Retirement savings is a critical component of a household's overall financial wellness and the 401(k) plan is one of the predominant ways that Americans save for retirement. We wanted to take a closer look at the continued growth of the industry and were able to do so by using the Form 5500 Datasets from the U.S. Department of Labor.
Assets in 401(k) plans grew to $7,645,461,744,718 for 2021. There were 624,158 401(k) plans.
The five states with the most 401(k) assets are:
Over half (54%) of all 401(k) plans have less than a million in assets. 85% have less than $5 million in assets.
California has by far the most 401(k) plans with 86,974--almost double New York in second place with 45,185.
The District of Columbia has the highest ratio of large plans with almost 2% of plans there having more than $100 million in assets. Illinois and Minnesota also have more than 1.5% of plans in that range.
| State | < $1MM | $1-$5 MM | $5-$20MM | $20MM-$100MM | $100MM+ |
|---|---|---|---|---|---|
| Armed Forces Americas | 1 | ||||
| Armed Forces Europe | 1 | ||||
| Alaska | 607 | 457 | 156 | 45 | 16 |
| Alabama | 2918 | 2184 | 771 | 210 | 57 |
| Armed Forces Pacific | 1 | ||||
| Arkansas | 1690 | 1063 | 348 | 83 | 26 |
| American Samoa | 7 | 1 | |||
| Arizona | 7306 | 2754 | 761 | 184 | 78 |
| California | 57297 | 25591 | 8017 | 2103 | 681 |
| Colorado | 8116 | 3506 | 1027 | 312 | 91 |
| Connecticut | 5028 | 3497 | 1293 | 348 | 130 |
| District of Columbia | 1747 | 1061 | 506 | 185 | 67 |
| Delaware | 1472 | 741 | 223 | 64 | 25 |
| Florida | 22003 | 8678 | 2184 | 544 | 192 |
| Georgia | 9526 | 4727 | 1542 | 492 | 207 |
| Guam | 293 | 90 | 23 | 5 | |
| Hawaii | 1464 | 1007 | 302 | 62 | 24 |
| Iowa | 2162 | 2116 | 829 | 267 | 61 |
| Idaho | 1641 | 916 | 228 | 68 | 16 |
| Illinois | 12243 | 8705 | 3499 | 1036 | 436 |
| Indiana | 4793 | 3490 | 1213 | 367 | 103 |
| Kansas | 2432 | 1926 | 747 | 199 | 50 |
| Kentucky | 2517 | 1930 | 709 | 196 | 50 |
| Louisiana | 3169 | 2307 | 862 | 203 | 51 |
| Massachusetts | 11750 | 6917 | 2477 | 736 | 264 |
| Maryland | 7394 | 4533 | 1614 | 440 | 99 |
| Maine | 1417 | 842 | 295 | 92 | 23 |
| Michigan | 9354 | 6514 | 2318 | 690 | 203 |
| Minnesota | 5956 | 4450 | 1806 | 566 | 205 |
| Missouri | 4710 | 3360 | 1168 | 348 | 136 |
| Northern Mariana Islands | 45 | 4 | 3 | ||
| Mississippi | 1199 | 985 | 306 | 74 | 17 |
| Montana | 1050 | 695 | 206 | 44 | 10 |
| North Carolina | 8715 | 4806 | 1375 | 419 | 143 |
| North Dakota | 745 | 707 | 245 | 64 | 21 |
| Nebraska | 1612 | 1276 | 561 | 157 | 45 |
| New Hampshire | 2036 | 1188 | 355 | 111 | 21 |
| New Jersey | 12862 | 7616 | 2508 | 661 | 274 |
| New Mexico | 1435 | 746 | 204 | 49 | 11 |
| Nevada | 3333 | 1099 | 286 | 77 | 24 |
| New York | 24662 | 14360 | 5102 | 1464 | 519 |
| Ohio | 10438 | 8213 | 2819 | 849 | 264 |
| Oklahoma | 2665 | 1638 | 594 | 168 | 45 |
| Oregon | 5555 | 2960 | 893 | 221 | 75 |
| Pennsylvania | 12207 | 9180 | 3364 | 951 | 323 |
| Puerto Rico | 339 | 130 | 36 | 11 | 6 |
| Palau | 1 | ||||
| Rhode Island | 1498 | 942 | 315 | 63 | 29 |
| South Carolina | 4034 | 1992 | 573 | 176 | 41 |
| South Dakota | 642 | 529 | 208 | 65 | 8 |
| Tennessee | 4559 | 2880 | 1006 | 308 | 127 |
| Texas | 22236 | 11006 | 3749 | 1160 | 505 |
| Utah | 3357 | 1597 | 486 | 166 | 50 |
| Virginia | 8493 | 5430 | 2054 | 621 | 226 |
| Virgin Islands | 67 | 33 | 8 | 1 | |
| Vermont | 700 | 535 | 212 | 61 | 6 |
| Washington | 7815 | 4143 | 1492 | 457 | 133 |
| Wisconsin | 5238 | 4456 | 1823 | 594 | 170 |
| West Virginia | 962 | 820 | 265 | 46 | 9 |
| Wyoming | 546 | 326 | 81 | 15 | 1 |
The median plan assets are $643,750 which reflect the majority of plans having less than a million in assets. The average assets in a 401(k) plan is $12,092,141 (18.8x the median assets).
Assets are concentrated in the largest plans with the top 1% of plans holding 74% of all assets.
The top 1% of the top 1% (63 plans) hold 19.8% of all assets.
