The combination of a robust U.S. equity market and the proliferation of company-sponsored retirement plans helped push total assets in 401(k) pans over the $3 trillion threshold at close of last year, up 13% from 2009.
According to the Society of Professional Asset-Manager and Record Keepers (SPARK) and the SPARK Institute, more than 74 million U.S. workers were participating in more than 536,000 different 401(k) plans, up from 73.4 million workers and 510,000 plans, respectively, in 2009.
"Strong performance across all equity sectors, especially in the U.S. market over the second half of 2010, coupled with positive returns in the bond markets, helped push total retirement market assets over $16 trillion by year-end 2010," Bob Wuelfing, president of RG Wuelfing & Associates, the market research and consulting firm responsible for the report.
This spike in 401(k) contributions and asset values comes at a time when more and more Americans admit that social security benefits will represent most if not all of their income in retirement.
For 401(k) plan administrators, the focus now is less on shaving a few basis points off the fees firms and advisors demand for their services and instead on getting their employees retirement ready using 401(k) plans in concert with other investment products and strategies.
The SPARK report found that almost 70% of 401(k) participants had their account balances in stocks at the end of the year, including the equity portion of balanced, life cycle, risk-based asset allocation and target date funds.
It also predicts that between 20,000 and 22,000 new 401(k) plans will materialize in 2011 with most of these new programs formed at small companies.
Last week, the Investment Company Institute confirmed that total U.S. retirement assets surged to more than $17.5 trillion last year, up 9.1% overall from 2009.
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