Sagging U.S. and international equity markets are to blame for a 2% drop in retirement assets held in mutual funds last year, according to a report issued by the Investment Company Institute.

Fund assets held in employer-sponsored defined contribution plans and IRAs fell to $2.04 trillion in 2000 from $2.46 trillion in 1999, according to the report.

Mutual fund assets in IRAs fell 1% from $1.24 trillion in 1999 to $1.23 trillion in 2000. Between 1990 and 2000, IRAs were the fastest growing sector of the retirement market. IRA assets grew from 16% of total retirement assets in 1990 to 23% in 2000, according to the ICI.

Last year, fund assets in defined contribution plans dropped 3% to $1.17 trillion from $1.21 trillion in 1999. The most significant decrease occurred in 403(b) plans and 401(k) plans, according to ICI figures. Last year, fund assets in 403(b) plans dropped $6 billion to $113 billion and 401(k) assets sank $14 billion to $766 billion from 1999.

In 2000, mutual fund assets made up 21% of the $11.5 trillion held in U.S. retirement plan assets, the same as the previous year, according to the ICI.

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