Defined contribution plan record keepers focused on providing their participants more effective education on financial wellness in 2016, during a year in which they saw their assets increase more than 9%.
Defined contribution plan record-keeper assets hit $5.5 trillion for the year ended Sept. 30, according to the latest Pensions & Investments survey of the largest record keepers.
Record-keeping assets for firms responding to the P&I survey increased 1.6% from the reported $5.42 trillion for the year ended Sept. 30, 2015. However, Aon Hewitt, which ranked fifth in 2015 in the overall rankings with $377 billion in assets, declined to participate in this year's survey due to the announcement in February of the acquisition of its record-keeping business by Blackstone Group.
When omitting Aon Hewitt from the last two years of data, this year's total represented a 9.2% increase from the previous year.
The number of participants among survey respondents, meanwhile, remained relatively flat when omitting Aon Hewitt's 5,743,462 participants in 2015, at 86.63 million, about 0.6% higher than the total of the prior year.
Forty-two companies, the top 20 of which all saw their assets increase from the year before, participated in the latest survey vs. 45 for the previous survey. The year before, 50 companies participated in the survey.
The numbers are declining partially due to consolidation in the industry. While 2016 lacked the blockbuster deals of the previous year, such as John Hancock Financial Services Inc.'s acquisition of New York Life Retirement Plan Services and Transamerica Retirement Solutions' acquisition of Mercer's DC record-keeping business, it remains a key trend in the landscape. Transamerica, which ranked 13th for record-keeping assets in 2015, did not complete the 2016 survey.
Edmund F. Murphy III, president of Empower Retirement, Greenwood Village, Colo., said in a telephone interview that consolidation will continue to be a theme in the coming years.
“There's roughly 53 record keepers today with over 100,000 participants (each),” Mr. Murphy said. “Scale is critical in this business given the pricing pressure everyone's experiencing. I do think that will continue. That number will narrow over the next several years.”