The average 401(k) retirement account balance rose 31.9 percent in 2009, according to a report released today by the Employee Benefit Research Institute (EBRI) and the Investment Company Institute (ICI) analyzing a group of consistent participants. The rise in 2009 was in line with the 2003–2007 pattern of steady increase in account balances and in contrast to the 27.8 percent decline in 2008.

CONSISTENT SAMPLE: Because 401(k) balances can fluctuate with market returns from year to year, meaningful analysis of 401(k) plans must examine how participants’ accounts have performed over the long term. Looking at consistent participants in the EBRI/ICI 401(k) database over the six-year period from 2003 to 2009 (which included one of the worst bear markets for stocks since the Great Depression), the study found:

• After rising in 2003 and for the next four consecutive years, the average 401(k) retirement account fell 27.8 per-cent in 2008, before rising 31.9 percent in 2009.

• The average 401(k) account balance moved up and down with stock market performance, but over the entire six-year time period increased at an average annual growth rate of 10.5 percent, attaining $109,723 at year-end 2009.

• The median (or midpoint, half above and half below) 401(k) account balance increased at an average annual growth rate of 14.7 percent over the 2003–2009 period to $59,381 at year-end 2009.

THE BULK OF 401(K) ASSETS CONTINUED TO BE INVESTED IN STOCKS: On average, at year-end 2009, 60 percent of 401(k) participants’ assets were invested in equity securities through equity funds, the equity portion of balanced funds, and company stock. Thirty-six percent was in fixed-income securities such as stable-value investments and bond and money funds.

MORE THAN THREE-QUARTERS OF 401(K) PLANS INCLUDED TARGET-DATE FUNDS IN THEIR INVESTMENT LINEUP AT YEAR-END 2009: At year-end 2009, nearly 10 percent of the assets in the EBRI/ICI 401(k) database was invested in target-date funds and 33 percent of 401(k) participants held target-date funds. Also known as lifecycle funds, they are designed to simplify investing and to automate account rebalancing.

NEW EMPLOYEES CONTINUED TO USE BALANCED FUNDS, INCLUDING TARGET-DATE FUNDS: Across all but the oldest age group, more new or recent hires invested their 401(k) assets in balanced funds, including target-date funds. At year-end 2009, about 42 percent of the account balances of recently hired participants in their 20s were invested in balanced funds, compared with 36 percent in 2008, and about 7 percent in 1998. At year-end 2009, 31 percent of the account balances of recently hired participants in their 20s was invested in lifecycle funds, compared with almost 23 percent at year-end 2008.

401(K) PARTICIPANTS CONTINUED TO SEEK DIVERSIFICATION OF THEIR INVESTMENTS: The share of 401(k) accounts invested in company stock continued to shrink, falling by half of a percentage point (to 9.2 percent) in 2009. That continued a steady decline that started in 1999. Recently hired 401(k) participants contributed to this trend: They tended to be less likely to hold employer stock.

PARTICIPANTS’ 401(K) LOAN ACTIVITY ROSE IN 2009: In 2009, 21 percent of all 401(k) participants eligible for loans had a loan outstanding against their 401(k) account, compared with 18 percent at year-end 2008 and year-end 2007. Loans outstanding amounted to 15 percent of the remaining account balance, on average, at year-end 2009, compared with16 percent at year-end 2008. Loan amounts remained in line with the past few years in terms of typical dollar amounts.

