The Employee Benefit Research Institute (EBRI) and the Investment Company Institute (ICI) have been collaborating for the past three years to collect data on participants in 401(k) plans. This effort, known as the EBRI/ICI Participant-Directed Retirement Plan Data Collection Project, has obtained data for 401(k) plan participants from certain of EBRI and ICI members serving as plan record keepers and administrators.

Jan. February 2000 Feb. EBRI Issue Brief (ISSN 0887-137X) is published monthly at $300 per year or is included as part of a membership subscription by the Employee Benefit Research Institute, 2121 K Street, NW, Suite 600, Washington, DC 20037-1896. Periodicals postage EBRI Table 2, EBRI/ICI Database: 401(k) Plan Characteristics Mar. rate paid in Washington, DC. POSTMASTER: Send address changes to: Table 11 EBRI Issue Brief Chart 5 , 2121 K Street, NW, Suite 600, Table 6 Table 9 Table 4 Chart 3 by Plan Assets, 1998 ................................................................ 7 401(k) Plan Asset Allocation, Account Ch Ch art 19 Table 7 art 15 Table 1 Chart 7 ChCh art 12 art 16 Chart 9 Chart 1 Table 5 Table 3 EMPLOYEE Chart 11 Washington, DC 20037-1896. Copyright 2000 by Employee Benefit Research Institute. All rights reserved, No. xxx. Tenure Composition of Selected Account Balance Changes in Participants’ Investment in Equity Securities, Impact of Company Stock on Asset Allocation by Age, 1998 Average Asset Allocation Distribution for Participants With No Equity Fund Balances Average Asset Allocation by Age and Investment Options, 1998 Median Growth in Account B Impact of Age and Tenure on Account B alance 1996–1998, alance, 1998 Table of Percent AAsset Allocation Distribution of Participant Account Balances to vail Loan Ra age of Eligible P ability of Pl EBRI/ICI Database: 401(k) Plan Characteristics tios for P an Loans articip articip by Number of P ants W ants W Table 3, Average Asset Allocation by Age, 1998 ith Loans, ith Loans, articip by A by Account B ants, 1998 ge, 1998 alance, 1998 ........................ 9 Distribution of Account Balances, 1998 Jack VanDerhei, of Temple University, is research director of the EBRI Fellow’s program. Sarah Holden is 401(k) Pl Average Asset Allocation by Plan Size and Investment Options, 1998 Ratio of 1998 Account B an Characteristics Average Asset Allocation by Age, 1998 by Number of P alance to 1998 S articip alary for P ants: EBRI/ICI D articipants atabase Ratio of 1998 Account Balance to 1998 Salary for Particip Categories, 1998 ants in Their 20s, Apr. BENEFIT 1996–1998 by Number of Plan Participants, 1998 by Age and Tenure, 1998 by Age and Tenure Equity Funds by Age and Tenure, 1998 (percentage of plans offering loans) Table 4, Average Asset Allocation by Age and (percentage of p (percentage of p articip articip ants with account balances of less th ants with account balances in specified ranges) an $10,000) vs. Cerulli Estimates for All 401(k) Plans, 1998 by Age Group and S (percentage of account balances) alary Range senior economist in the research department at the Investment Company Institute (ICI). Carol Quick is 30% 28% by Tenure and Salary Range Guaranteed (percentage of participants) Guaranteed RESEARCH 25% Investment Options, 1998 ..................................................... 10 25% 25% 200% 2% 45% 100% 100% Guaranteed 200% 100% Equity Balanced 24% Bond 24% Money Investment Company Equity Balanced Bond Money Investment Company Contents 25% 45% Guaranteed Other Balances, and Loan Activity in 1998 100% research associate at the Employee Benefit Research Institute (EBRI). This report is being published Number of Plan Zero Total < 20% Total 20%–80% Total > 80% Average Account Total May 23% Table 5, Average Asset Allocation by Plan Size and 23% 23% Guaranteed Other INSTITUTE 5% 80% ® The Employee Benefit Research Institute (EBRI) was founded in 1978. Its mission is Plan Size By Number Equity Balanced Bond Money Investment 90%Company 18% Age Cohort Funds Funds Funds Funds Contracts22% Stock Investment Options Funds Funds Funds Funds Contracts Stock 40% Balanced Bond Percentage of Account Balance Invested in Equity Funds Money Investment Company Stable 88% 88% 180% Participants Plans Participants Assets Balance simultaneously as an Age Equity ho we ar Balanced EBRI Issue Brief Bond e and as an Money Investment ICI Perspective. Investment Options, 1998 Company Special thanks for their assistance with Stable Age ..................................................... 11 of Participants to contribute to, to encourage, and to enhance the development of sound employee benefit Funds Funds Funds Funds 13% Contracts Stock W Funds Funds Funds Contracts Stock Value Funds Other Unknown Tenure (years) Total Plan Assets—Cerulli 81% Plan Assets—EBRI/ICI (percentage of participants ) 80% 20% Cohort Funds Funds Funds Funds Contracts Stock Value Funds Other 20s Unknown Total Jun. 160% 35% Percentage in 1998 20% Table 6, Impact of Company Stock on Asset Allocation this paper go to Russell Galer, senior counsel at ICI; to Janet Thompson-Conley of ICI, who prepared the 80% programs and sound public policy through objective research and education. EBRI is the only private, nonprofit, 160% (percentage of account balances) (percentage of account balances) by Jack VanDerhei, Temple University; Sarah Holden, ICI; and 18%Age 80% 1–10 20% 6,344 42,670 $ 990,267,821 $23,208 80% 0–2 80% 72% Participants—Cerulli Participants—EBRI/ICI 30s (percentage of account balances) Text by Age, 1998 ........................................................................... 18% 12 140% 69% > 30 Years All Ages Combined 30%nonpartisan, Washington, DC-based organization committed exclusively to public policy research and education on 27% 16% (percentage of account balances) 20s figures; and Cindy O’Connor of EBRI, who prepared the tables and charts. 11–25 Total 28.3% 8,260 5.7% 139,233 37.4%2,847,264,244 28.5% 20,450 100.0% None 1%–33% 34%–66% 67%–99% 100% 20s 62.1% 8.2% 4.7% 4.5% 4.7% 13.6% 0.1% 1.3% 0.8% >2–5 100% 60% 64% All Plans 40s Plans With Employer-Directed and Participant-Directed Balances Plans—Cerulli 14% Table 7, Asset Allocation Distribution of Participant Account Plans—EBRI/ICI 14% Jul. Equity, bond, money, and balanced funds 66.4% 13.0% 9.8% 8.4% Age Cohort >20–30 Years economic security and employee benefit issues. EBRI’s membership includes a cross-section of pension funds, 26–50 5,243 188,250 4,406,105,858 23,406 15% 120% 30s 30s 58.1 25% 8.2 4.8 4.0 5.7 17.4 0.1 1.0 0.8 100 58% >5–10 1–100 66.4% 7.0% 60% 7.8% 6.1% 10.6% 0.4% Overview ...................................................................................... 3 50s 56% Equity, bond, money, and balanced funds, and GICs 58.2 10.0 Balances to Equity Funds by Age and Tenure, 1998 4.7 4.0 20.9% ........... 13 Carol Quick, EBRI 60% 20s 13.1% Percentage in 1996 8.6% 17.4% 15.3% 40.1% 0.6% 3.9% 1.1% 100.0% 51–100 Age Cohort 120% 3,772 268,474 11% 7,282,494,601 27,126 >10–20 Years businesses, trade associations, labor unions, health care providers and insurers, government organizations, and 40s 40s 52.6 52% 8.4 5.3 4.5 8.5 18.9 0.1 0.9 0.8 100 100% 60% 101–500 63.7 10.9 8.1 6.8 7.5 1.2 The authors wrote this article with assistance from the Institute’s research and editorial staffs. Any views Total Balances (Employer-Directed and Participant-Directed) 20% 9% Summary ...................................................................................... 30s Equity, bond, money, balanced funds, 11.1 None 8.1 13.217.7 316.2 2.4 47.6 1.3 0.3 0.8 2.5 0.5 60s 1.1 100.0 101–250 3,074 481,007 Table 8, Percentage of Participants With Equity 13,856,068,577 28,806 20s 26.8 3.3 35.9 34.0 100.0 Aug. 60% service firms. >5–10 Years 50s 46%48.0 10% 8.5 6.4 4.7 12.3 18.1 0.3 28% 0.7 1.0 100 50s 9% 501–1,000 58.7 11.3 8.1 6.4 8.9 5.1 10%80%20s 14% 36.1% 5.5% 0.7% 1.9% 6.8% 48.9% and company stock 40.7 5.8 11.5 6.7 32.7% 40s 10.0 1%–33% 8.3 11.9 0.5 20.710.2 45.4 4.1 0.4 1.1 2.0 0.6 1.3 100.0 Asset Allocation ....................................................................... 251–500 30s 24.3 1,356 3 5.0 474,999 38.6 15,121,584,036 32.1 31,835 100.0 expressed in this article are those of the authors and should not be ascribed to the officers, trustees, mem- Exposure but No Equity Fund Balances by Age and Tenure, 13% 20s 60s 39.8 15% 8.2 9.0 5.7 20.6 14.7 0.7 0.7 0.7 >2–5 Y 100 ears 1,001–5,000 53.2 11.4 5.8 6.0 11.2 10.4 60s The Employee Benefit Research Institute (EBRI) and the Investment Company Institute 40% 40% 30s 32.0 5.0 0.7 1.7 7.3 53.1 Equity, bond, money, balanced funds, 34%–66% 0.5 1.6 18.9 5.1 1.3 40% 50s 9.5 9.5 10.6 25.9 40.4 1.2 1.5 1.5 38% 100.0 60% 501–1,000 40s 27.2821 6.2 580,458 39.0 20,726,730,416 27.6 35,708 100.0 Account Balances ..................................................................... 4 1988 ........................................................................................ 13 All 49.8 8.4 6.1 4.7 11.4 17.7 0.3 0.8 0.8 0–2 Years 100 bers, or other sponsor of EBRI, EBRI-ERF, or their staffs. Neither EBRI nor EBRI-ERF lobbies or takes 80% 8% Sep. > 5,000 45.4 6.7 5.7 3.6 12.1 25.0 40s 26.8 5.4 1.2 3.3 7.8 55.2 GICs, and company stock 10% 44.4 7.1 2.1 2.3 18.7 24.3 60s 40% 8.4 (ICI) have been collaborating for the past three years to collect data on participants in 67%–99% 12.7 10.4 0.4 37.8 0.5 26.6 1.7 1.715.7 1.3 1.4 1.1 100.0 1,001–2,500 50s 30.8682 1,062,235 7.2 30s 37.3 43,261,242,177 24.8 40,727 100.0 6% 40s EBRI’s work advances knowledge and understanding of employee benefits and their is $13,513, compared with $185,474 for participants in Plan Loans • Specifically, 49.8 percent of total plan balances are The ratio of account balance to 1998 salary varies National Bureau of Economic Research, August 1999. ............................................................................... 5% 5 Table 9, Average Asset Allocation for Participants have exposure to equity securities through balanced 40% present in 1996, 1997, and 1998, in part reflecting is equity in the plan’s sponsor (the employer). Money All Sour 49.8 ce and 8.4 6.1 4.7 11.4 17.7 positions on specific policy proposals. EBRI invites comment on this research. 