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Retirement Planning > Retirement Investing

ICI: DC plan assets top $3 trillion at close of first quarter

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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.

DC plan participants’ withdrawal activity during the first quarter of 2014 —1.3 percent of participants took a withdrawal — mirrored withdrawal levels for the first quarter of 2013 (1.3 percent) 2012 (1.2 percent) and 2011 (1.2 percent).

Compared to the same period of last year, fewer participants changed the asset allocation of their account balances (4.3 percent in Q1 of 2014 vs. 4.8 percent in Q1 of 2013) or changed asset allocations of their contributions (3.8 percent vs. 4.8 percent).

Turning to loan activity, the ICI report shows that 17.7 percent of 401(k) plan participants had loans outstanding on their accounts in the first quarter of 2014. This compares with these percentages from earlier quarters:

  • Q4 2014 (18.2 percent)
  • Q3 2013 (18.3 percent)
  • Q2 2013 (18.1 percent)
  • Q1 2013 (17.9 percent)

Read the full report here.


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