Axiomatic Data will be at the Investment Company Institute's Defined Contribution Alternatives Summit on November 10 in New York. Ahead of it, here is a cut of the 401(k) market that most alternatives distribution teams never look at. It comes from the plan-year 2025 Form 5500 filings the Department of Labor released last month.
Alternatives in defined contribution plans, such as private markets sleeves inside target-date funds and collective trusts, are sold to plan committees, consultants and recordkeepers. Distribution teams have limited time, so most draw a line on plan assets and don't call plans below it. For many, that line is $250 million.
Just under it sit about 730 401(k) plans holding $200 million to $250 million each. On a list sorted by assets they look interchangeable: mid-sized plans one good market year away from the target. Their filings show they are not all the same.
We matched 690 of those plans to their own filings from three years earlier and compared two things from the Form 5500: active participants and total contributions (employer plus employee).
249 of them grew. Active participants rose at least 10% and contributions at least 25% over the three years. The median grower added 30% to its headcount and 50% to its contributions.
The rest of the band went the other way. Those plans lost 5% of their active participants over the same three years and grew contributions by 8%, less than inflation.
| Over three years | Growers (249) | Rest of the band |
|---|---|---|
| Active participants | +47% | −5% |
| Contributions | +64% | +8% |
| Fresh contributions per dollar of assets | 9 cents | 6.3 cents |
The growers are a third of the plans in the band, but they take in 45% of its new money, $5.3 billion a year. Money that arrives as contributions each year is invested through the current menu, which is why a menu change matters more in a plan with high inflows.
We ran the same screen on the 2024 filings a year ago. Of the growers that have filed since, 68% are now over $250 million. Of the rest of that band, 47% are.
A screen on plan assets shows both groups as the same $220 million plan, but only one of them is moving. Plans don't stop at the threshold: a plan crossing $250 million on contribution growth will often keep growing, and a team that waits for it to show up above the line meets it after its committee has started making decisions.
We ranked the 249 on both growth rates together and looked up how each of the fastest grew. About half bought their way there: a roll-up, a carve-out, a franchisee absorbed into the parent's plan. The other half hired.
Either way the investment committee oversees a bigger plan than it did three years ago, often with new participants whose ages, balances and pay differ from the old ones, and a fund menu built for the old plan. These are the conditions under which committees review their lineup, and the review is when an alternatives allocation gets considered.
Everything above comes from public data: the annual Form 5500 each plan files with the Department of Labor.
Contributions are a sharper signal than assets. Asset growth mixes market returns with new money, while contributions measure how much new money comes in from the payroll each year.
Axiomatic Data's Plan Search runs this kind of screen on every large-plan filing:
Each plan's page shows its holdings, costs and providers by year, so you can see what the committee offers today before the first call.
We'll be at the ICI Defined Contribution Alternatives Summit on November 10. If you'd like the top 10 growers, with names, email info@axiomaticdata.com or comment on our LinkedIn post and we'll send it to you.