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America’s sprawling 401(k) pension system will turn cash flow negative in 2016, threatening disruption for asset managers and selling of equities, according to analysis by Cerulli Associates, a research house. Cerulli went on to say "It is going to be a disappointment for a lot of fund managers that have put a lot of effort into the DC [defined contribution pension fund] market."
However, by 2016 it forecasts that inflows will be $364 billion and outflows $366 billion, with the deficit only widening year on year after that as the core of the baby-boomer generation retires. "This has significant implications for asset managers and other financial services providers," said Bing Waldert, a director at Cerulli. "For asset managers, the consistent contributions are particularly appealing and provide a source of positive flows even in poor markets when a firm may experience outflows from other segments of the industry." The largest managers in the 401(k) market are Fidelity Investments; Canada's Power Financial, which owns Great-West Financial and Putnam Investments; TIAA-CREF; Vanguard; ING of the Netherlands and Prudential Financial of the US.
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