50s 25.2 6.1 4% 1.7 4.2 10.4 52.1 All 40% hat we do 9.5 100% 9.8 11.4 0.2 26.4 0.3 38.9 0.3 1.0 1.0 50s 1.712.1 1.3 100.0 2,501–5,000 60s 43.1276 7.5 970,332 3% 30.9 3%42,518,558,692 18.6 43,819 100.0 5%W 401(k) plans. This effort, known as the EBRI/ICI Participant-Directed Retirement Plan Participants’ Accounts, 1996–1998 Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. ......................................... importance to the nation’s economy among policymakers, the news media and the public. nd 5 2% With No Equity Fund Balances by Age and Tenure, 1998 2% 2% .. 14 0% their 60s with at least 30 years of tenure. The increase in Profit Sharing/401(k) Council of America. invested in equity funds, 17.7 percent in company EB with age and tenure. Older participants, who have RI 42 Annual funds or company stock. As a result, overall equity- 20%60s 23.6 6.7 3.1funds 20%strong stock market performance. For a given age consist of those funds designed to maintain a 7.5 17.4 41.6 Plans With No Company Stock or Guaranteed Investment Contracts Oct. 20% 5,001–10,000 155 1,069,482 47,945,432,588 44,831 34% Type of 13% Sum of Diagonal: 74.6 The EBRI/ICI Database .............................................................. It does this by conducting and publishing policy research, analysis, and special reports on employee benefits issues; Data Collection Project, has obtained data for 401(k) plan participants from certain of 20s 30s 40s 6 50s 60s All Ages Plans With No Company Stock or Guaranteed Investment Contracts All0% 26.7 5.7 1.6Table 10, Average Asset Allocation by Salary, 1998 3.9 10.0 60s 51.9 ............... 14 Age 40% The EBRI/ICI Tenure 0% Survey of Profit Sharing and 401(k) Plans. >10,000 Tenure Chicago: 119 2,632,890 172,844,680,237 65,648 account balance as tenure increases is largest for partici- stock, 11.4 percent in guaranteed investment con- had more time to accumulate balances, have higher 20%0% stable share price. related investments of those holding no equity funds group, median account growth (measured in percent- Guaranteed investment contracts 20% 3% 1% < 1–100 $10,000 >$20,00069.6 >$30,000 Particip >$40,000 9.9 ant Age (y >$50,000 ears) 10.3 >$60,000 >$70,000 9.2 >$80,000 >$90,000 > Source and Type of Data holding educational briefings for EBRI members, congressional and federal agency staff, and the news media; and ......................................................... 6 EMPLOYEE 20s < $10,000 EBRI and ICI members serving as plan record keepers and administrators. >$20,000 >$30,000 >$40,000 74.3 >$50,000 10.0 >$60,000 7.6 >$70,000 >$80,000 6.0 >$90,000 >$100,000 All Account 0–2 years 15.5 11.5 21.1 17.0 Table 11, Evolution of Participants’ Investment in 28.5 0.4 4.8 1.4 100.0 >$20,000 All 0–2 years >$30,000 >$40,000 Data 22.6 >$50,000 30,102 >$60,000 7,910,030 2.7 >$70,000 39.1 >$80,000 371,800,429,248 >$90,000 a 35.6 > 47,004 100.0 Nov. $10,000 Profit Sharing/401(k) Council of America, 1999. Percentage of Account Balance Invested in Equity Funds, Balanced Funds, –$20,000 –$30,000 –$40,000 –$50,000 –$60,000 –$70,000 –$80,000 and Company Stock –$90,000 –$100,000 $100,000 pants in their 50s and 60s. tracts (GICs), 8.4 percent in balanced funds, 6.1 per- ratios than younger participants. Similarly, within a (GICs) are insurance company products that guarantee a are 44.6 percent of plan balances. age terms) tends to fall as tenure increases, primarily 101–500 68.5 12.3 10.0 8.2 0% Participant-Directed Balances Only $10,000 sponsoring public opinion surveys on employee benefit issues. –$20,000 –$30,000 –$40,000 –$50,000 –$60,000 –$70,000 –$80,000EBRI’s Education and Research Fund –$90,000 –$100,000 Balances (EBRI-ERF) Distribution of Plans, Participants, and Assets 30s 20% 73.3 11.5 0% 7.6 5.9 >2–5 years 15.7 9.4 19.2 19.6 30.4 0.4 4.4 1.1 100.0 >2–5 years 26.0 3.7 38.1 32.2 100.0 –$30,000 Source: –$40,000 Tabulations from EBRI/ICI P –$50,000 –$60,000articip –$70,000 ant-Directed Retirement Plan Data Collection Project. –$80,000 –$90,000 –$100,000 $100,000 Equity Securities, 1996–1998 ......................................23 1–10 501–1,000 11–25 26–50 51– 101– 67.4 251– 11.8 501– 11.2 1,001– < $10,000 2,501– 8.2 5,001– > $100,000 > 10,000 All Plans Samwick, Andrew A., and Jonathan Skinner. “How Will cent in bond funds, 4.7 percent in money funds, and B given age group, participants with more years of ENEFIT The distribution of account balances underscores 20s 49.4 7.5 0.9• Asset allocation varies with participant salary. In 2.5 9.3 30.3 40s performs the charitable, educational, and scientific functions of the Institute. EBRI-ERF is a tax-exempt organization 69.0 12.7 specific rate of return on the invested capital over the life because initial account balance rises with tenure. 8.9 7.2 Database by Plan Size >5–10 years .......................................................................... 11.1 The report includes 1998 information on 7.9 million active participants in 30,102 plans 8.9 15.2 620.1 Percentage in 1998 40.9 0.3 2.6 1.1 100.0 Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. >5–10 years 27.5 6.0 38.9 27.6 100.0 0% As 401(k) 4.7 percent of their assets in GICs, while those in their Plan adminis- to displace equity and balanced fund holdings, while This analysis of 100 250 500 1,000 5,000 5,000 10,000 1,001–5,000 65.0 15.1 8.9 9.0 Dec. Source: Tabulations from EBRI/ICI P 0% articipant-Directed Retirement Plan Data Collection Project. Source: 30s Tabulations from EBRI/ICI P 46.9articipant-Directed Retirement Plan Data Collection Project. 7.3 1.0 2.4 10.7 31.5 >10–20 years 50s 10.3 9.0 12.8 63.4 23.5 14.0 40.9 10.5 0.5 9.0 2.0 1.2 100.0 (table 1, table 2) supported by contributions and grants. Defined Contribution Pension Plans Affect Retirement Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. >10–20 years 31.1 7.6 38.5 22.8 100.0 the effects of age and tenure on account balances. 0.3 percent in other stable value funds. tenure have higher ratios than those with less tenure. holding nearly $372 billion in assets. The data include demographic information, annual >2–5 >5–10 >10–20 of the contract. particular, the percentage of account balance invested Within any given tenure range, younger participants >20–30 Other stable value funds >30 include syn- 0% Source: Tabulations from EBRI/ICI Participant-Directed Retirement RESEARCH > 5,000 0–2 retirement >2–5 63.5None >5–10 12.4 1%–33% >10–20 9.9 34%–66% >20–30 7.3 67%–99% > 30 100% 40s 40.1 trators that are 7.9 Participants 1.8 4.8 11.8 33.2 60s invest 20.6 percent. Bond funds, which represent 60s 52.7 15.1 GICs appear to displace other fixed-income invest- 15.4 13.8 the 1998 data >20–30 years 8.3 9.1 9.9 29.0 Char 39.4ts 1.1 1.6 1.6 100.0 >20–30 years 35.2 8.4 35.6 20.8 100.0 Relationship of Database Plans to the Universe Plan Data Collection Project. 6 >$20,000 >$30,000 >$40,000 >$50,000 >$60,000 >$70,000 >$80,000 >$90,000 >$100,000 Income?” NBER Working Paper no. 6645. Cambridge, contributions, plan balances, asset allocation, and loans, and are broadly representative • Ninety-one percent of participants in their 20s with two The asset allocation of participants’ account balances 0% All 66.4 13.0 Tenure (y thetic GICs ears) in equity funds rises with salary, while the percentage 9.8 experience a higher percentage median account or similar instruments. The 8.4 “other fund” 50s 36.0 8.5 Tenure (y 2.5 ears) 16 6.1 14.2 32.3 > 30 years 6.3 13.3 plans have 7.8 35.7 32.1 2.3 1.0 1.6 100.0 2000 4.7 percent of the assets of participants in their 20s, –$30,000 > 30 years –$40,000 –$50,000 either EBRI or 42.8 –$60,000 8.4 –$70,000 ments. 30.7 –$80,000 These effects tend to occur across all ages of –$90,000 18.1 –$100,000 100.0 updates the of Plans ................................................................................. 7 INSTITUTE Percentage in 1996 ® <100 100–500 501–1,000 1,001–5,000 >5,000 Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. 60s 30.1 8.4 4.0 9.7 21.4 26.1 or fewer years of tenure have account balances of less varies with age. Younger participants’ assets tend to MA: National Bureau of Economic Research, July Plans With Guaranteed Investment Contracts of the universe of 401(k) plans. The database also includes three years of longitudinal Chart 17 invested in GICs declines as salary rises. All 9.5 9.8 11.4 26.4 category is the residual for other investments such as 38.9 growth than older participants, in part because of 1.0 1.7 1.3 100.0 EBRI Issue Briefs are monthly periodicals providing expert evaluations of Plan Loans Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. Chart 1, 401(k) Plan Characteristics by Number of 22 Participants Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Particip grown to be a ants Participants Participants Participants ICI members provided records on active participants in rates. Information in the EBRI/ICI database can be used amount to 9.0 percent of the assets of participants in (chart 1) None 11.1 1.5 account balance. participants. 0.7 0.6 The participant’s tenure with the 0.4 analysis of the Plans With Guaranteed Investment Contracts All 38.3 8.1 2.3 5.5 14.0 31.5 Age ur publications Loan Ratios for Participants With Loans, by Tenure, 1998 Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. 1998. information on approximately 3.3 million participants. Key findings include: employee benefit issues and trends, as well as critical analyses of employee than $10,000 (chart 7). In contrast, only 55 percent of be more concentrated in equity fund investments, O real estate funds. The final category consists of funds Participants: EBRI/ICI Database vs. Cerulli their higher exposure to equity securities. Collection Project. 1%–33% 0.2 6.5 3.0 0.9 0.3 Asset Allocation ........................................................................... 1–100 65.4 8 5.5 6.5 Summar 4.3 16.3 y in their 20s and 30s (chart 9). The tendency of the ratio Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. significant part The ratio of account balance to salary is posi- 401(k) plans administered by these organizations in employer serves as a proxy for length of participation in to examine the relationship between account balances their 60s. Company stock accounts for 13.6 percent of the Over Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. 20s view 70.7 8.4 3.6 3.5 11.3 1996 data and in terms of their distribution across age, tenure, account benefit policies and proposals. Each issue, ranging in length from 16–28 pages, thoroughly explores one topic. Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. Note: Change in account balance over the two years including contributions, loan activity, 7 EBRI A • verage Loan Balances Fifty-six percent of the plans, accounting for 80 per- 34%–66% 0.3 0.8 Estimates for All 401(k) Plans, 1998 15.0 5.6 0.7 ...................................... 8 U.S. Department of Labor. Pension and Welfare Benefit (chart 2, table 3) participants in their 20s with five to 10 years of tenure while older participants invest more heavily in fixed- 101–500 58.8 8.7 that could not be identified. greater than $100,000 (chart 8). For example, less than 5.3 4.4 19.6 Plans With Company Stock Investment Option But No Employer-Directed Contributions Table 2 30s 25% 68.7 8.8 Account Balances 3.9 23 3.1 13.2 withdrawals, and investment returns. 24% of the private of account balances to salary to peak at higher earnings 1996, 1997, and 1998. These administrators include and age, tenure, and salary of participants. plan balances of participants in their 20s, rises to • For all 401(k) participants in the 1998 EBRI/ICI database, almost three-quarters of tively correlated with age and tenure. Participants in the 401(k) plan. The 1998 EBRI/ICI database shows reports on Notes is a monthly periodical providing current information on a variety of employee benefit topics. 22% balance, and plan size, and thus they provide an oppor- EBRI’s Washington 67%–99% 0.5 0.7Chart 2, Average Asset Allocation for All Plan Asset Allocation by Plan Size and 2.0 30.5 2.7 501–1,000 55.5 12.3 5.5 4.0 20.8 Asset Allocation by Age and Investment Options cent of the participants, offer loans to plan Total Balances EBRI/ICI Database: 401(k) Plan Characteristics by Plan Assets, 1998 .................. 8 have account balances of less than $10,000. Older income assets. Administration. 40s Private Pension Plan Bulletin, 62.5 9.7 4.4 3.8 17.4 10 percent of participants in their 60s with 10 or fewer The remainder of this paper is organized as Chart 13 and then fall off a bit likely reflects the influence of two 100% pension land- 0.2 0.3their 60s, having had more time to accumulate assets, 0.4 1.8 13.3 mutual fund companies, insurance companies, consulting For those participants with outstanding loans at the end 18.9 percent for participants in their 40s, and tapers off Bulletin provides sponsors with short, timely updates on major federal developments in employee benefits. plan balances are invested directly or indirectly in equity securities. Specifically, that 62 percent of those participants with account 401(k) partici- EBRI’s 1,001–5,000 54.7 11.3 Balances, 1998 4.9 3.8 ......................................................................... 22.7 8 20s 51.5 10.5 2.2 tunity to examine the developments in their 401(k) 6.5 5.3 19.1 50s 19% 55.6 10.5 5.1 4.0 22.7 (table 4) participants. The probability of a plan sponsor offering • The average account balance (net of plan loans) for all Investment Options Abstract of 1995, Form 5500 Annual Reports. Wash- • workers display a similar pattern. For example, 73 per- Investment options offered by 401(k) plan sponsors 20% years of tenure have account balances in excess of follows. The next section provides a detailed description Percentage of Eligible Participants With Loans, by Age, 1998 Chart 8 Distribution of Plans, Participants, and > 5,000 Fundamentals of Employee Benefit Programs 59.2 10.9 offers a straightforward, basic explanation of employee benefit programs 3.0 3.9 22.0 competing forces. First, past empirical research suggests scape in the United States, interest in examining the 30s 49.8 percent of total plan balances are invested in equity funds, 17.7 percent in 49.4 10.1 2.5have higher ratios across all salary ranges, while those Chart 3, Distribution of Account Balances, 1998 5.3 6.4 23.2 .................... 15 firms, and investment management companies. The 60s Total 41.9 Total 10.0 Total balances of less than $10,000 have five or fewer years of 5.8 Total 4.9 35.8 Average Asset Allocation by Plan Size and Investment Options of 1998, the average unpaid balance was $6,717. Loan to 14.7 percent for those in their 60s. Sum of Diagonal: 76.4 ........ 9 pant asset allocation, participant account balances, and accounts over the two-year time period. Relationship of Age and Tenure to On average, funds, while older participants are more disposed to participants with more tenure have higher ratios than plan loans to its employees increases with plan size. participants was $47,004 at year-end 1998, which is ington DC: U.S. Government Printing Office, 1999. All Impact of Age and 58.2 Tenure on Account B 10.0 Characteristics of Par 4.7 alance, 1998 4.0 20.9 ticipants With cent of all participants in their 60s with two or fewer influence participants’ asset allocation. Plans offering $100,000. However, about 37 percent of participants in of the 1998 EBRI/ICI 401(k) database and compares the 40s in the private and public sectors. 44.7 10.4The EBRI Databook on Employee Benefits 3.1 5.6 is a statistical reference volume on employee 8.9 24.4 Plan Assets Plans Participants Chart 4, Age Composition of Selected Account Assets Account Balance (table 5) behavior of 401(k) plan participants also has grown. To company stock, 11.4 percent in guaranteed investment contracts (GICs), 8.4 percent in that higher earners tend to contribute higher percent- universe of plan administrators varies from year to year, balances as a percentage of account balances for partici- either company stock or balanced funds (table 8). As a The mix of investment options offered by a plan in their 20s have the lowest ratios (chart 9). Similarly, tenure, while 83 percent of those participants with Assets by Plan Size loan activity. The results for year-end 1998 are broadly 20% 14% Examining whether participants’ behavior varies with 14% among all participants present in 1996, 1997, and 1998, 60 percent, compared with 37 percent for those in their participants in 18% Table 10 20% invest in GICs and bond funds. On average, participants 50s 40.0 11.4 3.9 6.5 12.5 23.3 Account Balances those with fewer years of tenure. For participants in Indeed, about 90 percent of plans with more than Plans With Company Stock benefit programs and work force related issues. 26 percent higher than the average account balance at Table 8 years of tenure have account balances of less than ________. the basic investment options of equity, balanced, bond, Private Pension Plan Bulletin, Abstract of 15% Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project (percentage of participants with account balances more than $100,000) their 60s with 21–30 years of tenure with their current Balance Categories, 1998 1998 data with the estimated universe of 401(k) plans. ...................................................... 15 26 Asset Allocation of Employee and Employer balanced funds, 6.1 percent in bond funds, 4.7 percent in money funds, and 0.3 percent Outstanding Loans ages of salary, enhance the understanding of 401(k) plan participants’ result, participants with no equity funds still have and thus one would expect the ratio of and thus these aggregate figures should not be used to pants with loans was 14 percent (chart 16). However, sponsor significantly affects asset allocation. Table 4 Asset Plans With Company Stock 16% similar to those for year-end 1996. In addition, this account balances greater than $100,000 have more than 16% a in part reflecting strong stock market performance. 60s 30.8 Average Asset Allocation by Salary, 1998 11.5 4.6 plan size (measured by the number of plan participants) 9.1 20.1 21.6 Age $0–$250,000 Because approximately 60 percent of aggregate balanced fund assets are invested in equities, 12,016 60s (chart 19). 191,603 $ 1,232,688,023 $ 6,434 11%Percentage of Participants With Equity their 60s with $50,001–$60,000 in annual salary, the 10,000 participants offer a loan provision, while less the 1998 EBRI/ in their 20s have 62.1 percent of their account balances Chart 5, Tenure Composition of Selected Account Changes in Asset Allocation, 1996 year-end 1996. The median account balance was –1998 1996, Form 5500 Annual Reports. Washington DC: $10,000, compared with 20 percent of those in their 60s and money funds tend to have the highest allocations Contributions ..................................................................... 10 employer have account balances greater than $100,000. The following three sections present findings from the 18 1–100 23.3 4.8 The 1998 database contains 30,102 401(k) plans with 6.8 18.4 46.4 All in other stable value funds. 42.2 10.8 3.4 6.4 11.1 23.4 account balance to salary to rise with salary. However, investment decisions, account balances, and loan activ- 44.6 percent 20s of account balances in equity-related >$250,000–$625,000 47.4 5,409 6.0 26182,412 5.9 2,190,383,704 6.4 12,00832.5 estimate time trends. However, future research will 60% 60 percent of participants’ balanced fund assets are counted here as equity investments. 10 years of tenure (chart 5). there is variation around this average with age, tenure, presents four combinations of investment offerings, 15% See Kusko, Poterba, and Wilcox (1998) and Yakoboski and VanDerhei analysis presents data regarding asset allocation by plan However, there is variation in growth in account balance Age and account balance should generally be positively reveals whether small plans provide access to a variety Exposure but No Equity Fund Balances Balance Categories, 1998 ...................................................... 16 24 ICI database invested in equity funds, in contrast to 39.8 percent for ratio of account balance to salary rises from 29 percent than half of plans with 10 or fewer participants do so. 10% $13,038 at year-end 1998. The reported account 8% (table 6) with more than 20 years of tenure. to equity funds. The addition of GICs to the four basic U.S. Government Printing Office, forthcoming. 