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DC Assets Flat, DB Assets Slip

The assets of the nation’s largest retirement funds slid 2.3%, as pension de-risking moves took their toll on corporate DB plan assets.

Among the 200 largest plans, DC plan assets crept 1.5% higher to close at $1.81 trillion, while DB plans shed 3.6% to $4.58 trillion. Pensions & Investments reports that the top 200 assets overall declined 2.2%, to $6.39 trillion. However, when broken out by type of plan, only public DC plans showed an increase.

Corporate DC plans were flat for the year, while public DB plans dropped 3% and corporate DB plans fell 4.2%. According to P&I, part of the reason corporate DB plans fell more than their public peers is because corporations, in their move to de-risk their plans, have been increasing allocations to fixed income and extending the duration of their fixed-income portfolios.

Assets of the largest 1,000 U.S. retirement plans totaled $8.84 trillion on Sept. 30, a dip of 2.3% from a year earlier. Asset movement among DC plans in the top 1,000 was relatively flat, down 0.3% to $3.01 trillion, while DB plans slipped 3.3%, to $5.83 trillion.

The report notes that corporate DB plans had lower allocations to real estate and private equity than public DB plans, asset classes that performed well relative to public equities and fixed income in 2015. Corporate plans among the top 200 had 6.6% and 5.3%, respectively, in private equity and real estate, compared with public plans’ 9.4% and 8.5% respectively.

Other findings of the survey:

  • DB plan assets accounted for 71.6% of the assets of the top 200 plans, compared with 28.3% for DC plans. A year earlier, the split was 72.6% vs. 27.4%.
  • Separate accounts represented 72% of the assets in DB plans among the top 200, a dip from the 72.8% a year earlier, while commingled vehicles represented 26.4%, up from 25.8%; mutual funds held steady at 1.3%; and exchange-traded funds were 0.3% up from 0.1%.
  • Of the top 200 funds’ DB assets, $1.033 trillion was internally managed, up 2.1% from a year earlier. Of that, $30.6 billion was in alternatives, up 55.3% from the year before.
  • Employer contributions to DB plans in the top 200 were up 8.5%, to $113.5 billion, and benefits paid rose 4.8% to $243.9 billion.