Cover | Published in June 2012

Chasing Perfection

DC plan recordkeepers offer more products and services than ever

By Brian O'Keefe | June 2012
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Illustration by Yuko Shimizu

Any way one looks at it, the defined contribution (DC) recordkeeping market is—and always has been—extremely competitive. Technology, of course, has everything to do with the variety of products and services out there. For example, recordkeeping was once the bastion of balance-forward accounting, but now daily valuation is taken for granted. With the advent of electronic statement delivery and email notification, quarterly statements are now the exception rather than the rule; online enrollment is commonplace; and when participants make changes to deferrals (which, admittedly, is not very often), it is usually through the recordkeeper’s website.

New to this year’s survey were questions about mobile applications for plan sponsors and participants, an area that has seen an astonishing proliferation of offerings. This will certainly be a trend to watch and one we expect to monitor in our DC Survey later this year.

Growing “Up” 

When PLANSPONSOR first conducted its Recordkeeping Survey in 1999, there were about the same number of DC recordkeeping providers (70), which recordkept a total of $1.715 trillion in assets, 292,662 DC plans and just over 52 million DC participants. In this, our 14th annual, Recordkeeping Survey, we cover a total of 72 recordkeepers, which service nearly three-quarters of one million plans (+149% from 1999), $4.182 trillion in plan assets (+144% from 1999) and a little more than 85 million individual participants (+63%)—that is, more than one-quarter of the U.S. population!

Overall, 2011 saw year-over-year growth for the DC recordkeeping industry in total plans, assets and participants, but it was the total plan count that increased at the largest rate (7.4%), from 677,192 plans at the end of 2010 to 727,428 at the end of 2011. This growth was almost entirely among micro plans (less than $5 million in total assets), which accounted for 72,079 additional plans compared with the year before. The number of DC plan participants also increased by more than two million people in 2011 (+2.7%), and plan assets rose 1.4% from $4.126 trillion at the end of 2010. The overall rate of increase in both assets and participants was understandably lower than that of total plans, given the increase in the number of relatively small plans.