Will Retirement Plan Assets Decrease?

Data extracted by the Department of Labor’s (DOL)’s Employee Benefits Security Administration (EBSA) from 2014 Form 5500 reports finds defined benefit (DB) retirement plans are not disappearing.

The total number of retirement plans increased in 2014 to approximately 685,000 plans—a 0.6% increase over 2013. The number of defined contribution (DC) plans grew by 0.5%, while the number of DB plans increased by 1.6%.

The data also shows the total amount of assets held by retirement plans increased 5.5% to $8.3 trillion in 2014. DB plan assets increased 4.2% to nearly $3.0 trillion, while DC plan assets increased by 6.3% to $5.3 trillion.

However, the report notes that in 2014, 21.4% of DB plans report being fully frozen. Also, 14.9% of total DB plan assets were frozen in 2014.

In 2014, there were 89.9 million active participants in private-sector retirement plans. Approximately 14.5 million were active participants in DB plans, and 75.4 million were active participants in DC plans.

Plans Paying Out More Than They Receive 

DC plan contributions increased by 7.0%, to $403.5 billion in 2014, the Form 5500 data shows. DB plan contributions decreased by 13.9% to $97.9 billion. 

In total, retirement plans disbursed $650 billion for payment of benefits in 2014, with $221.6 billion being disbursed from DB plans and $428.4 billion from DC plans. These payments were made either directly to retirees, beneficiaries, and terminating employees or to insurance carriers for payment of benefits. These amounts reflect an 11% increase for DC plans and a 3.5% decrease for DB plans.

Overall, retirement plans disbursed $148.6 billion more than they received in contributions. DB plans disbursed $123.7 billion more than they collected in contributions, while DC plans disbursed $24.9 billion more than they received in contributions.

The EBSA report is here.