Assets in 403(b) plans, the tax-deferred defined-contribution option for non-profit and educational institutions, are fast approaching the $1 trillion mark, new data from the Investment Company Institute shows.
That's compared to the $4.7 trillion held in 401(k) plans.
While the ICI's new data on the non-profit workplace savings option shows 403(b) plan design is benefiting from greater diversification and cost benefits, one attribute jumps off the page.
Variable annuities hold 27 percent of 403(b) assets, and fixed annuities claim another 26 percent.
Those numbers are the envy of proponents of annuitizing 401(k) assets, who are fighting an uphill battle in the effort to create guaranteed income streams from plan savings.
Annuities occupy little space in 401(k) plans. According to the Employee Benefit Security Administration, less than 1 percent of all workplace defined contribution plans even offer annuities in investment lineups.
The disparity is not necessarily because sponsors of 403(b) plans take the paternalistic approach to plan design that many advocates of retirement security wish 401(k) sponsors would take.
Nor is it necessarily due to the non-profit sector being more politically and culturally aligned with the defined benefit culture of days past.
Mike Ericson, a research analyst at LIMRA, which tracks annuity sales, cautions against comparing the primary savings options in the for-profit and non-profit world.
