U.S. corporate retirement plans had combined assets of $6.272 trillion as of March 31, up 2.6% from the fourth quarter of 2010, according to the Federal Reserve's Flow of Funds report issued Thursday.
Good equity returns in the first quarter brought increases for both defined benefit and defined contribution plans, according to the report. The first-quarter asset increase followed consecutive increases in the last two quarters of 2010.
Corporate defined benefit plan assets totaled $2.318 trillion as of March 31, up 2.5% from the previous quarter. Total assets in corporate defined contribution plans were $3.953 trillion, up 2.7%, and the highest level in the past five years of reporting.
The value of equities in corporate DB plans was $832 billion, up 2.7%, while the value of bonds was $386.6 billion, up 3%.
In corporate DC plans, the value of equities was $1.268 trillion, up 5.5% from the previous quarter, while the value of bonds was $110 billion, up 1.9%.
Total assets in state and local government retirement funds as of March 31 were $3.034 trillion, up 3.5% from the previous quarter, while the federal government's retirement fund assets totaled $1.413 trillion, down 0.14% from the previous quarter.
“The run-up in the stock market in the last three quarters has pushed defined benefit plans up to their highest levels since 2007, which was the beginning of the market meltdown,” Craig Copeland, senior research associate for the Employee Benefit Research Institute, said in an interview.
With both defined benefit and defined contribution assets well above 2007 levels, “we're finally on a trend that's getting us growing,” Mr. Copeland said. “Private pensions should be better funded now. People are back to accumulating assets instead of getting back to where we were.”
Mr. Copeland said the growth in defined benefit assets was “essentially the same” as the increase for defined contributions, but shows a stronger recovery for the former. “Defined benefit plans actually did better because they had negative contributions. With the number of plan withdrawals on the decline in the last quarter, defined benefit plans have done well,” he said.