August 18, 2011
--- The third-party administrator (TPA) marketplace has a 30% influence on 401(k) assets, according to Cerulli Associates. ---
The survey analysts see this percentage increasing in the future and their influence expanding into the 403(b) market.
The 30% of assets that TPAs have "influence" over represents nearly $850 billion in 401(k) assets, compared to the broader 401(k) market at $2.9 trillion as of year-end 2010. When 403(b) assets are included, TPAs influence $968 billion in total assets.
“Our survey reveals that the majority of TPA firms (71%) are servicing 401(k) plans. TPAs are especially prolific in the small- and mid-sized plan markets (plans with 401(k) assets between $1 million and $50 million)," said Tom Modestino, head of Cerulli’s retirement practice. "Currently, 403(b) plans represent only about 10% of TPAs' product mix. However, recent legislative changes, especially on ERISA-based plans, present more opportunities for TPAs to scale their 401(k) expertise to meet the legislative needs of this market."