Skip to main content
MENU
Subscribe
  • Sign Up Free
  • LOGIN
  • Subscribe
  • Topics
    • Alternatives
    • Consultants
    • Coronavirus
    • Courts
    • Defined Contribution
    • ESG
    • ETFs
    • Face to Face
    • Hedge Funds
    • Industry Voices
    • Investing
    • Money Management
    • Opinion
    • Partner Content
    • Pension Funds
    • Private Equity
    • Real Estate
    • Russia-Ukraine War
    • SECURE 2.0
    • Special Reports
    • White Papers
  • Rankings & Awards
    • 1,000 Largest Retirement Plans
    • Top-Performing Managers
    • Largest Money Managers
    • DC Money Managers
    • DC Record Keepers
    • Largest Hedge Fund Managers
    • World's Largest Retirement Funds
    • Best Places to Work in Money Management
    • Excellence & Innovation Awards
    • WPS Innovation Awards
    • Eddy Awards
  • ETFs
    • Latest ETF News
    • Fund Screener
    • Education Center
    • Equities
    • Fixed Income
    • Commodities
    • Actively Managed
    • Alternatives
    • ESG Rated
  • ESG
    • Latest ESG News
    • The Institutional Investor’s Guide to ESG Investing
    • ESG Sustainability - Gaining Momentum
    • ESG Investing | Industry Brief
    • Innovation in ESG Investing
    • 2023 ESG Investing Conference
    • ESG Rated ETFs
  • Defined Contribution
    • Latest DC News
    • DC Money Manager Rankings
    • DC Record Keeper Rankings
    • Innovations in DC
    • Trends in DC: Focus on Retirement Income
    • 2023 Defined Contribution East Conference
  • Searches & Hires
    • Latest Searches & Hires News
    • Searches & Hires Database
    • RFPs
  • Research Center
    • The P&I Research Center
    • Earnings Tracker
    • Endowment Returns Tracker
    • Corporate Pension Contribution Tracker
    • Pension Fund Returns Tracker
    • Pension Risk Transfer Database
  • Careers
  • Events
    • View All Conferences
    • View All Webinars
    • 2023 ESG Investing
    • 2023 Private Markets
Breadcrumb
  1. Home
  2. MONEY MANAGEMENT
April 02, 2012 01:00 AM

DC record keeping assets surpass $4 trillion mark

Fidelity, TIAA-CREF remain at top of list; Aon Hewitt takes 3rd, surpassing ING

Robert Steyer
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    Stanley Rowin
    Rising: Stephen Patterson listed new customers and higher cash flow among reasons for Fidelity's growth.

    Defined contribution record-keeping assets reached $4 trillion in 2011, posting a 1.9% gain from the $3.93 trillion recorded during 2010, according to the latest Pensions & Investments survey.

    The number of participants rose to 82.65 million from 81.18 million, a gain of 1.8%. The number of sponsors rose to 618,479 from 616,580. Each survey contained results from 54 record keepers.

    Last year's results were marked by musical chairs in the asset rankings of some of the largest companies. Aon Hewitt, Lincolnshire, Ill., climbed to third place from fourth, switching places with ING U.S. Retirement Services, Windsor, Conn.

    Principal Financial Group Inc., Des Moines, Iowa, rose one notch to 11th place, trading spots with Prudential Financial Inc., Newark, N.J.

    Fidelity Investments, Boston, continued to dominate the industry — in terms of assets under record keeping — with $949.1 billion last year, up 1% from its year-earlier figure.

    Fidelity also topped the rankings in terms of the number of participants for which it is a record keeper with 15.23 million, a rise of 1.8%.

    Stephen Patterson, Fidelity's executive vice president of sales for personal and workplace investing, attributed the firm's asset growth to new customers, increased cash flow from existing participants and market gains.

    Mr. Patterson predicted Fidelity's DC record-keeping business should be able to capitalize on “integrating multiple benefits” for sponsors in other areas, including defined benefit plans, non-qualified plans, stock option plans and health plans. “Sponsors are looking at putting those with a fewer number of providers,” he said. “Health administration is taking on a bigger role.”

    Mr. Patterson said Fidelity's fee-disclosure practices and its size should help it gain customers thanks to new federal regulations affecting fee disclosure between providers and sponsors that take effect in July.

