457 Industry Snapshot
With over $380 billion in recordkept assets, 457 plans account for the third largest pool of defined contribution (DC) assets, providing public/governmental and certain nongovernmental employees with access to benefits typically associated with 401(k) and nonqualified deferred compensation (NQDC) plans. Governmental 457(b) plans, which can be similar to 401(k) plans, are the largest subset and cover 7 million participants, while nongovernmental plans must limit participation to groups of highly compensated employees (HCEs) and cover less than 250,000 participants.
It is not surprising that, as supplemental savings plans, 457s are less successful at capturing participant savings than are other plans—the $47,000 in average 457 plan assets per participant is lower than the comparable figures for either 401(k)s or 403(b)s.
The secondary nature of these plans and the limitations many public-sector 457s face in offering automatic enrollment and automatic escalation creates opportunities for providers to differentiate on the quality and effectiveness of services that successfully increase participation and contributions levels. Examples would include on-site meetings, online tools, financial wellness programs and communications/education campaigns. Retiree services also take on increased importance, as 457 participants may have multiple distribution options across multiple plans to consider at retirement. —BOK
Growth in Total 457 Plan Assets ($mm)
Share of Total Defined Contribution Market
457 plan assets
457 plan plans
457 plan participants
|By Plan Size||Assets ($mm)*||Total*||Participants*|
|$5mm – $25mm||$27,180||2,683||655,529|
|>$25mm – $100mm||$38,568||805||779,002|
|>$100mm – $500mm||$42,173||244||1,290,764|
|† Not all providers report complete data; therefore, data segmented by plan size will not equal the corresponding overall total.|