Total U.S. retirement assets hit $24.1 trillion in the first quarter of 2016, up 0.6 percent from the end of December, but off the high of $24.4 trillion achieved in the first two quarter of 2015, according to the Washington, D.C.-based Investment Company Institute.

Retirement assets accounted for 34 percent of all household financial assets by the end of the first quarter this year.

ICI’s data counts assets in IRAs, defined contribution plans, private sector defined benefit plans, public sector defined benefit plans, and annuity reserves. It does not factor the circulation of Social Security benefits.

Assets in each category have held steady since 2014. IRA accounts were up 1 percent from the end of 2015, and hold the largest portion of retirement assets, at $7.4 trillion. Defined contribution plans were up 1.6 percent in the quarter, closing at $6.8 trillion.

Of assets in defined contribution plans, 401(k)s accounted for $4.8 trillion, and 403(b) plans held $876 billion. The Federal Employees Retirement System Thrift Savings Plan for federal employees held $434 billion.

Mutual funds managed $3.7 trillion, or more than half, of all defined contribution assets, as $2.2 trillion of those assets were held in equity funds, the most common asset class. ICI represents the interests of mutual fund companies and money mangers.

Total target date-fund assets increased 3.5 percent in the first quarter, totaling $790 billion, an all-time high; 88 percent of target date fun assets were held in defined contribution plans.

This summer will mark the 10th anniversary of the 2006 Pension Protection Act, which paved the way for target-date funds as qualified default investment alternatives in 401(k) and other defined contribution plans.

In 2007, just after the law was enacted, target date funds held $183 billion. By 2012, that number had shot to $481 billion, and by 2014, target date funds eclipsed the $700 billion threshold. The total of $790 billion at the end of the first quarter this year was a nearly $30 billion increase from the end of 2015.

The Standard and Poor’s 500 index and the Dow Jones Industrial Average rose 0.8 and 1.5 percent higher at the end of the first quarter, respectively, indicating that the growth in target-date funds was more from plan participants being automatically enrolled, or re-enrolled into target-date funds than from market gains.

Instant Insights /

Target-date fund assets post another all-time high in Q1

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