Defined contribution plans assets account for more than one-quarter of the total retirement assets, new research shows.
The Investment Company Institute (ICI) unveils this finding in an August 2014 report, “Defined Contribution Plan Participants’ Activities, First Quarter 2014.” The 2014 report updates results from ICI’s survey of a cross-section of record-keeping firms representing a range of DC plans and covering about 24 million employer-based DC retirement plan participant accounts as of March 2014.
The report reveals that 26 percent of U.S retirement assets were defined contribution (DC) plan assets at the close of the first quarter of 2014. Funds invested in 401(k) plans make up 4.3 trillion of the DC plan market. Other DC plans, such 403(b)s, account for an additional $1.7 trillion.
U.S. retirement assets at the end of the first quarter, the report shows, also include the following categories:
- $2 trillion: annuities
- $5.4 trillion: federal, state and local pension plans
- $3 trillion: private defined pension plans; and
- $6.6 trillion: individual retirement accounts (IRAs)
The report adds that the S&P 500 total return index, a benchmark to which many passively managed DC plan accounts are tied, edged up 1.8 percent in the first quarter of 2014. This compares with S&P 500 gains of 10.5 percent, 5.2 percent and 2.9 percent for the third, second and first quarters of 2014, respectively.