With U.S. retirement assets climbing higher, defined contribution plans have been able to leverage their size to their advantage. That advantage has allowed plans to demand better pricing, with the largest providers having the scale to accommodate them.
Closing the gap: DC assets have grown an average 10% annually since 2010, about twice that of DB assets. Per P&I 1,000 data, DC assets were about $3.7 trillion at the end of September; DB assets were $6.6 trillion.
Top five dominate: The five largest DC managers run about 50% of total DC assets, and the dispersion of those assets has grown by an average $6.7 billion since 2010.
Active, passive: Two-thirds of actively managed DC assets are invested with the five largest managers. Among passive assets, 93% are with the five largest managers.
Target date: Target-date funds have seen similar patterns, with the three largest managers holding the bulk of assets.
Note: Manager data based on P&I survey data through Dec. 31, 2016. Source: Pensions & Investments Research Center