Mixed Results for Retirement Funds in 2nd Quarter, July

By ASPPA Net Staff • August 04, 2016 • 0 Comments
There is qualified good news for retirement plans based on results concerning second quarter and July performance, according to two recent analyses.

Average 401(k) and IRA balances grew from the first to the second quarter of 2016, reports Fidelity Investments. Average 401(k) balances grew by almost 2% since the first quarter; average IRA balances grew slightly from $89,300 to $89,700.

But while those average balances grew from one quarter to the next, they are smaller than they were in the second quarter of 2015. Average 401(k) balances in the second quarter of this year were 2.5% lower than those of the same period last year; average IRA balances were almost 7% lower.

There was an exception, however: average balances of 401(k)s held by Millennials who have participated in a 401(k) plan for at least a decade were nearly 10% higher than they were in the second quarter of 2015.

As for pension plans, October Three Consulting reports that in July the model plans they track also showed mixed results. The gains the stock market made in July spelled growth for balances; however, low interest rates caused pension liabilities to grow, too, says October Three.

Willis Towers Watson made a similar report concerning how pensions fared in July 2016. Their Pension Watch says that strong equity returns resulted in higher assets, and falling interest rates drove liabilities up at the same time — and as a result, its pension index was essentially the same as it had been at the start of the month.