the total, 9 of the plans held $16 billion in assets. The largest state 401(k) plan is the California Savings Plan, with $4 billion in assets. And the largest local 401(k) plans is Los Angeles County, which has $1.8 billion in assets.
When asked if their plan was considering adding a guaranteed retirement income solution within the next year, more than half (56 percent) of the survey respondents answered no. More than a quarter (26 percent) answered they already have one, 11 percent answered that they were, but not in the coming year, and 7 percent said yes.
However, most of the responding plans that offer a guaranteed retirement income product report that less than one percent of participants use it. Retirees use the guaranteed retirement income solution more than active participants.