The IRA market will account for 35.4 percent of total retirement market assets by the end of 2018, according to Cerulli Associates.
The increase marks continuing growth in the IRA market from 26.7 percent in 2002, says the Cerulli study.
“We anticipate the [IRA] market reaching $9 trillion by 2018,” says Bing Waldert, Cerulli director. “The DB market continues to lose marketshare as DC [defined contribution] plans garner more adoption and IRAs capture DC rollovers.”
“The lack of widespread use of in-plan retirement income solutions means assets accumulating in a DC plan will eventually shift to an IRA,” adds Waldert.
IRA growth is attributed to an aging population that will continue to shift assets from employer-sponsored plans to the IRA segment, according to the study. As participants retire from the workforce, early communication regarding withdrawal options is essential if the plan provider wants to retain assets, Cerulli says.
The other retirement plan market anticipated to grow over the next four years is the public defined contribution market, which will have 8.3 percent of the market compared to 7 percent in 2002, the first year Cerulli conducted the study.
Public and private defined benefit plans are declining, according to the study, while private defined contribution plans will hold relatively steady.