U.S. Retirement Assets: $15 Trillion

U.S. seniors have stashed away retirement assets worth $15 billion, according to a new study by Watson Wyatt, a major consulting firm.

This is a huge number, larger than the gross domestic product.

“In the United States,” said Watson Wyatt, “most retirement plan assets (59 percent) are invested in equities, while less than a quarter (23 percent) are in bonds and 17 percent in alternative assets, which include hedge funds, private equity, real estate, commodities and infrastructure. While the amount in equities has remained relatively stable over the last 10 years, the portion in alternatives has grown (from 9 percent in 1997) and the share in bonds has declined (from 33 percent in 1997).”

“The move to alternatives is helping pension plan sponsors get more out of their assets while reducing overall risk,” said Mark Ruloff, director of asset allocation at Watson Wyatt. “However, employers need to closely monitor these investments through appropriate governance strategies. This is crucial to ensuring that fees associated with these investments don’t eat too deeply into returns.”

According to the report, “the makeup of U.S. retirement assets has changed considerably over the last 10 years. The share of assets in defined contribution plans, such as 401(k)s, and individual retirement accounts has increased, from 47 percent to 56 percent with defined benefit assets diminishing accordingly.”

The Global Pension Assets Study analyzes retirement assets in the United States, Australia, Canada, France, Germany, Hong Kong, Ireland, Japan, Netherlands, Switzerland and the United Kingdom. More information about the study can be found at http://www.watsonwyatt.com/globalpensionassets.

Watson Wyatt (NYSE:WW) (NASDAQ:WW) has 7,000 associates in 32 countries and is located on the Web at http://www.watsonwyatt.com/.

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