DC assets take second largest hit in Q1

U.S. defined contribution assets fell by 12.8% during the first quarter, a mark rivaled only by the fourth quarter of 2008. Total assets, reported by the Federal Reserve Economic Data service, fell to $7.5 trillion from $8.6 trillion at the end of 2019.

The COVID-19-driven decline coincided with the worst quarterly performance since the global financial crisis. Using a 60/40 portfolio as a proxy, DC plans would have taken a 11.79% loss, nearly identical to Q4 2008's 11.83% fall.

DC assets hit a peak in December, reaching $8.6 trillion after a late runup in equity markets and more than double its mark 10 years earlier. Net flows to DC accounts have had a volatile history and have been declining recently. The rolling four-quarter average at the end of March was $123 billion and has been trending downward since early 2018.