PLANSPONSOR - September 2017 - 12

Plan Analysis
T
Highlights of BrightScope's proprietary research
here has been growing industry
discussion about flows in and out
of retirement plans and how the
impending retirement of Baby Boomers
will drain dollars from defined contribution
(DC) plans. However, the rise of automatic
enrollment, the seemingly strong
savings behavior of the Millennials and
the upward trend in the financial markets
seem to be counterbalancing factors.
A careful look reveals a balanced
picture of the dynamics of DC market
flows and what sponsors should expect.
While net flows in defined contribution
plans have been trending lower, 2015
Employee Retirement Income Security
Act (ERISA) data BrightScope obtained
from the Department of Labor (DOL)
reveals some encouraging developments.
In spite of total participant outflows
increasing in 2014, qualified defined
contribution plan assets have continued to
soar, to over $5 trillion, representing more
than 700,000 plans and more than 85
million participants.
The defined contribution market has
grown to such an extent that it is unaffected
by a slightly negative outflow. 401(k)
and 403(b) plans continue to be popular
options by which American workers
save for retirement. Based on the same
BrightScope ERISA data, cash contributions
to DC plans have grown steadily-
on average, 5% annually-from 2009
through 2015.
During and after the Great Recession,
most near-retirees deferred their retirement
decision. That promised a pent-up
demand for retirement plan assets later in
the decade, and the industry is seeing the
release of that demand now.
Consequently, while DC inflows
12 PLANSPONSOR.com September 2017
$5mm
$4mm
$3mm
$2mm
$1mm
$0mm
2009
2010
2011
2012
2013
2014
2015
Total DC Assets and Cash Flows
n Net assets n Total cash contributions n Total benefit payments n Net cash flow
$6mm
$5mm
$4mm
$3mm
$2mm
$1mm
$0mm
$-1mm
2009
2010
2011
continue to rise, DC withdrawals have
accelerated notably. Two factors are at
work here. First, a strong bull market
in the past several years has allowed
participants to feel comfortable enough
to retire. Indeed, in 1999 and 2000, the
Investment Company Institute (ICI)
noted this same trend occurring at the
tail end of a bull market. Second, the Baby
2012
Source: BrightScope, a Strategic Insight company
Boom generation is approaching the end
of their careers, and many have begun
withdrawing funds from their DC plans.
With net assets increasing, the market
has reached escape velocity. Demography is
working in favor of retirement cash flows,
and it is our perspective that the market
opportunity is on pace for continued
growth. -PS
2013
2014
2015
-$20b
-$30b
Future Flows of DC Assets
Assets vs. Flows
n Participant contributions l Employer contributions
$6mm
$60b
$50b
$40b
$30b
$20b
$10b
$0b
-$10b

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PLANSPONSOR - September 2017

Table of Contents for the Digital Edition of PLANSPONSOR - September 2017

Harvesting the Right Facts and Figures
2017 target-Date Fund Buyer's Guide
Allocating Benefit Dollars
Keeping Money in the Plan
Strategic Timing
Rothification of DC Plans
PLANSPONSOR - September 2017 - Cover1
PLANSPONSOR - September 2017 - Cover2
PLANSPONSOR - September 2017 - 1
PLANSPONSOR - September 2017 - 2
PLANSPONSOR - September 2017 - 3
PLANSPONSOR - September 2017 - 4
PLANSPONSOR - September 2017 - 5
PLANSPONSOR - September 2017 - 6
PLANSPONSOR - September 2017 - 7
PLANSPONSOR - September 2017 - 8
PLANSPONSOR - September 2017 - 9
PLANSPONSOR - September 2017 - 10
PLANSPONSOR - September 2017 - 11
PLANSPONSOR - September 2017 - 12
PLANSPONSOR - September 2017 - 13
PLANSPONSOR - September 2017 - 14
PLANSPONSOR - September 2017 - 15
PLANSPONSOR - September 2017 - 16
PLANSPONSOR - September 2017 - 17
PLANSPONSOR - September 2017 - 18
PLANSPONSOR - September 2017 - 19
PLANSPONSOR - September 2017 - 20
PLANSPONSOR - September 2017 - 21
PLANSPONSOR - September 2017 - 22
PLANSPONSOR - September 2017 - 23
PLANSPONSOR - September 2017 - 24
PLANSPONSOR - September 2017 - 25
PLANSPONSOR - September 2017 - Harvesting the Right Facts and Figures
PLANSPONSOR - September 2017 - 27
PLANSPONSOR - September 2017 - 28
PLANSPONSOR - September 2017 - 29
PLANSPONSOR - September 2017 - 30
PLANSPONSOR - September 2017 - 31
PLANSPONSOR - September 2017 - 2017 target-Date Fund Buyer's Guide
PLANSPONSOR - September 2017 - 33
PLANSPONSOR - September 2017 - 34
PLANSPONSOR - September 2017 - 35
PLANSPONSOR - September 2017 - 36
PLANSPONSOR - September 2017 - 37
PLANSPONSOR - September 2017 - 38
PLANSPONSOR - September 2017 - 39
PLANSPONSOR - September 2017 - 40
PLANSPONSOR - September 2017 - 41
PLANSPONSOR - September 2017 - 42
PLANSPONSOR - September 2017 - 43
PLANSPONSOR - September 2017 - Allocating Benefit Dollars
PLANSPONSOR - September 2017 - 45
PLANSPONSOR - September 2017 - 46
PLANSPONSOR - September 2017 - Keeping Money in the Plan
PLANSPONSOR - September 2017 - 48
PLANSPONSOR - September 2017 - 49
PLANSPONSOR - September 2017 - Strategic Timing
PLANSPONSOR - September 2017 - 51
PLANSPONSOR - September 2017 - Rothification of DC Plans
PLANSPONSOR - September 2017 - 53
PLANSPONSOR - September 2017 - 54
PLANSPONSOR - September 2017 - 55
PLANSPONSOR - September 2017 - 56
PLANSPONSOR - September 2017 - Cover3
PLANSPONSOR - September 2017 - Cover4
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