403(b)s Dominate Not-for-profit Retirement Plan Market

As of December 31, 2009, companies reported over 21 million participants in not-for-profit market plans, up 2.7% over the previous year.    

Of the total assets, $295 billion were held in 403(b) plans, while $169 billion were in 457 plans and $140 billion were in other not-for-profit plan types. Of total participants, 9.5 million were in 403(b) plans, 4.2 million in 457 plans, and 4.1 million in other plan types. (The breakdown of assets and participants excludes two companies that were unable to report totals by plan type.)

Among market segments for all plan types, the college and university segment has the largest percent of assets (37%), followed by hospital and health care (18%), other (19%), government (15%), and K-12 (11%). However, within the 403(b) plan market, the largest percent of contributions, assets, and participants are in the hospital and health care segment, followed by K-12.  

The vast majority of 457 contributions, assets, and participants are in the state and local government category. State and local government comprised 91% of assets, 91% of year-to-date contributions, and 90% of participants for this segment.  

Nearly half of other not-for-profit assets belong to 401(k) hospital and health care (21%) and 401(k) other NFP (29%).   

Over $26 billion entered 403(b) plans in 2009, representing an increase of 1% compared with 2008. By investment product, $8.2 billion was invested in mutual funds, $4.1 billion in group annuity contracts, $3.1 billion in variable annuities, and $2 billion in fixed annuities.  

In 2009, nearly $14 billion entered 457 plans – a 16.7% decrease over the previuos year. However, LIMRA said most of that difference is associated with large plan takeovers last year. Mutual funds comprised 53% of year-to-date 457 contributions.   

Contributions of nearly $9.2 billion entered other not-for-profit plans during 2009. Mutual funds comprised 64% of these contributions.   

Twenty-eight providers participated in the quarterly study by LIMRA. The participating companies represent 90% of total combined 403(b) and 457 market assets as of December 31, 2009.