By 2018 more than a third of retirement assets will be parked in IRAs, accelerating a trend seen in recent years, Cerulli reported.
The movement of funds from employer-sponsored defined benefits plans is a natural result of aging baby boomers looking for ways to generate income needed as they live out their retirement years.
“The lack of widespread use of in-plan retirement income solutions means assets accumulating in a defined contribution plan will eventually shift to an IRA,” said Bing Waldert, director at Cerulli, in a statement.
There has been talk that defined contribution plans will start to offer investment vehicles, such as annuities, that are designed to generate income on a steady basis as plan participants leave work and move into retirement.
Cerulli’s 11th annual Retirement Markets 2013: Data & Dynamics of Employer-Sponsored Plans examined the size and allocation of public and private retirement funds, including DB and DC plans and IRAs.