Total U.S. retirement assets fell 12% to $28.7 trillion for the first three months of 2020 vs. the $32.6 trillion in fourth quarter of 2019, according to data published Wednesday by the Investment Company Institute.
The total retirement assets during the first quarter, at the height of the coronavirus economic impact, were the lowest since the $28 trillion for the fourth quarter of 2018.
Each of five retirement categories tracked by ICI fell during the first quarter of 2020 vs. the fourth quarter of 2019, said an ICI news release containing comparative asset data.
Defined contribution plans' assets dropped 12.3% to $7.94 trillion in the first quarter vs. $9.05 trillion for the fourth quarter. These figures encompass all forms of DC plans.
Government defined benefit plans reported assets of $5.95 trillion for the first quarter, down 11.1% from the $6.69 trillion for the fourth quarter.
Private-sector DB plans suffered a 10.5% decline in assets to $3.16 trillion from $3.53 trillion. Annuity reserves declined 7.3% to $2.15 trillion from $2.32 trillion.
Estimated assets of individual retirement accounts were $9.51 trillion for the first quarter of 2020, down 13.8% from the estimated $11.03 trillion for the fourth quarter of 2019.
“Changes in retirement assets reflect the combined impact of new contributions, benefit payments and withdrawals, and investment returns,” wrote Peter Brady, ICI’s senior economic adviser, in an email. “These changes are typically muted compared with popular stock market indices, such as the S&P 500, because pensions and retirement accounts are invested in diversified portfolios.”
Although total retirement assets dropped 12% during the first quarter, that was better than the S&P 500 index which fell by 20%, Mr. Brady wrote. “If there is little change in market prices in the next few weeks, we would expect retirement assets to reverse a large portion of their first-quarter decline in the second quarter,” he added.