A new report finds that 88% of target date mutual fund assets were held through DC plans.
The report from the Investment Company Institute notes that as of Dec. 31, 2016, target date mutual fund assets totaled $887 billion, up 1.5% in the fourth quarter and up 16.3% for the year. Retirement accounts held the bulk of target date mutual fund assets: 88% of target date mutual fund assets were held through DC plans (67% of the total) and IRAs (20%) at year-end 2016.
Total U.S. retirement assets were $25.3 trillion as of Dec. 31, 2016, up 1.4% from the end of September and up 6.1% for the year. Retirement assets accounted for a third (34%) of all household financial assets in the United States at the end of 2016.
Americans held $7.0 trillion in all employer-based DC retirement plans on Dec. 31, 2016, of which $4.8 trillion was held in 401(k) plans. In addition to 401(k) plans, at the end of the fourth quarter:
- $550 billion was in other private-sector DC plans;
- $905 billion was in 403(b) plans;
- $282 billion was in 457 plans; and
- $467 billion was in the Federal Employees Retirement System’s Thrift Savings Plan (TSP).
DC plan assets were $7.0 trillion in the fourth quarter, up 1.3% from a revised estimate of $6.9 trillion in the third quarter of 2016. Mutual funds managed $3.0 trillion, nearly two-thirds (63%) of assets held in 401(k) plans at the end of December 2016.
Assets in IRAs totaled $7.9 trillion at the end of the fourth quarter of 2016, an increase of 1.1% from the end of the third quarter, while government defined benefit plans — including federal, state and local government plans — held $5.5 trillion in assets as of the end of December, a 2.4% increase from the prior quarter-end. Private-sector DB plans held $2.9 trillion in assets at the end of the fourth quarter of 2016, and annuity reserves outside of retirement accounts accounted for another $2.0 trillion.
