Graphic: A look at the largest DC plans
Last year’s market challenges pressured defined contribution balances, including those in the largest DC plans. The previous decade rewarded savers, particularly those investing in U.S. equities, as the S&P 500 returned an annualized 11.7% through Sept. 30. However, asset allocations and, hence, participants’ risk profiles, varied among the largest plans.
Long-term growth: Among the five largest DC plans that responded to P&I’s survey, assets grew a combined 98%, to $876.2 billion, since 2012. The Thrift Savings Plan led the way, with asset growth of 112% to $689.9 billion, from $325.7 billion in 2012.
Growth of the largest DC plans (billions)
TSP's target: Over the past decade, the TSP’s assets in target-date funds grew to 22% of all assets, from 13%. Outside of TDFs, U.S. equities increased to 37% from 32%, while fixed income and cash dropped 5 and 7 percentage points to 3% and 35%, respectively.
Fed Thrift asset mix
Comparing asset mixes: Asset class allocations varied among the large plans that provided data. In particular, stable value and target-date fund allocations had wide ranges. Notably, participants in the Raytheon Technologies and Bank of America Corp. plans had 41% and 58%, respectively, of their plans’ assets invested in U.S. equity, which includes 12% and 13% invested in company stock.
Asset mixes of the largest DC plans
*Figures for 2012 and 2017 reflect the combined DC assets of Raytheon Co. and United Technologies. The two firms merged in 2020. Source: Pensions & Investments