101–500 49.8 11.1 Most participants in 401(k) plans have borrowing 7.7 10.6 17.8 The percentage increases to 48 percent for those in their 1998 EBRI/ICI database. The first of these sections Guaranteed 30s >$625,000–$1,250,000 47.4 3,6821 Contact EBRI Publications, (202) 659-0670; fax publication orders to 6.1198,828 6.8 3,260,917,926 6.0 16,40132.2 $372 billion of assets and 7,910,030 participants (table (1996). ity, the Employee Benefit Research Institute (EBRI) constraining these individuals’ greater propensity to focus in more detail on participants and plans common to and account balance. starting with a base group consisting of plans that offer investments (table 9). Despite the sharp rise in equity prices between 1996 and Examining the interaction of both age and by Age and Tenure, 1998 Chart 6, Average Account Balance by Age and Tenure, size and examines the changes in the accounts of certain related. Younger workers who are relatively early in of investment options similar to that provided by larger by age and tenure. Allocation 501–1,000 ubscriptions/orders 47.7 9.5 7.8 9.2 25.0 Cerulli Associ- Distribution of Equity Fund Allocations and • Participant asset allocation varies considerably with age. Younger participants tend to have 49.8 per- those in their 60s. Participants in their 20s invest Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. S Age Equity Balanced Bond Money Investment Company • for those with two or fewer years of tenure to 224 percent Among participants eligible for loans, 16 percent had 40s >$1,250,000–$2,500,000 44.0 2,790 6.2254,042 balance represents retirement assets in the 401(k) 8.7 4,883,644,111 6.8 19,22432.6 U.S. General Accounting Office. “401(k) Pension Plans: investment options reduces the relative allocations to For a given age group, longer tenure means a (202) 775-6312. Subscriptions to privileges. In the 1998 EBRI/ICI database, 80 percent of EBRI Issue Briefs are included as part of 60s with more than 30 years of tenure. examines asset allocation across 401(k) participants and 9% 2 9% 50% 27 1). Most of the plans in the database are small, whether save are tax code contribution limits and nondiscrimina- and the Investment Company Institute (ICI) have Specifically, contributions of high-income participants are constrained by 1998 ........................................................................................ 16 all three years to study their evolution over time. equity, balanced, bond, and money funds as investment Loan ratios tend to decrease as age increases, 1,001–5,000 10% 49.7 9.2 participants who were included in the 1996, 1997, and 1998, the percentage of assets allocated to equity funds tenure with account balances reveals that for a given age 6.4 8.8 24.0 Note: Minor investment in other stable value funds and “other” are not shown; therefore, row percentages will not add to 20s their careers are likely to have lower incomes. They also Participant Exposure to Equities For a given age group, growth in account balance 50s Salary ...................................... Funds 38.4 Funds 12 5.7 Funds plans. In aggregate, the asset allocation of account 12.5 Funds Contracts 6.8 Stock 33.7 ates, Inc. 5% favor equity funds, while older participants are more disposed to invest in GICs and for those with more than 20 years of tenure (chart 10). outstanding loans at the end of 1998. Loan activity EBRI membership, or as part of a $199 annual subscription to cent of their plan at the participant’s current employer. Retirement EBRI Notes and EBRI Issue Briefs. Individual copies are Loan Provisions Enhance Participation But May participants are in plans offering loans. However, only higher percentage of people with account balances all other investment options, particularly bond funds election deferral limits in Internal Revenue Code Sec. 402(g), and by Actual among plans by plan size, and also considers the influ- > 5,000 37.9 4.7 13.1 6.0 Percentage With Company 35.5 12 Chart 7, Impact of Age and Tenure on Account measured by the number of plan participants or by total share of all the participants who remain within the same 100 percent. Employer-directed balances are invested in the plan sponsor’s company stock. participants maintained the 1996 share of their account tion rules, which aim to assure that employees of all collaborated during the past three years in the collection (table 7, table 8, table 9) 60s >$2,500,000–$6,250,000 30s 31.0 2,560 5.1442,385 20.7 10,042,189,520 7.1 22,70031.7 Records were encrypted to conceal the identity of em- did not change significantly for the vast majority of group, average account balances increase with tenure dropping steadily from 28 percent for participants in options but do not offer company stock or GICs. 1998 studies. tends to fall as tenure increases (chart 19). The initial have had less time to accumulate a balance with their Asset Allocation by Salary balances varies with plan size (table 5, top panel). For available with prepayment for $25 each (for printed copies) or for $7.50 (as an e-mailed electronic file) by calling bond funds. On average, participants in their 20s have 62.1 percent of their account “Market account balance Deferral Percentage and Actual Contribution Percentage (ADP/ACP) As a result, those longer-tenure participants are able to © 2000. varies with age, tenure, and account balance. Partici- savings held in plans at previous employers or rolled All 40.7 5.8 11.5 6.7 Stock and/or Balanced Funds 32.7 and money funds. Alternatively, the addition of Affect Income Security for Some.” (Letter Report, 10/ 40% 31 Balance, 1998 16 percent of those eligible for loans had loans outstand- ......................................................................... 17 >$6,250,000–$12,500,000 1,274 (percentage of account balances) 435,739 ence of investment options offered by plan sponsors. 11,207,589,519 25,721 27 Asset Allocation by Salary group in 1996 and 1998. .................................................... The figures above the diago- 40s 13 plan assets. Indeed, almost 50 percent of the plans have Relationship Between Account Balances Chart 2 balances in equity funds in 1998. The other 25.4 percent of data on participants in 401(k) plans. In this collabora- 5% income ranges attain the benefits of the 401(k) plan. ployers and employees, but were coded so that both could their 20s to 9 percent for those in their 60s (chart 16). Participants in plans having these four basic investment EBRI or from www.ebri.org. Change of Address: nondiscrimination rules in IRC Secs. 401(k) and 401(m). EBRI, 2121 K Street, NW, Suite 600, Washington, DC 20037, (202) participants. (chart 6). For example, the average account balance of To examine changes in asset allocation, current employer and are less likely to have rollovers 0% example, the percentage of plan assets invested in equity account balance of younger participants and those with balances invested in equity funds, in contrast to 39.8 percent for those in their 60s. Update: The invested in equity funds, 17.7 percent invested in Employee Plans With Company Stock and Guaranteed Investment Contracts >$12,500,000–$25,000,000 847 Chart 8, Impact of Age and Tenure on Account 529,531 14,705,824,867 27,771 provide for a higher percentage of their income in pants between age 30 and 59 are more likely to over into individual retirement accounts (IRAs) are company stock to these options substantially reduces 01/97, GAO-HEHS-98-5), 1997. ing at the end of 1998 (chart 13). 24 (table 10) 50s Participant asset allocations are presented by age and Average Asset Allocation for All Plan $20,000–$40,000 49.8% 9.6% 5.0% 3.5% 16.8% 11.0% Two possible explanations for the low account balances among this group Salary information is available for a subset of partici- nal represent participants who moved to a higher 0–2 >2–5 >5–10 >10–2025 or fewer participants, and another 30 percent fall >20–30 >30 All Tenures 775-9132; fax number, (202) 775-6312; e-mail: Publications Subscriptions@ebri.org. of the participants experienced a change in groups Membership Information: Inquir- tive effort, known as the EBRI/ICI Participant-Directed Plans With Company Stock and Guaranteed Investment Contracts Bibliography Age Cohort be tracked over multiple years. Similarly, loan ratios tend to decrease as tenure in- options have 66.4 percent of their assets invested in participants in their 60s with up to two years of tenure participants are placed into five groups based on the and Earnings few years of tenure is typically small and contributions from a previous job’s pension in the current plan. Age >$25,000,000–$62,500,000 Participants in their 20s invest 4.7 percent of their assets in GICs, while those in their 735 905,758 funds falls as plan size rises, decreasing from 66.4 per- 29,236,893,865 32,279 Benefit Balance, 1998 Asset Allocation ......................................................................... 401(k) Indus- 17 30% company stock, 11.4 percent in GICs, 8.4 percent in retirement with the 401(k) plan benefits from the borrow than older or younger workers. Similarly, not included in this analysis. Account Balances are: (1) It may be that their employer’s 401(k) plan has only recently been equity funds and balanced funds. As a result, partici- ....................................................................... >$40,000–$60,000 60s 52.7 8.6 13 5.4 4.5 B 13.6 alances, 1998 12.6 VanDerhei, Jack, Russell Galer, Carol Quick, and John Tenure (years) Loan activity varies with age, tenure, and the allocation to equity funds and balanced funds. investment option, and the effect of employer-directed 1–100 ies regarding EBRI membership, and/or contributions to EBRI-ERF should be directed to EBRI President Dallas 43.4 10.1 Distribution of Equity Fund Allocations 4.1 3.6 20s 12.7 19.7 57.4% within the range of 26–100 participants (table 1). In pants in the 1998 EBRI/ICI database. For these allocation to equity funds in 1998, whereas figures below 20s 0% 53.1 7.7 between 1996 and 1998. More than twice as many 1.7 2.1 7.9 25.2 Retirement Plan Data Collection Project, EBRI and ICI Data provided for each participant include percentage of their account balance invested in equity creases, falling from 24 percent for participants with two equity funds, 13.0 percent in balanced funds, 9.8 percent Chart 9, Ratio of 1998 Account Balance to 1998 Salary for are generally large relative to the account balance. As a established (indeed, 49 percent of all 401(k)-type plans in existence in 1995 Research For participants in the 1998 EBRI/ICI