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Rating:Just How Big Is the 401k Biz? Not Rated 0.0 Email Routing List Email & Route  Print Print
Wednesday, December 31, 2014

Just How Big Is the 401k Biz?

Reported by Neil Anderson, Managing Editor

401(k)s may be the single most important channel for the mutual fund industry, and 2014 was another big year for 401(k)s. Our sister publication, 401kWire, is taking stock of where the defined contribution stands, by the numbers. Here’s some statistics about the overall size and shape of the business, using the latest available data (which sadly can still be as much as two years old).

. . .


Total Assets

$24.2 trillion: that’s the total retirement assets in the U.S. as of September 30, 2014 (per the ICI). That represents 36 percent of all household assets.

27.4 percent of those assets, $6.630 trillion, are in defined contribution plans (again, per the ICI). That compares with $4.26 trillion on December 31, 2012 (per the DoL).

$4.475 trillion (67.5 percent of DC assets) was in 401(k)s as of September 30, 2014 (per the ICI). That compares with $3.530 trillion (82.9 percent) on December 31, 2012 (per the DoL).

By way of comparison, IRAs held $7.343 trillion (i.e. 30.3 percent of all retirement assets) as of September 30, 2014 (per the ICI).

Breaking that down into households, the median household retirement account value was $59,000 as of December 31, 2013 (per the Fed). The mean was $201,300. By comparison, the mean retirement savings for households age 35-64 with IRAs or DC savings was $194,800.

. . .


Investment Product Types

Of the $4.475 trillion in 401(k)s as of September 30, 2014, $2.816 trillion (62.9 percent) was in mutual funds (per the ICI). Of the $7.343 trillion in IRAs, $3.504 trillion (47.7 percent) was in mutual funds.

. . .


Contributions

In 2012, $352.8 billion was contributed to defined contribution plans (per the DoL). $306.1 billion of that went into 401(k)s.

. . .


Expenses

In 2012, plans paid out $3.615 billion for administrative expenses (per the DoL).

. . .


Participants

In 2013, 80.7 million people worked for employers sponsoring some kind of retirement plan (DB or DC), and 64.2 million of those workers participated (per EBRI). 58.7 million full-time, full-year wage and salary workers age 21-64 worked for employers sponsoring some kind of retirement plan, and 51.4 million of those workers participated.

On the flip side, in 2013 93.1 million workers didn’t participate in a workplace retirement plan (including 76.6 million who worked for an employer who didn’t offer such a plan) (per EBRI).

There were 74.811 million 401(k) participants in 2012, including 63.088 million active participants (per the DoL).

. . .


Participation Rate

Translating those participant counts into participation rates, in 2013 51.3 percent of workers had an employer offering a retirement plan, and 40.8 percent of workers participated in such a plan (per EBRI). Among full-time, full-year wage and salary workers age 21-64, 62.3 percent worked for employers sponsoring plans and 54.5 percent participated in those plans.

In 2013, 49.2 percent of all households held retirement accounts of some kind (per the Fed).

. . .


Number of Plans

There were 676,689 retirement plans in 2012 (per the DoL). 632,970 (93.5 percent) of those were DC plans, and 516,346 (81.6 percent) of those DC plans were 401(k)s.




Data Sources

The ”Private Pension Plan Bulletin, Abstract of 2012 Form 5500 Annual Reports”, published in October 2014 by the U.S. Department of Labor’s (DoL’s) Employee Benefits Security Administration (EBSA)

Employment-Based Retirement Plan Participation: Geographic Differences and Trends, 2013”, published in October 2014 by the Employee Benefits Research Institute (EBRI)

”Changes in U.S. Family Finances From 2010 to 2013: Evidence from the Survey of Consumer Finances”, published in September 2014 in the Federal Reserve Bulletin from the board of governors of the Federal Reserve System

”Quarterly Retirement Market Data, Third Quarter 2014”, published Decemeber 17, 2014 by the Investment Company Institute (ICI

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