Assets of the 1,000 largest U.S. retirement funds increased to $11.32 trillion in the year ended Sept. 30 at a slower pace — 2.9% — than in 2018 when assets grew by 6.4%, due to the lingering effect of poor market performance in the fourth quarter of 2018.
Over the five years ended Sept. 30, asset growth of the combined defined benefit and defined contribution plans of the 1,000 largest retirement funds was 25%, lagging the 31.8% increase over the same time frame ended Sept. 30, 2018, results of Pensions & Investments' annual survey showed.
Defined benefit plans within the top 1,000 funds were up 2.2% for the year to $7.06 trillion, or 62%, of total universe assets. Defined contribution plan assets were up 4% to $4.26 trillion as of Sept. 30.
Among the 200 largest retirement funds in P&I's universe, growth of DC plan assets continued to outpace that of DB plans in both the one- and five-year periods ended Sept. 30.
Assets managed in DB plans by the top 200 funds totaled $5.59 trillion, up 2.5% for the year and up 17.7% for the five years ended Sept. 30.
In contrast, aggregate assets in the DC plans of top 200 retirement funds increased by 4.6% to $2.58 trillion in the year ended Sept. 30 and by 44.4% over the prior five years.
The vast majority — 166 — of the 200 largest retirement funds in P&I's universe experienced positive asset growth in the year ended Sept. 30, but only 22 saw assets rise at least 10% in the year.
The pace of growth slowed for both DB and DC plans in P&I's top 200 universe compared to prior years.
As of Sept. 30, 2018, assets of the top 200 DB plans rose 4.4% compared to the previous year and were up 22.4% over the previous five years. Assets managed in top 200 DC plans increased 10.7% in the year ended Sept. 30, 2018, and 53.5% over the five-year period.
Lower aggregate growth rates among the largest U.S. retirement funds were largely performance-related, thanks to sharp market declines in fourth quarter 2018, when the S&P 500 index fell 13.5%, one of the worst declines since the financial crisis, sources said.