database, >$60,000–$80,000 60s invest 20.6 percent. Bond funds, which represent 4.7 percent of the assets of 53.6 8.2 6.9cent for plans with 100 or fewer participants to 45.4 per- 6.4 9.8 13.7 (chart 3) try.” The balanced funds, 6.1 percent in bond funds, 4.7 percent in Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. current employer. Similarly, of participants in their 20s, individuals with short or long periods of tenure are 101–500 46.8 9.5 • Almost one-half of participants have account balances 2.3 2.8 30s 22.6 12.9 65.7 • pants in plans with employer-directed contributions have Asset allocation does not vary significantly across plan Rea. “401(k) Plan Asset Allocation, Account Balances, Salisbury at the above address, (202) 659-0670; e-mail: salisbury@ebri.org 20s 30s 40s 50saccount balance. Of those participants in plans offering 60s All Ages 30s >$62,500,000–$125,000,000 49.5 339 7.2804,765 contributions on investment patterns is examined. The 1.7 30,433,154,974 1.8 9.7 37,81628.5 participants, asset allocation differs somewhat with the diagonal represent participants who lowered their 13 This section examines how the ratio of 1998 account contrast, only 4 percent of the plans have more than were established after 1989 (U.S. Department of Labor (1999), table B.10)), or participants experiencing a change in equity allocation • For all 401(k) participants in the 1998 EBRI/ICI Company Stock have collected data from some of their members that >$80,000–$100,000 54.6 8.4 and Par 7.1 Participants by Age Group and Salary Range ticipant Exposur 6.1 9.9 12.3e to Equities ..................... 18 participant date of birth, from which an age cohort is or fewer years of tenure to 8 percent for those with more in bond funds, and 8.4 percent in money funds. 20% Adding funds in 1996. The five groups corresponding to the Relationship of Age and Tenure to Account Balances Institute- participants in their 20s, amount to 9.0 percent of the assets of participants in their 60s. ......... 15 Chart 10 there is a positive correlation between age and account 501–1,000 42.9 8.2 cent for plans with more than 5,000 participants. Be- 2.2 2.8 40s 21.8 19.7 70.7 result, the median growth rate is as high as 173 percent money funds, and 0.3 percent in other stable value funds 40s >$125,000,000–$250,000,000 45.4 216 7.2869,237 2.0 36,847,790,558 2.1 13.7 42,39128.2 Cerulli Report. 74.7 percent of their participant-directed balances those with longer tenure tend to have higher account less likely than other participants to have a loan of less than $10,000 in the 401(k) plan at the 18% (2) The employee may have only recently joined the plan. In either event, job size for plans offering the basic investment options of and Loan Activity.” 19 EBRI Issue Brief no. 205 and ICI loans, the highest percentages of participants with distribution of equity fund allocations by participant >$100,000 59.6 8.0 Chart 10, Ratio of 1998 Account Balance to 1998 Salary for 7.4 5.2 9.0 7.8 salary. allocation to equity funds in 1998. For example, 18.9 per- For example, the percentage of account bal- balance to 1998 salary varies across different income 1,000 participants. Similarly, about 40 percent of the Chart 4 Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. ended up with a higher equity allocation than ended up (chart 4, chart 5, chart 6, chart 7, chart 8) serve as plan record keepers and administrators. The 21 Ra 1,001–5,000 tio of 1998 Account Ba 42.3 lance to 1998 S 9.7 alary for P 3.0 database, almost three-quarters of plan balances are articip 2.9 50s ants in 19.8 Their 60s, 20.4 72.5 assigned; participant date of hire, from which a tenure than 30 years of tenure (chart 17). In addition, loan GICs to the base group lowers the allocation in all four Education percentages invested in equity funds are: 0 percent, 50s 10>$250,000,000 44.9 234 7.3 3,095,730 2.3 227,759,352,181 2.3 19.3 73,57222.9 for participants in their 20s with two to five years of balance. Examination of the age composition of cause few small plans offer company stock as an tenure would not accurately reflect actual 401(k) plan participation. Boston: Cerulli Associates, September 1999. (chart 2, table 3). balances relative to salary (chart 11). outstanding. Finally, participants with account Only 0.8 percent of account balances participant’s current employer, while 13 percent have invested in equity securities (defined as company stock, Perspective, Vol. 5, no. 1. Washington DC: Employee Participants in their 60s, by Tenure and Salary Range outstanding loan balances are among participants in ...... 18 equity, balanced, bond, and money funds. When GICs, > 5,000• Investment options offered by 401(k) plans appear to influence asset allocation. For 45.1 6.7 Among individual participants, the allocation of account tenure and age also is examined, with special attention 1.8 2.1 60s 18.3 25.2 63.1 Editorial Board: Dallas L. Salisbury, publisher; Steve Blakely, managing editor; Cindy O’Connor, production and distribution. Any Age Composition of Selected Account Relationship Between Account Balances and Earnings 10% by .......... Tenure and S 16 plans have assets of $250,000 or less, and another alary Range ances invested in equity funds rises from 49.8 percent for cent of all participants in 1996 remained within the 60s All 30,102 39.5 6.9 7,910,030 with a lower equity allocation. Indeed, the sum of the invested directly or indirectly in equity securities. 2.3 371,800,429,248 2.9 31.6 47,00416.0 and Research data include demographic information, annual contribu- range is assigned; outstanding loan balance; funds in 1 percent to 33 percent, 34 percent to 66 percent, 67 per- ratios decrease as account balance increases. Indeed, the investment options, with the greatest reduction in tenure. Growth in the account balances of participants in account balances finds that 57 percent of those partici- Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. investment option, in aggregate, company stock repre- Even, William E., and David A. Macpherson. The Impact is invested in other investments, and 0.8 percent is in balances of less than $10,000 tend to borrow less All views expressed in this publication and those of the authors should not be ascribed to the officers, trustees, members, or othe 44.4 7.1 Chart 11, Ratio of 1998 Account Balance to 1998 Salary for balances greater than $100,000. Those individuals 2.1 2.3 All 18.7 24.3 67.1 r (chart 9, chart 10, chart 11) equity funds, and the equity portion of balanced funds). company stock, or both, are added to the basic options, Benefit Research Institute and Investment Company their 30s, 40s, or 50s (chart 13). In addition, utilization of Balance Categories, 1998 example, the addition of company stock substantially reduces the allocation to equity balance to equity funds varies widely around the average given to those participants holding no equity funds. In 400% participants earning between $20,000 and $40,000 per 34 percent to 66 percent range in 1998. In addition, Chart 18 30 percent have plan assets between $250,001 and Fund. Note: Minor investment options are not shown; therefore, row percentages will not add to 100 percent. elements above the diagonal indicates that 18.6 percent tions, plan balances, asset allocation, and loan balances. participants’ investment portfolios; and asset values loan ratio for participants with account balances of less relative percentage of account balance occurring in bond cent to 99 percent, and 100 percent. The participants Guaranteed pants with account balances of less than $10,000 are in sponsors of the Employee Benefit Research Institute, the EBRI Education and Research Fund, or their staffs. Nothing herein is sents a negligible percentage of small plans’ assets and ato their 60s with two to five years of tenure is 121 percent. Participants in their 20s, by Tenure and Salary Range of Rising 401(k) Pension Coverage on Future Pension ...... 19 unidentified investments. Summing the asset shares of Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. Plan Loans ................................................................................. 19 Similarly, participants in plans without employer- frequently. with account balances of less than $10,000 are prima- asset allocation varies with plan size. Institute, January 1999. 0% funds and the addition of GICs lowers allocations to bond and money funds. Chart 6 the loan provision is lower for individuals with five or Loan Ratios for Particip Availability ants With Loans, of 49.8 percent for all participants in the 1998 EBRI/ICI addition, participant asset allocation by salary is pre- by Account Balance, 1998 Chart 14 Investment year to 59.6 percent for those earning more than 5.1 percent of the participants moved from the 34 per- All rights 14 $1,250,000 (table 2). However, participants and assets Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. ended up with a higher allocation in 1998, whereas the Tenure be construed as an attempt to aid or hinder the adoption of any pending legislation, regulation, or interpretative rule, or as 4% legal, attributed to those funds. An account balance for each than $10,000 is 36 percent, while the loan ratio for those and money funds. The January 1999 issues of the Alternatively, adding company stock EBRI Issue Brief within each of these groups are then grouped according Chart 12, Availability of Plan Loans by Number of 100% As tenure increases, the percentage growth resulting their 20s and 30s, while less than one-fifth are in their much higher percentage in larger plans. However, these Availability of Plan Loans ..................................................... 