The average account balance for participants in public defined contribution plans rose to $59,000 last year, up 11% from 2013, according to the latest annual survey by the National Association of Government Defined Contribution Administrators.
“Both market performance and higher contribution rates are helping account balances to rise,” Edward Rutherford, NAGDCA’s president, wrote in an e-mail. The average account balance was $41,000 in 2012.
“The economy has improved much over the last five years, and so this has contributed to the rising account balances,” Mr. Rutherford added.
The latest NAGDCA survey covered 129 plans, 68% of which were 457 plans. The survey also incorporated responses from executives at 401(a), 403(b) and 401(k) plans. The plans had aggregate assets of $236 billion.
The survey noted that target-date funds are the most popular default among all plans — 64% last year vs. 62% in 2013 and 47% in 2012. Last year, the second most popular default option was stable value (10%), while 14% of plans didn’t have a default option.
Ninety-three percent of respondents reported that their plan participants also are covered by a defined benefit plan. Of those executives, 57% said there had been no changes in benefits provided by the DB plan, while 39% said “benefit reductions were recently implemented or are planned for the future,” said a report about the survey. Another 4% reported a soft freeze in which the DB plan was closed to new hires.