Although more participants in defined contribution plans are from Gen Y or Gen X, boomers hold a larger percentage of assets, according to an analysis by MassMutual of retirement plans administered by the firm.
MassMutual announced Nov. 16 that 55% of participants in its plans were age 47 or younger; 41% of participants were between ages 48 and 66. The company administers plans for approximately 1.6 million participants.
There are several factors affecting the age distribution of MassMutual's DC participants, Steve LaValley, second vice president of market research with MassMutual's Retirement Services Division, told AdvisorOne by email on Tuesday.
"The biggest one is that there are more Gen Y workers in the workforce than in the past as they move on from school into the workforce, aided by a gradually improving employment market," he said. "Another factor, more specific to MassMutual, is that we have had record sales of retirement plans in the past couple of years and the retirement plans we have gained have had a younger demographic than our existing plan base."
Furthermore, older boomers are retiring, pushing the age distribution more heavily to younger groups, he added. In spite of that, boomers hold 61% of assets, while younger participants account for just 31% of assets.
"The biggest reason is they have been in their employer plans for a longer period of time, so they have experienced the benefits of market growth along with having had more years of savings (and employer contributions) than younger workers," LaValley said. They also tend to be in better financial health and are able to save more than younger participants, he suggested.