Assets are concentrated in large plans with plans of over a thousand participants being just 1.1% of plans yet holding over 74% of all assets.
Accounts are similarly concentrated in large plans with 67% of accounts in 1.18% of plans.
Over 91% of plans have 100 or less participants yet the average plan has 108 participants.
| Plan Size (Participants) | Plan Count | Total Assets | Participant Count |
|---|---|---|---|
| 0 or Null | 27793 | $8,603,881,026.00 | 0 |
| 1-10 | 275127 | $192,969,941,712.00 | 1,379,444 |
| 11-100 | 268567 | $788,158,053,448.00 | 8,430,731 |
| 101-500 | 39261 | $693,407,345,247.00 | 8,254,755 |
| 501-1000 | 6045 | $356,137,632,486.00 | 4,219,134 |
| 1001-10000 | 6536 | $1,906,547,766,427.00 | 17,845,580 |
| 10001+ | 829 | $3,699,637,124,372.00 | 27,458,688 |
A better measure of the retirement account health of Americans would be median 401(k) assets by age but the Department of Labor does not have that underlying data available. The median balance is certainly much less than the average balance shown below.
According to the U.S. Bureau of Labor Statistics the median age of workers in the U.S. is 42.
The vast majority of plans did not report fees as a Schedule C is only filed if a service provider is paid $5,000 or more. Thus, the below metrics only reflect the plans that did report.
The fact that larger plans tend to be fixed fee is reflected in the average advisory fees.
| Plan Size | % of assets |
|---|---|
| < $1MM | 1.19% |
| $1-$5 MM | 0.32% |
| $5-$20MM | 0.20% |
| $20MM-$100MM | 0.10% |
| $100MM+ | 0.01% |
The average advisory fees are a poor metric as they reflect the total fees divided by the total assets--for every dollar in 401(k) assets the advisory fees are 2bps. They do not reflect the average fees that a plan or participant pay.
The median fees are the advisory fees that the median 401(k) plan pays.
The scale of large plans allows them to pay less in recordkeeping fees both as a percentage of assets as well as per-participant.
| Plan Size | Per Participant Cost | % of assets |
|---|---|---|
| < $1MM | $69.46 | 1.29% |
| $1-$5 MM | $65.99 | 0.31% |
| $5-$20MM | $81.28 | 0.18% |
| $20MM-$100MM | $71.61 | 0.10% |
| $100MM+ | $38.97 | 0.03% |
The average cost for recordkeeping has been hovered around 5 bps for the past eleven years while the median cost has risen sharply over the past six.
This is a somewhat counterintuitive as fees trend down across the industry. It comes from market performance from 2009 to 2021--and the corresponding gross increase in asset-based fees--versus the smaller increase in number of participants.
Of the plans that reported recordkeepers, Fidelity is the 800-pound gorilla. These numbers reflect not only that they are the most common choice of recordkeepers but that they are the primary choice of large plans.
| Recordkeeper | % of Plans | % of Participants | % of Assets |
|---|---|---|---|
| Fidelity | 31.25% | 57.71% | 66.37% |
| Great-West | 18.54% | 9.40% | 6.56% |
| ADP | 13.76% | 4.29% | 1.89% |
| John Hancock | 8.31% | 2.13% | 1.10% |
| Transamerica | 7.22% | 5.55% | 3.33% |
| Capital Group | 2.80% | 0.96% | 0.70% |
| Newport Group | 2.61% | 1.21% | 0.86% |
| Paychex | 1.93% | 0.51% | 0.15% |
| Wells Fargo | 1.82% | 3.43% | 2.54% |
| Merrill Lynch | 1.81% | 3.63% | 3.85% |
There is larger variance in advisory firms than in recordkeepers but you can see Fidelity (Strategic Advisors) is the second largest firm here as well.
| Advisory Firm | % of Plans | % of Participants | % of Assets |
|---|---|---|---|
| Advised Assets Group | 9.88% | 4.87% | 3.01% |
| Strategic Advisors | 8.39% | 29.85% | 34.86% |
| Wilshire Associates | 5.29% | 2.48% | 1.77% |
| Morgan Stanley | 1.61% | 0.72% | 0.48% |
| LPL Financial | 1.45% | 1.10% | 0.70% |
| Merrill Lynch | 2.20% | 0.84% | 0.44% |
| Kestra | 1.32% | 0.75% | 0.48% |
| Global Retirement Partners | 2.22% | 1.27% | 0.79% |
| UBS | 1.51% | 0.93% | 0.84% |
| American Funds | 2.82% | 2.70% | 2.24% |
| Vanguard | 2.22% | 2.69% | 2.27% |
| Mass Mutual | 1.81% | 1.92% | 1.63% |
| Resources Investment Advisors | 1.21% | 0.68% | 0.44% |
| Invesco | 1.93% | 1.95% | 1.57% |
| National Financial Services | 1.77% | 4.01% | 3.54% |
| MFS Investment Management | 1.75% | 1.76% | 1.34% |
| JP Morgan | 1.54% | 1.41% | 1.12% |
| T. Rowe Price | 1.39% | 1.63% | 1.67% |
| Fidelity | 1.11% | 1.41% | 1.23% |
| Blackrock | 1.21% | 1.53% | 1.48% |
There was a lot of noise in the defined-benefit plan data but we wanted to include it here as it as a way to look at the transition from defined-benefit to defined-contribution plans.
Contact us to learn how we can help your participants achieve their financial goals.
