Retirement & Pension Plans in the US Industry Market Research Report Now Available from IBISWorld

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Retirement and pension plans suffered a sharp setback during the subprime credit crisis, when industry assets crashed. Plan sponsors, still recovering, now have several new issues to contend with. Among these is the growing number of aging and retiring baby boomers, who are due to receive pension payments. However, many pension plans (and Social Security) are severely underfunded. As a result, most plans are becoming defined contribution plans, which shift responsibility to the individual. For these reasons, industry research firm IBISWorld has added a report on the Retirement & Pension Plans industry to its growing industry report collection.

IBISWorld Market Research

IBISWorld Market Research

Rather than fund retirement, individuals are rebuilding savings accounts and paying off debt

On June 2, 2009, General Motors filed for bankruptcy in part due to their struggle to finance healthcare costs and retirement obligations. The company's collapse illustrates the risks associated with defined benefit (DB) programs such as pension plans, which dictate the benefits a sponsor must provide rather than the contributions employees must give. Firms have moved away from DB programs toward defined contribution (DC) plans over the past 20 years to lower the costs associated with retirement obligations. “The financial meltdown decimated the Retirement and Pension Plans industry in 2008,” says IBISWorld industry analyst Doug Kelly, when assets decreased 29.1% or $3.4 trillion. Industry assets have recovered somewhat since, but in 2012, asset levels are only expected to rise 1.5% to $8.9 trillion. Overall, industry assets are expected to decline an average of 5.3% annually over the five years to 2012, largely due to the massive drop during the recession. Over the five years to 2017, though, industry assets are forecast to increase at a marginal annualized rate. Even so, assets will remain well below their 2007 peak.

The dramatic decline in asset values during the recession will continue to reshape Retirement and Pension Plans industry trends for years. Companies responsible for meeting DB obligations will have to increase contributions to rebuild asset reserves. At the same time, Kelly says, “Individual contributions are projected to continue to decrease.” The spike in unemployment and slow economic recovery will reduce individual contributions as people look to rebuild personal savings and pay down existing debt. DC plans outnumber defined benefit plans; therefore, the decline in individual contributions will slow overall contribution levels.

It is also important to note that this report does not use a standard definition of revenue; instead, revenue is labeled as investment income or losses plus total contributions. The fees that an asset or custodial manager charges a retirement fund are not counted as revenue in this industry. Instead, the fees associated with these services are recorded in the Portfolio Management (IBISWorld report 52392) and Custody, Asset and Securities Services industries (52399). For more information, visit IBISWorld’s Retirement & Pension Plans report in the US industry page.

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IBISWorld industry Report Key Topics

The industry comprises legal entities (e.g. funds and plans) that provide retirement saving and income benefits exclusively for the sponsor's employees or members. Plans can be based on defined benefit or defined contribution. Revenue in this industry refers to total contributions plus net investment income or losses, while establishments refer to the number of funds. Fees from portfolio management, custodial operations or other third-party services are not included in this report.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.

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