Divide Between Private, Public Sectors on DC vs. DB Assets Persists

By ASPPA Net Staff • February 23, 2015 • 0 Comments
More divides private and public employees than the kind of employer for which they work — what kind of retirement plan is available to them, and how many assets are available in each kind, varies as well. Pensions & Investments reports that the answer for each is the opposite of the other.

By the end of the third quarter last year, private-sector defined contribution plans sponsored by the 200 largest retirement plans gauged by P&I contained almost as much in total assets as did private-sector defined benefit plans. Those DC plans are on course to overtake their DB counterparts in that regard.

But if that happens, those plans will not be unique — P&I says that the DC assets of its P&I 1,000 have exceeded DB assets since September 2013. And that has only become more entrenched: one year later, the gap had tripled from $82 billion to $246 billion.

A further sign of the relative rise of private-sector DC plans relative to DB plans: of the 619 corporate retirement plans in the P&I 1,000, 516 have both DC and DB plans, and nearly one-third — 103— have only a DC plan. The figures are similar for the P&I 200: of the 99 corporate retirement plans on that list, 91 have DC and DB plans, eight have only a DC plan and none have only a DB plan.

Public-sector plans are the ying to private-sector plans’ yang. Among the public-sector retirement plans in the P&I 200, DB plan assets amounted to $3.204 trillion; DC assets were less than 10% of that, $189.7 billion. Approximately half of the public-sector plan sponsors in the P&I 200 offer DB and DC plans, and almost as many have only DB plans. Just 8% offer only a DC plan.