Annuities Still Dominant 403(b) Investment

July 13, 2010 (PLANSPONSOR.com) – Although the percentage of 403(b) assets invested in mutual funds increased from 2008 to 2009, annuities are still the dominant investment choice.

Data published by Spectrem Group in April shows nearly half (48%, or $343 billion) of 403(b) plan assets were invested in fixed annuities as of the end of 2009. Nearly a third (32%, or $226 billion) of assets were invested in variable annuities.  

The percentage of 403(b) assets invested in mutual funds increased from 18% ($110 billion) at the end of 2008 to 20% ($143 billion) at the end of 2009.  

In addition, Spectrem Group reported that 44% of 403(b) assets at the end of 2009 ($313 billion) were in plans sponsored by higher-education organizations. More than a quarter (26%, or $183 billion) were held by plans in the public K-12 market.  

Health care organizations’ 403(b)s made up 19% ($137 billion) of total 403(b) assets at the end of 2009. Seven percent of assets ($51 billion) were in private K-12 plans, and 4% ($27 billion) were in “other” 403(b) plan types.  

The data was reported in Spectrem Group’s 2010 Retirement Market Insights, which can be purchased from here.

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