0–2 >2–5 19 >5–10 Income 1 >10–20 . Report submitted to Department of Labor, >20–30 > 30 Average Account Balance by Age and Tenure, 1998 13% Contracts equity funds, company stock, and the equity portion of • For those with outstanding loans at the end of 1998, rily young workers or workers with short tenure at The Employee Benefit Research Institute is a nonprofit, nonpartisan, public directed contributions have 72.1 percent of their assets Yakoboski, Paul, and Jack VanDerhei. “Contribution Percentage of Eligible Participants Wfewer years of tenure and those with more than 30 years ith Loans, by Tenure, 1998 • Employer contributions in the form of company stock Note: Minor investment options are not shown; therefore, row percentages will not add to 100 percent. accounting, actuarial, or other such professional advice. database. Indeed, 28.5 percent of participants have more sented. The following section examines participant 0–2 years 68.5 reserved. are concentrated in large plans. For example, 73 percent $100,000 per year (table 10). In contrast, the percentage cent to 66 percent range in 1996 to the 67 percent to of Plan Participants, 1998 sum of the elements below the diagonal shows that .................................................................. 20 13% 11% participant is the sum of the participant’s assets in all and ICI Perspective reported findings on 401(k) plan to the percentage account balance allocated to equity (chart 12) with account balances in excess of $100,000 is only 7 per- as an investment option to the base group results in • The average account balance (net of plan loans) for all participants was $47,004 at year- Tenure (years) policy research organization that does not lobby or take positions on legislative from contributions is damped by the size of the initial 50s or 60s (chart 4). Similarly, of those with account 40% aggregate figures do not consider the influence of the Pension and Welfare Benefits Administration, March balanced funds shows that nearly three-quarters of plan >2–5 years 60.4 the level of the unpaid balance represents 14 percent their current employer. In contrast, those with 36% 20 invested in equity securities. However, it is important to affect participants’ asset allocation behavior. Partici- Rates and Plan Features: An Analysis of Large 401(k) of tenure than for other participants (chart 14). Finally, than 80 percent of their account balances invested in account balances and shows how account balances relate $200,000 Chart 13, Percentage of Eligible Participants With than the average account balance at year-end 1996. of account balances invested in GICs declines as salary 99 percent range in 1998, while 1.6 percent moved from 5 of participants are in plans with more than 1,000 partici- proposals. The variation in account balances partly reflects 300% 30% 7.0 percent ended up with a lower allocation. The Characteristics of Participants With Outstanding Loans asset allocation, account balances, and loan activity for ... 19 funds. cent (chart 18). Plan balances are constructed as the sum of end 1998, which is 26 percent higher than the average account balance at year-end funds in 1998, using the same five ranges. substitution away from equity funds and balanced EBRI Issue Brief is registered in the U.S. Patent and Trademark Office. ISSN: 0887-137X 0887-137X/90 $ .50+.50 >5–10 years 66.1 balances greater than $100,000, a little more than one- Source: Tabulations from EBRI/ICI P Loans articipant-Directed Retirement Plan Data Collection Project. differing investment options offered by plan sponsors. account balance. However, investment returns become a 27% 1998. balances are invested in some form of equity securi- 80% note that the composition of these equity security of the account balance, net of the unpaid loan balance. account balances in excess of $100,000 are primarily pants in plans in which the employer contribution is Plan Data.” EBRI Issue Brief no. 174 (Employee Loans by Age, 1998 only 9 percent of participants with account balances of ................................................................ 20 equity funds, while about the same percentage hold no for the universe of plans estimated by Cerulli Associates. to age, tenure, and salary. The next section discusses the The median account balance was $13,038 at year-end (chart 13, chart 14, chart 15) 31% the effects of participant age, tenure, contribution increases. In addition, the percentage of account bal- Relationship of Database Plans to the the 34 percent to 66 percent range in 1996 to the 1 per- 15 pants, and these same plans account for 82 percent of all 2 >10–20 years 72.5 conclusions of this section are broadly similar when the 25% option, but GICs are not offered, participants in the year-end 1996, using data from the EBRI/ICI Partici- The Investment Company Institute is the national association of the Tenure (years) participant balances. Plan size is estimated as the sum of funds. Finally, in those plans that offer GICs and 1996. The median account balance was $13,038 at year-end 1998. The balances, The results of this cross-classification are shown 11 Asset Allocation of Employee and significant factor boosting growth in these accounts. As a half are in their 50s and 60s, while only 12 percent are in Asset allocations by plan size also are affected by Plan Loans Investment Company Institute. Quarterly Supplemental 26% 20s ties. Chart 14, Percentage of Eligible Participants With older workers or workers with long tenure, who have investments varies. Average Loan Balances Benefit Research Institute, June 1996). 30% ......................................................... 21 less than $10,000 have loans outstanding (chart 15). This >20–30 years 74.3 38% required to be invested in company stock have a equity funds at all (table 7). The percentage of partici- The shares of the assets and participants in the EBRI/ availability and use of plan loans. The characteristics of American investment company industry. Its membership includes 7,932 open- Balanced 1998. As noted earlier, the reported account balance 22% 3 behavior, rollovers from other plans, asset allocation, 60s plan assets (table 1). smallest and largest plans have a higher percentage of ances invested in company stock is similar across each of cent to 33 percent range in 1998. 26% Fifty-six allocation of account balance to equity securities is 0–2 pant-Directed Retirement Plan Data Collection Project. however, represent only amounts with current employers and do not include amounts active participants in the plan, and, as such, does not $150,000 in table 11. A percentage along the diagonal shows the company stock in addition to the base options, a combi- Universe of Plans Approximately result, median growth in account balances of partici- their 30s and virtually none are in their 20s. 30s the number of investment options. For those plans Loans by Tenure, 1998 Data. .......................................................... Funds 20 Employer Contributions end investment companies (“mutual funds”), 495 closed-end investment > 30 years 70.6 (chart 16, chart 17, chart 18) accumulated larger account balances through years of higher percentage of their self-directed account Could we send a friend or colleague a complimentary When total account balances are considered, the 23% is well below the 16 percent for all participants and less Did you read this as a pass-along? Stay ahead of employee benefit 50s Participants’ Accounts, 1996–1998 pants holding no equity funds increases with age and ICI database falling within each of the five plan size participants with outstanding loan balances also are 60% requiring that employer contributions be invested in >2–5 represents retirement assets in the 401(k) plan at the the income groups earning $100,000 or less, but drops to instructive to examine the participant-directed balances The vast majority of participants remained withdrawals, loan activity, and employer contribution assets invested in company stock than those in plans percent of the defined more generally to include equity funds, the 8% The project has now collected data for year-end 1997 and remaining in the plans of prior employers. necessarily represent the total number of employees at 200% 20% 40s3.3 million (or 21% Chart 15, Percentage of Eligible Participants With companies, and eight sponsors of unit investment trusts. Its mutual fund All 67.1 nation of the two effects occurs: Company stock appears Generally, tenure (or years of participation) and offering equity, balanced, bond, and money funds, asset Participants’ Accounts pants in their 60s with five to 10 years of tenure is a ............................................................... 21 Kusko, Andrea L., James M. Poterba, and David W. issues with your own subscription to EBRI Issue Briefs for only $49/ 40s overall exposure to equity securities through company 25 copy of EBRI Issue Brief? 19% contributions and the compounding of investment Asset Allocation by Age and Investment balances in company stock and lower percentages than one-half the percentage for participants with 16% >5–10 tenure. For example, 26.8 percent of participants in their classifications are close to those found in the 401(k) analyzed. groups. separately from the employer-directed balances. The 1998 EBRI/ICI database appears to be a representa- The ratio of participant account balances to company stock (table 6, lower panel). Offsetting the members have assets of about $6.2 trillion, accounting for approximately to-moderate salary groups (chart 9). At high levels of participant’s current employer; retirement savings held 7.8 percent for those earning more than $100,000. within their 1996 equity asset allocation group in 1998. Participants’ plans for which loan data are available in the 1998 50s Loans by Account Balance, 1998 equity portion of balanced funds, and company stock ........................................... 21 with between 101 and 5,000 participants. When both 20% the sponsoring firm. year-end 1998. The purpose of this Issue Brief 50.3 percent) of is to report In a typical 401(k) plan, an employee contributes a 17% Changes in Asset Allocation, 1996–1998 .............................. 21 healthy 59 percent. account balance should be positively correlated, as long- allocation does not appear to be related to the number of year electronically e-mailed to you or $99/year printed and mailed. • Approximately 3.3 million (or 50.3 percent) of the Wilcox. “Employee Decisions with Respect to 401(k) 30s • The average balances of older workers with long tenure indicate that a mature 401(k) 95 percent of total industry assets, and have more than 78.7 million returns. 