ICI Estimate Shows Lower Retirement Assets in Q3

Total U.S. retirement assets were $23.5 trillion as of September 30, down 4.3% from the end of June, according to the Investment Company Institute (ICI). 

A new estimate of $24.5 trillion for June reflects a slight downward revision based on new information used by ICI. The total retirement market estimates reflect revisions to previously published data, ICI explains.

Revisions to the Financial Accounts of the United States, published by the Federal Reserve Board, resulted in a substantial downward revision to assets of annuities held outside retirement plans for the past 10 to 15 years. Smaller revisions were made going back to 1992; and minor, mostly upward, revisions were made to estimates of 403(b) plan and IRA assets at life insurance companies from 2007 through the second quarter of 2015. In addition, newly released U.S. Department of Labor (DOL) Form 5500 data for 2013 were incorporated, resulting in slight downward revisions to defined contribution (DC) plan assets (both the “401(k) plans” and the “other private-sector DC plans” categories) and private-sector DB plan assets beginning in the first quarter of 2013.

The reported assets of federal pension plans for the first, second, and third quarters of 2015 are adjusted for U.S. Treasury financing activities undertaken in anticipation of hitting the legal limit on federal government borrowing. These actions have reduced the amount of Treasury securities reported on the balance sheet of federal government defined benefit (DB) plans, an effect which ICI anticipates will be fully reversed in the fourth quarter of 2015.

Retirement assets accounted for 34% of all household financial assets in the United States at the end of the third quarter of 2015.

Assets in individual retirement accounts (IRAs) totaled $7.3 trillion at the end of the third quarter, a decrease of 4.8% from the end of the previous quarter. Defined contribution (DC) plan assets fell 4.1% in the third quarter, to $6.5 trillion. Government defined benefit (DB) plans—including federal, state, and local government plans—held $5 trillion in assets as of the end of September, a 3.9% decrease from the end of June. Private-sector DB plans held $2.8 trillion in assets at the end of the third quarter, and annuity reserves outside retirement accounts accounted for another $1.9 trillion.

Americans held $6.5 trillion in all employer-based DC retirement plans on September 30, of which $4.5 trillion was held in 401(k) plans. In addition, $504 billion was held in other private-sector DC plans, $842 billion in 403(b) plans, $255 billion in 457 plans, and $426 billion in the Federal Employees Retirement System’s Thrift Savings Plan (TSP). Mutual funds managed $3.5 trillion, or 54%, of assets held in DC plans at the end of September.

IRAs held $7.3 trillion in assets at the end of the third quarter of 2015, down 4.8% from the end of the second quarter. Forty-seven percent of IRA assets, or $3.4 trillion, was invested in mutual funds.