June 2012
Cover:Chasing Perfection
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Illustration by Yuko Shimizu
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DC plan recordkeepers offer more products and services than
ever
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.