14% >10–20 stock and pooled investments is considerably higher for $100,000 15% account balances between $10,000 and $20,000. invested in equity funds and balanced funds, com- 20s have no equity investments, compared with 43.1 per- universe (chart 1). In addition, the distribution in the 29 Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan The final section presents an analysis of the in plans at previous employers or rolled over into IRAs earnings tends to increase slightly with earnings for low- tive sample of the estimated universe of 401(k) plans. Participants in plans with mandatory invest- 4 60s Chart 16, Loan Ratios for Participants With Loans higher allocations to company stock are lower shares of earnings, however, the ratio tends to decline somewhat. 14% 14% Options EBRI/ICI database offer a plan loan provision to partici- This is indicated by the sum of the diagonal elements in (table 11, lower panel). Employees included in this analysis are active participants with positive company stock and GICs are added to the four basic (chart 19) findings from the year-end 1998 data. At year-end 1998, 40% Investment options are grouped into nine 12% portion of his or her salary to a plan account and deter- 20 For more information about subscriptions, visit our Web site at 34% the participants individual shareholders. 20s term employees have had more time to accumulate an Within a given tenure range, younger partici- Account balances in the EBRI/ICI database are net of plan loans. There is participants in the plan (table 5). When GICs are added 12% Bond Funds Plans.” In Olivia S. Mitchell and Sylvester J. Schieber, >20 12 participants present in the 1996 EBRI/ICI database 5 plan program will produce substantial account balances. For example, individuals in • The ratio of account balance to 1998 salary varies Data Collection Project. participants in plans with employer-directed contribu- pared with participants in plans with no Plans falling into this category cover 26 percent of the participants in the Send an issue to Account balances are net of unpaid loan balances. Thus, unpaid loan by Age, 1998 account balances in their 401(k) plans in 1996, 1997, and 1998. Participants ........................................................................... 22 28 cent of those in their 60s. Similarly, 22.6 percent of number of plans is virtually identical between the EBRI/ features of participants’ accounts that are common to all Cerulli Associates (1999) estimate that there were assets in most other plan investments, particularly in are not included in this analysis. Changes in Account Balances, 1996–1998 ment in employer stock tend to invest a higher table 11, which shows that 74.6 percent are in the same ........................... The average 23 For example, for participants in their 60s, the ratio of 6% investment options, asset allocation to equity funds does pants (chart 12). The loan feature is primarily a wide range of average account balances reported for 401(k)-type plans. Data www.ebri.org or complete the form below and return it to EBRI. 37% the EBRI/ICI Participant-Directed Retirement Plan Data categories. Accounts Equity funds consist of pooled investments present in the mines how the assets in the account are invested, 3 100% 10% to the basic investment choices, differentiation in pants experience higher median account growth than database and 18 percent of the assets. 10% balances are not included in any of the nine asset categories. eds., who enter or exit the database in 1997 or 1998 are not included in this Jack VanDerhei, Russell Galer, Carol Quick, and John Rea, “401(k) Plan Living with Defined Contribution Pensions. also are in the 1997 and 1998 EBRI/ICI databases. 9 their 60s with at least 30 years of tenure have average account balances in excess of Chart 17, Loan Ratios for Participants With Loans 7% Participant asset allocation varies considerably with age tions. For example, company stock, equity funds, and the with salary, increasing slightly as earnings rise from (chart 20) employer-directed contributions. for the universe of 401(k)-type plans compiled by the Department of Labor participants with two or fewer years of tenure have no ICI database and the universe estimate. three years of data, 1996, 1997, and 1998. This subset of 273,485 401(k) plans at the end of 1998, with about percentage of their self-directed balances in company cell in both 1996 and 1998. That is, 74.6 percent of However, there is wide variation in account account balance account balance to earnings rises from 125 percent for Equity associated with large plans. About 90 percent of plans $50,000 not vary significantly across plan size. However, among Collection Project database contained 7.9 million active Organization Asset Allocation, Account Balances, and Loan Activity,” EBRI Issue Brief no. analysis. primarily investing in stocks. These funds include equity 1996 EBRI/ICI choosing among investment options made available by Changes in Account Balances, 1996–1998 25 21 Money Funds older participants. This result is likely driven in part by 13 6 by Tenure, 1998 28 participant behavior by plan size is more discernible. 20% ..................................................................... 22 Approximately 0.5 percent of the participants in the database had a birth Three-quarters of these participants generally held from the Form 5500 for 1996 imply that an average account balance per active Philadelphia: University of Pennsylvania Press, 1998, The ratio of 401(k) account balance (at the current employer) to salary $185,000. For convenience, minor investment options are not shown. Account A synthetic GIC consists of a portfolio of fixed-income securities “wrapped” $20,001 to $80,000, and falling a bit for salaries Plan-specific information on loan provision is available for the majority of Funds Bibliography (table 3). Younger participants tend to favor equity equity portion of balanced funds represent 82.0 percent ............................................................................... 8 24 18 • The allocation of plan balances to equity funds varies equity fund investments, compared with 42.8 percent for 3.3 million participants covers 50.3 percent of the 1996 205 and ICI Perspective, Vol. 5, no. 1 (January 1999). The article is available Estimated as the sum of the 38.9 percent of account balances that is in Name balances around the average: Nearly three-quarters of stock than participants in plans without an employer- 37 million participants and $1.397 trillion in assets. 3% earnings between $20,001 and $30,000 to 174 percent for 5% with more than 10,000 participants offer a loan provi- (net of plan 30 such plans, allocations to all other investments do vary, 401(k) plan participants in 30,102 plans with $372 billion date that was missing and were not included in this analysis. participant was $34,416 (U.S. Department of Labor, forthcoming), a figure 23% mutual funds, bank collective trusts, life insurance alone is not an indicator of preparedness for retirement. Such an analysis the plan sponsor (employer). In many plans, the em- Chart 18, Loan Ratios for Participants With Loans 50% database also with a guarantee (typically by an insurance company or a bank) to provide the plans in the sample (including virtually all of the small plans). Some These participants’ aggregate assets rose 30 percent in 1997 and 25 percent the variation in asset allocation by age, as younger Participants in smaller plans tend to invest a bit more pp. 9–112. 14 Address about the same percentage of equity securities in through EBRI’s Web site at www.ebri.org and ICI’s Web site at www.ici.org/ company stock and 60 percent of the 9.5 percent of account balances that is in greater than $80,000. The increase in ratio likely 17 12% of the total account balances for those participants in across participants. Indeed, about 28 percent of Plans falling into this category cover 26 percent of the participants in the 0% those with more than 30 years of tenure. that is within 8 percent of the $37,323 average balance estimate from the 1996 EBRI/ICI universe of participants and appears represen- would require estimating projected balances at retirement by also considering The 1998 EBRI/ICI database accounts for 11 percent of This section examines the net change in account balance, the participants in the 1998 EBRI/ICI database have directed contribution. Company stock represents 29 benefit payments according to the plan at book value. plans without this information are classified as having a loan provision if any 8 earnings between $80,001 and $90,000. Thereafter, the in 1998. Because the sub-sample requires that participants be present in all particularly GICs and company stock. For example, sion, whereas less than one-half of plans with 10 or fewer • The ratio of account balance to 1998 salary varies with salary, increasing slightly as loans) for all by Account Balance, 1998 ...................................................... Other Stable 22 of assets. The 1998 EBRI/ICI database accounts for 22 separate accounts, and other pooled investments. are in the 1997 and 1998 EBRI/ICI databases. This ployer also makes a contribution to the participant’s 17 economy/perspective.html. balanced funds. The latest U.S. Department of Labor estimates (forthcoming) of the universe Organization A rollover from a previous employer’s plan could interfere with this positive Other or Unidentified $0 heavily in equity and bond funds, compared with those in participants have higher exposure to equity securities database and 17 percent of the assets. Poterba, James M., Steven F. Venti, and David A. Wise. Source of contribution (employer versus employee) can be matched to fund year-end 1996 and year-end 1998. 