Growth rate of 401(k) assets is continuing to level off, with assets...

Growth rate of 401(k) assets is continuing to level off, with assets projected to grow 12% in 1999, compared with 15% in 1998 and 20% in 1997, according to this year’s 401(k) industry market study by Cerulli Associates. Assets in 401(k)s will grow to nearly $1.56 trillion by the end of 1999 from about $1.4 trillion at year-end 1998, the report disclosed. The study also points to a leveling off of the historical preference for retail mutual funds in the 401(k) market, said Peter Starr, the Cerulli consultant who runs the retail consulting practice. According to the study of 1998 data from various sources, including Cerulli interviews with market sources and Department of Labor statistics, 30% of 401(k) assets or $419 billion are invested in institutional mutual funds, commingled accounts and separate accounts; 33% are in retail mutual funds; and 37% are in other vehicles. Cerulli projects that by 2001, 39% of 401(k) assets will be in institutional vehicles; 31% will be invested in retail mutual funds; and 30% will be in other vehicles.