The proportion of plans taken over from other providers is double that of new, start-up plans—much higher than in the fourth quarter of 2009 (26%) and only slightly lower than in the first quarter of 2009 (37%), according to LIMRA’s 401(k) Scorecard for Q110. Average assets per plan, account balances, and participants per plan decreased from the fourth quarter of 2009 for plans taken over and new plans except for participants per new plan, which has remained constant.
Compared with the first quarter of 2009, the average assets per takeover plan have dropped by a factor of 10, due in large part to two companies’ large plan sales in that quarter, and the average assets per new plan are slightly higher this quarter. Average takeover participant account balances are on par with last year, and for new plans, the average account balance is about double that of 2009.
Average assets for new plans declined sharply from last quarter, but remain higher than a year ago and slightly above the average for the past 12 quarters. Assets for plans taken over remain relatively low and are 49% lower than the average for the previous 12 quarters—indicating more smaller plans than larger plans are on the move for new providers.
LIMRA noted that although the trend since the third quarter of 2008 continues, with more takeover than new plans being reported, the percentages for the past three quarters are very similar—indicating the trend is leveling and setting up for a reversal as economic conditions improve.
For the group of 14 providers participating in the first and last quarters of 2009 and the first quarter of 2010, the numbers of plans sold were 37% and 15% higher than in the fourth quarter of 2009 and the first quarter of 2009, respectively. The 14 participants in the first quarter Scorecard survey sold a total of 5,931 401(k) plans, representing 230,434 participants and $7.4 billion in assets.