0% < $10,000 $10,000 >$20,000 >$30,000 >$40,000 >$50,000 >$60,000 EBRI/ICI database (VanDerhei, Galer, Quick, and Rea, 1999). Cerulli >$70,000 0% >$80,000 >$90,000 >$100,000 All Account retirement income from Social Security, defined benefit plans, IRAs, and other 0% plans with employer-directed contributions, compared participant in the plan has an outstanding loan balance. This may understate three years, while in 401(k) plans more generally, participants enter and leave, reflects a greater propensity of higher-income partici- Value Funds 10 participants have more than 80 percent of their Balances tative in terms of distribution of participant age, tenure, Participants with no equity fund balances may Unless otherwise indicated, all asset allocation averages are expressed as a 31.5 percent of the participant-directed account balances all 401(k) plans, 22 percent of all 401(k) participants, City/State/ZIP 7 Chart 19, Median Growth in Account Balance which reflects investment returns, employer and em- of 401(k)-type plans are for plan-year 1996. For 1996, they tallied 230,808 1% account balances of less than the average. Indeed, correlation because a rollover could give a short-tenure employee a high earnings rise from $20,001 to $80,000, and falling a bit for salaries greater than participants in ratio falls to 160 percent for earnings in excess of participants offer borrowing privileges, and two-thirds of 31 0–2 >2–5 >5–10 >10–20 >20–30 > 30 participants in plans with 100 or fewer participants have 11 percent of all 401(k) plans, 22 percent of all 401(k) –$20,000 –$30,000 –$40,000 –$50,000 –$60,000 –$70,000 Some administrators supplying data were unable to provide complete asset information for a subset of the data providers in our sample. Of those plans in –$80,000 –$90,000 –$100,000 Balances Similarly, consistent group of participants held $224 billion in We should note that maintaining a given asset allocation may have bond funds are any pooled account primarily account, generally matching a portion of the employee’s Associates (1999) report an average account balance (including loan balances 4 19 > $100,000 defined contribution plans, possibly from previous employment. However, two >$20,000 >$30,000 0–2 >$40,000 >2–5 >$50,000 >5–10 >$60,000 >10–20>$70,000 >20–30 >$80,000 >30 < $10,000 >$90,000 All Tenures >$100,000 1% compared with older participants (see table 3). For 15 the number of plans offering loans (or participants eligible for loans) because larger plans, while participants in larger plans invest a the growth in assets experienced by our constant group of participants exceeds Summary figures for year-end 1997 are available at ICI’s Web site at For the most part, asset allocation of participants missing salary • The median growth in account balance between 1996 “Pre-Retirement Cashouts and Foregone Retirement T dollar-weighted average. ables Plans falling into this category cover 20 percent of the participants in the 401(k)-type plans covering 31 million active participants, with $1.062 trillion pants to save, whereas the decline after $80,000 Address with the 72.1 percent exposure in plans without em- account balance. 1996–1998, by Age and Tenure ............................................. 24 account balances invested in equity funds, while about allocation detail on certain pooled asset classes for one or more of their clients. still have exposure to the stock market through company account balance, and plan size. the 1998 EBRI/ICI database for which the appropriate data are available, 45 percent of participants have account balances of less in plans with such employer-directed contributions (table required some adjustment in the composition of account balances or contribu- and about 27 percent of the assets held in 401(k) plans. –$30,000 –$40,000 –$50,000 –$60,000 –$70,000 as part of account assets) of $38,081 for 1998. The Profit Sharing/401(k) –$80,000 ployee contributions, loan activity, and withdrawals $100,000. –$90,000 –$100,000 other papers have addressed the projected role of 401(k) plans in retirement: $80,000. The increase in ratio likely reflects a greater propensity of higher-income the plans with 51–1,000 participants offer loans to the EBRI/ICI Tenure (y Tenure (y ears) ears) some plans may have offered, but had no participant take out, a plan loan. It www.ici.org/pdf/per06-01_appendix.pdf. Hardcopy may be requested by information is similar to the asset allocation for those with such information, growth estimates for the universe of 401(k) plans. Indeed, the U.S. Department 19.7 percent of their assets invested in company stock, participants, and about 27 percent of the assets held in invested in bonds, and balanced funds are pooled ac- contribution. Some employers require that the employer database and 24 percent of the assets. assets at the end of 1998, up 62.3 percent from $138 Your Name in assets. example, among participants with 21–30 years of tenure, bit more heavily in GICs and balanced funds than those Saving: Implications for 401(k) Asset Accumulation.” and 1998 was 86 percent among all participants Only plans in which at least 90 percent of all plan assets could be identified less than 0.5 percent require employer contributions to be invested in company Source: Tabulations from EBRI/ICI Participant-Directed 11 tions to rebalance the portfolio. In addition, this analysis compares changes in Council of America finds that the average account balance (also including results from contribution and nondiscrimination rule Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Even and Macpherson (1998), and Poterba, Venti, and Wise (1999). In 23 ployer-directed contributions (table 6). This higher At the end of 1998, approximately 60 percent of balanced mutual fund 28 percent hold no equity funds at all. However, about is likely that this omission is small, as the U.S. General Accounting Office calling ICI’s Research Department. The 1997 EBRI/ICI database contains of Labor reports an average growth rate in 401(k)-type plan assets of 18 percent in aggregate. The only notable exception is with respect to percentage of Approximately 13 percent of the participants in the database had a tenure stock or balanced funds. Indeed, about two-thirds of The distribution of assets, participants, and plans in the participants to save, whereas the decline after $80,000 results from contribution and between 1996 and 1998. The median growth in account than $10,000, while 13 percent of participants have 6, middle panel), compared with 23.4 percent in plans Source: Source: Tabulations from EBRI/ICI P Tabulations from EBRI/ICI P 30 articip articip ant-Directed Retirement Plan Data Collection Project. ant-Directed Retirement Plan Data Collection Project. City/State/ZIP A similar pattern emerges for other age groups, compared with 25.2 percent for those in plans with more employees. database was 401(k) plans. Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. Retirement Plan Data Collection Project. Table 1, EBRI/ICI Database: 401(k) Plan Characteristics counts invested in both stocks and bonds. billion at the end of 1996. 16 Source: Ta These participants appear bulations from EBRI/ICI P Company stock articipant-Directed Retirement Plan Data Collection Project. were included in the final EBRI/ICI databases. contribution be invested in company stock, rather than 9 stock. However, most of the plans with this feature are large, covering 9 per- year-end asset allocation over a two-year time period and does not capture loans) for participants in their 1998 survey (which includes profit-sharing and Collection Project. addition, Samwick and Skinner (1998) analyze defined contribution plan in smaller plans. When company stock is an investment assets were invested in equities. See Investment Company Institute, Quarterly median account balance growth for those in their 50s is Plans falling into this category cover 28 percent of the participants in the (1997) finds that more than 95 percent of 401(k) plans that offer loans had at NBER Working Paper no. 7314. Cambridge, MA: 29,899 401(k) plans with $290 billion of assets and 7,056,418 active account balances invested in company stock, which is higher for participants per year over 1991 to 1996. Cerulli Associates (1999) estimate that 401(k) plan Please refer to the January 1999 EBRI Issue Brief or ICI Perspective for a range that was missing and were not included in this analysis. In addition, allocation to equity securities holds across all age groups. constraints. two-thirds of those participants with no equity funds participants with no equity funds have investments in offering company stock as an investment option but not EBRI/ICI database for 1998 is similar to that reported nondiscrimination rule constraints. balance over the two-year time period is 86 percent cent of participants and 14 percent of plan assets (in the subset). account balances greater than $100,000 (chart 3). $47,004 at year-end 1998, which is 26 percent higher trading activity of participants. combination plans as well as 401(k) plans) is $89,000. although the pattern is less pronounced for participants by Number of Plan Participants, 1998 benefits more generally. ................................... 7 Supplemental Data. than 5,000 participants. database and 41 percent of the assets. least one plan participant with an outstanding loan. participants. assets grew 20 percent in 1997 and 15 percent in 1998. missing salary information than for those with such information. comparison of the EBRI/ICI database with other participant-level databases. to be representative of the aggregate EBRI/ICI database for one data provider, “years of participation” are used for the tenure variable. as directed by the participant. In these plans, it is Mail to: EBRI, 2121 K Street, NW, Suite 600, Washington, DC 20037 Mail to: EBRI, 2121 K Street, NW, Suite 600, Washington, DC 20037 or Fax to: (202) 775-6312 or Fax to: (202) 775-6312 EBRI Issue Brief Number 218 • February 2000 • © 2000. EBRI 24 18 16 20 22 4 6 14 10 2 8 12 February 2000 • EBRI Issue Brief February 2000 • EBRI Issue Brief February 2000 • EBRI Issue Brief February 2000 • EBRI Issue Brief February 2000 • EBRI Issue Brief February 2000 • EBRI Issue Brief February 2000 • EBRI Issue Brief February 2000 • EBRI Issue Brief February 2000 • EBRI Issue Brief February 2000 • EBRI Issue Brief February 2000 • EBRI Issue Brief February 2000 • EBRI Issue Brief February 2000 • EBRI Issue Brief February 2000 • EBRI Issue Brief February 2000 • EBRI Issue Brief February 2000 • EBRI Issue Brief February 2000 • EBRI Issue Brief February 2000 • EBRI Issue Brief February 2000 • EBRI Issue Brief February 2000 • EBRI Issue Brief February 2000 • EBRI Issue Brief February 2000 • EBRI Issue Brief February 2000 • EBRI Issue Brief February 2000 • EBRI Issue Brief February 2000 • EBRI Issue Brief February 2000 • EBRI Issue Brief 25 13 21 19 23 17 15 11 29 1 7 3 9 5 Issue Brief Issue Brief

Volume 218

Pages 28

EBRI Issue Brief

Jack VanDerhei

Sarah Holden

Carol Quick

Retirement