    “There will be significant pressure on record keepers,” Mr. Patterson said. “You need scale to operate in this environment. We expect a shakeout as the industry consolidates.”

    Rest of top 5

    Among the other record keepers in the top five, TIAA-CREF, New York, stayed in second place with $320.4 billion vs. $320 billion in 2010. In terms of number of participants, TIAA-CREF remained in fifth place at 3.82 million, vs. 3.75 million in 2010.

    Vanguard Group Inc., Malvern, Pa., retained fifth place with $273.5 billion in assets vs. $273.8 billion in 2010. In the ranking of participants, Vanguard remained in seventh place with 3.47 million, off slightly from 3.46 million the previous year.

    The big switch among the top five was due to Aon Hewitt's hefty 6.8% gain in assets to $307.9 billion from $288.2 billion.

    Alison Borland, vice president for retirement product strategy at Aon Hewitt, attributed her company's gains primarily to nine “big wins” of new clients, many with assets of $1 billion or more. She declined to identify them, except to say that eight were 401(k) plans and one was a 457 plan.

    These new clients helped Aon Hewitt add participants — up 11.8% to 5.2 million from 4.65 million, keeping it in third place.

    Although Aon Hewitt focuses on the largest DC plans, Ms. Borland said her company is looking to expand its presence in the middle market, which she defines as sponsors with assets starting in the $100 million to $200 million range and going up to $750 million.

    Like Mr. Patterson at Fidelity, Ms. Borland said she believed Aon Hewitt could benefit from the federal fee disclosure regulations due to her firm's size and existing disclosure practices.

    Maliz Beams, CEO of ING U.S. Retirement, said the fee-disclosure rules will be good for the industry and for her company.

    “Disclosure will help us,” said Ms. Beams, referring to ING's existing policies and large client base. She expects to add clients in the small and midsize market where ING already has a strong presence. ING defines this market as plans with fewer than 1,000 participants and less than $150 million in assets.

    ING's record-keeping assets dropped 2.1% to $285.7 billion in 2011 from $291.9 billion. Ms. Beams said the decline was primarily due to merger-and-acquisition activity that affected “several large plans.” ING's clients were acquired, and the record-keeping responsibilities of the merged entity were consolidated with the acquirers' record keepers.

    ING kept its second-place ranking for participants, although its 5.28 million for 2011 was lower than the 5.42 million in 2010.

    Ms. Beams said the lower number represents the impact of the clients lost due to M&A as well as to the final year of digesting of ING's 2008 acquisition of CitiStreet. The CitiStreet deal included adding “a block of very small plans” that ING eventually sold, she said.

    “We have had a surge of business in our last two quarters,” said Ms. Beams, who declined to provide details.

    ING also held onto second place when ranked by number of sponsors, with 49,492 down from 50,903. Paychex Inc., Rochester, N.Y., remained the leader with 58,000 sponsor-clients, up 11.5% from 52,000 in the previous survey.

    Principal Financial climbed the ladder on the P&I survey thanks to a 2.5% gain in assets to $99.2 billion vs. $96.8 billion, passing Prudential, whose assets declined 3.1% to $95.3 billion from $98.3 billion.

    Joni Tibbetts, Principal Financial's vice president for retirement and investor services, predicted her firm also would benefit from the federal fee-disclosure regulations. One reason is that Principal Financial started sending disclosure materials to clients months before the Department of Labor issued in February its final regulations governing providers and sponsors.

    Ms. Tibbetts suggested that some providers “may exit” the business because of the fee-disclosure rules. “We're always open to looking at opportunities in the marketplace,” she said.

    Principal's DC business served 3.18 million participants last year, up from 3.1 million in 2010. It remained in eighth place in this category. Ms. Tibbetts said the gain reflected an increase in the number of larger plans that offset a loss of smaller plans.

    Sent to clients

    Great-West Retirement Services, Greenwood Village, Colo., is another record keeper that sent fee-disclosure materials to clients before the DOL's final provider-sponsor rules were issued. It held onto seventh place in the asset category with $150.7 billion, up 2.8% from $146.6 billion in 2010. And it retained fourth place in the participant category with 4.42 million vs. 4.41 million.

    Charles Nelson, president of Great-West, said the biggest asset gains came from sponsors expanding their use of stable value and fixed-income products.

