Little Change in Retirement Assets in Q3

Total U.S. retirement assets were $24.2 trillion as of September 30, 2014, about unchanged from the end of June, according to the Investment Company Institute’s (ICI) Q3 Retirement Update.

Defined contribution (DC) plan assets rose 0.7% in the third quarter to $6.6 trillion. As of September 30, $4.5 trillion was held in 401(k) plans, $928 billion in 403(b) plans, $258 billion in 457 plans, and $409 billion in the Federal Employees Retirement System’s Thrift Savings Plan (TSP).  Mutual funds managed $3.7 trillion, or 55%, of assets held in DC plans at the end of September.               

Government defined benefit (DB) plans—including federal, state, and local government plans—held $5.1 trillion in assets as of the end of September, a 0.9% decrease from the end of June. Private-sector DB plans held $3.2 trillion in assets, and annuity reserves outside of retirement accounts accounted for another $2.0 trillion.

ICI data suggests unfunded liabilities are a larger issue for government DB plans than for private-sector DB plans. As of the end of the third quarter, unfunded liabilities were 2% of private-sector DB plan entitlements, 26% of state and local government DB plan entitlements, and 57% of federal DB plan entitlements. ICI explains that entitlements include both retirement assets and the unfunded liabilities of DB plans.

IRAs held $7.3 trillion in assets at the end of the third quarter, about unchanged from the end of the second quarter. Forty-eight percent of IRA assets, or $3.5 trillion, was invested in mutual funds.