After fairly significant declines in 2008, the retirement plan market did show some positive growth during the first six months of 2009, Bob Wuelfing, president of SPARK(Society of Professional Asset-Managers and Record Keepers) told attendees yesterday at the group’s 2009 conference.
Research by SPARK shows that the retirement plan market
holds about $13.2 in trillion assets, with $4.5 trillion held in individual
retirement accounts, $4.3 trillion in employer-based defined benefit plans and
$4.2 trillion in employer-based defined contribution plans.
“Our projections show that the total retirement plan market grew about 4.3%,” Wuelfing said. The largest growth comes in the IRA market, which grew by 6% and represents about 30% of the retirement plan market, outpacing the DC plan market. Wuelfing noted, however, that 401(k) rollovers are funding the growth in IRA accounts.
Dr. Sarah Holden, senior director of retirement and investor research at the Investment Company Institute, told attendees at the Washington, D.C. event that 70% of U.S. households have an IRA account and/or employer-sponsored retirement plans.
ICI 2008 data show that nearly 32% of households have an IRA and an employer-sponsored retirement plan, 29% have only employer-sponsored retirement plan, and 9% have only an IRA. The research, which involved 116.8 million U.S. households, reveals that 30% of American households did not have an IRA or an employer-sponsored retirement plan.
Holden also explained that the population does not dramatically decline after the Baby Boom Generation. “Although the boomers are a big part of our population, plan sponsors and services providers shouldn’t lose sight of younger generations coming behind the boomers,” she said. “There is an echo boom.”
While plan sponsors and services providers are focusing on servicing older individuals by addressing distribution issues, they also have to realize that Generation X and Y workers are entering into their prime savings stages, she noted.
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