    Mr. Nelson doubted new fee-disclosure regulations would have a big impact on the record-keeping industry this year because implementation doesn't start until the summer. “Fees will be more of a cost issue in 2013,” he said.

    He added that smaller providers will be challenged by “increasing regulatory burdens,” such as the fee disclosure rules, especially if the stock market cannot sustain its growth from the depths of early 2009.

    “If you're a small provider, how many years can you take with the market being down or flat and with higher (regulatory) costs,” Mr. Nelson asked.

    Related Articles
    DC service providers getting jump on DOL fee rules
    Deloitte: 401(k) sponsors think plan fees are competitive
    DC industry relieved over fee disclosure rules
    Defined contribution record keepers 2012
    Metra set to take on new 457 bundled provider
    Chittenden County panel seeks consultant to help consolidate DC plans
    MGM Resorts deals record-keeper contract to Prudential Retirement
    North Carolina on lookout for new 403(b) plan's first record keeper
    Westinghouse Electric plugs into Aon Hewitt as 401(k) record keeper
    State Street selects Fidelity as salaried plan record keeper
    Cardinal Health chooses Wells Fargo as record keeper
    Recommended for You
    UBS appoints fixed-income chief for emerging markets, Asia-Pacific
    Vanessa Wang
    DWS Group chooses next head of Asia-Pacific
    blackrock_HQ_2023_1550_i.jpg
    BlackRock issues 2023 investment stewardship report
    Innovations in DC: Moving Ahead on Retirement Outcomes
    Sponsored Content: Innovations in DC: Moving Ahead on Retirement Outcomes

    Reader Poll

    March 22, 2023
    SEE MORE POLLS >
    Sponsored
    White Papers
    The Need for Speed in Trend-Following Strategies
    Global Fixed Income: Volatility and Uncertainty Here to Stay
    Morningstar Indexes' Annual ESG Risk/Return Analysis
    2023 Outlook: The Top Five Trends to Monitor in the Year Ahead
    Show Me the Income: Discovering plan sponsor and participant preferences for cr…
    The Future of Infrastructure: Building a Better Tomorrow
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today
    December 12, 2022 page one

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    130 E. Randolph St.
    Suite 3200
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Content Solutions
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • Topics
      • Alternatives
      • Consultants
      • Coronavirus
      • Courts
      • Defined Contribution
      • ESG
      • ETFs
      • Face to Face
      • Hedge Funds
      • Industry Voices
      • Investing
      • Money Management
      • Opinion
      • Partner Content
      • Pension Funds
      • Private Equity
      • Real Estate
      • Russia-Ukraine War
      • SECURE 2.0
      • Special Reports
      • White Papers
    • Rankings & Awards
      • 1,000 Largest Retirement Plans
      • Top-Performing Managers
      • Largest Money Managers
      • DC Money Managers
      • DC Record Keepers
      • Largest Hedge Fund Managers
      • World's Largest Retirement Funds
      • Best Places to Work in Money Management
      • Excellence & Innovation Awards
      • WPS Innovation Awards
      • Eddy Awards
    • ETFs
      • Latest ETF News
      • Fund Screener
      • Education Center
      • Equities
      • Fixed Income
      • Commodities
      • Actively Managed
      • Alternatives
      • ESG Rated
    • ESG
      • Latest ESG News
      • The Institutional Investor’s Guide to ESG Investing
      • ESG Sustainability - Gaining Momentum
      • ESG Investing | Industry Brief
      • Innovation in ESG Investing
      • 2023 ESG Investing Conference
      • ESG Rated ETFs
    • Defined Contribution
      • Latest DC News
      • DC Money Manager Rankings
      • DC Record Keeper Rankings
      • Innovations in DC
      • Trends in DC: Focus on Retirement Income
      • 2023 Defined Contribution East Conference
    • Searches & Hires
      • Latest Searches & Hires News
      • Searches & Hires Database
      • RFPs
    • Research Center
      • The P&I Research Center
      • Earnings Tracker
      • Endowment Returns Tracker
      • Corporate Pension Contribution Tracker
      • Pension Fund Returns Tracker
      • Pension Risk Transfer Database
    • Careers
    • Events
      • View All Conferences
      • View All Webinars
      • 2023 ESG Investing
      • 2023 Private Markets