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In addition, analysis of contribution ac lans (see Brady EBRI/ICI 401( EBRI/ICI 401( participants, by findings an tml) , Holden, and Short, 2010). and EBRI Issue Brief d others k) k) F age, i gur Dat Dat year-end 1999 and year-end 2009 ’ research a a e A8 base Represent base Represent (www.ebri on the relationship .org/ p s s tivity during the bear ublications/ib between contribution rates and ). market of 2000– Participants’ Ages, Tenures, and Account Balances in the Figur 1999–2009 e A8 Consistent Group $7,495 $7,495 ............................................ 49 partici partici Figure 34, More Recently Hired 401(k) Pl (lower the higher the acco Cross-sections chan dollar increases target-date fu 29 y accounts in ears ago p pant a ants offered tar 70% e g )q e an .nds; at y uity fu (or decr d l ge ineu nds. in e gar-end et eases) pco o -dat unt ba In additio mposition ove f plan e funds, 46 2008, when S S lance), n n investm apshot of Y apshot of Y n compound 31 percent , 0.9 percent an Participants Hol and salary r time percent h ent o Percent ped beca of tions. ear-E ear-E age of on a larg e 40 of parti (lower the hi ld t use the 1(k) participants A nd nd h c dc em at Balanced ount 401(k) Account 401(k) Account cipants had er asset b select B year-end 20 alanc gh ion Funds er t e I a of hel nv se. in hes creased their e data ................................................... d tpartici ed in E tar 09. 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Availa e Earnings, a 90% ble at nd Wealth at 90% 401(k) 401(k) 401(k) 401(k) 401(k) 401(k) 401(k) 401(k) Plan Assets Concentrated in Plan Assets Concentrated in Plan Assets Concentrated in Plan Assets Concentrated in Plan Assets Concentrated in Plan Assets Concentrated in Plan Assets Concentrated in Plan Assets Concentrated in Equity Funds Equity Funds Equity Funds Equity Funds Equity Funds Equity Funds Equity Funds Equity Funds $7,191 $7,191 Year-End 2003 Through Year-End 2009, Figure 5 Figure 5 by Participant Age and Tenure November 2010 20s • No. 350 60.8% 61. 4% 1% 60.5% 2% 58.1% 53.9% 49.88% 6% 49 88% .8% 45.4% 40.0% 35.4% 32.9% 32.3% of information about individual 401(k) plan participant accounts. As of December 31, 2009, the database included for Participant Wid Wide Cro e Cro s Wss- ss- ith Loans, Sect Sectio io a an nby o of f Pa 401( 401( rtic k) k)ipa Un Un niverse iverse t Age, Tenure 19 , participants grew 95.0 percent, rising from $67,420 at year-end 1999 to $131,438 at year-end 2009 (Figures A8 and salary. 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Avail Gramm- able Figure 36, Recently Hired 401(k) Participants Now Sentime 53 40s nt, and Use o 59.8% f th 60. e I 6% nternet, 59. $3,563 a a 5% 2010.58. ” Inv 8% $6,864 eHold Hig stment Company 55.9%her Concentratio $10,560 52.6%Institute Fun 52 $15,367 .ns in Balanc 0% d 47. ame 3% ed Funds $20,371 ntals 43. 19 6% , n ................................ o. 6 ( $15,598 40.S 7% eptemb 37. $24,462 e 9% r 20 c c........ 10) 37. .39 0% 38 1996 1996 1996 1996 1996 1996 1996 1996 20s All P Pr resent esent Median Account Balance Fr Fr 75% om om Y Year ear 7% -E -End 2003 Thr nd 2003 Thr Among Longer-Tenured ough ough Y Year ear-E -End nd 2009 2009 F Funds unds Average Asset Allocation of 401(k) Accounts, rd To Totta all See Holden, VanDerhei, et al., 2008, and Holden, Van A Age G ge Gr roup oup F Fun unds ds F Funds unds F Fu unds nds Derhei F F,und und and Alonso, 2009, for data on earlier years. s s V Val alue F ue Funds unds S St toc ock k O Ot the her r U Unk nkno now w n n a Asset Allocation by Investment Options and Age, Salary, and Plan Size 9% to company meetin balanc partici funds than p e (or g th ants gr Average Asset Allocation of 401(k) Accounts, by Participant Age and Investment Options older pa eir stock and miiew 82. dpoint, n30s come-r rticipants. At year 4 perce e w eplac iq th h uity e alf nt, fun ment 10. arisin 4% b d 8% ove and half belo s te nee g-en nd from ds i ed d n 2009, 4. to be retir $6 2% 0,1 e low 44 44 at ment. w perc e ) r i a 5. ye m n en 3% ar-en For lon ong 200 t of9 th th participants in t d is con 20 gan i er 9. 03 t -ten 0% n s istent grou o 1ured parti $1 998, 09, wh 19. h 723 eir ile 8% p c at 2 ipa asset allocat also gre 0s hel year-en nts in t d tar w 51. h , risi d eir 0% g 20 iet on t 20 ng 09 -date s with (Fig o 19 fix 9.5 fe ures unds, salaries dperc -incom 5 an ent f e d 7 rom ). amounts or percentage of salary contribute Profit Sharin Associates, 2010. Holden, Sarah g/, and Jack 401k Counci Van EBR EBR l of Derhei. I/IC I/IC America. I I 1996 401(k) database 401(k) database 5“401(k 53 d, on average, 40 ) P Ann l2000 an Asset A ual vs. vs. Surv C Cerulli estim erulli estim ey of Profit llocation, Acco 2002 1(k) participants’ contri ates for ates for Sh 2005 aring an unt Ba all 401(k) all 401(k) lances, dbution behavior does not appear to have 40 2007 1( plans, 2009 plans, 2009 k) P and Loa lan2008 s R n Acti eflecti vity in 1999.” ng2009 2009 Plan participants in the 2009 EBR 16%I/ICI Recent 401(k) dla y Hi Domestic Domestic tabase red 401( had a Stock and Bond Market Indexes Stock and Bond Market Indexes ccount k) Parbalanc ticipant es that 14% s Now Hol were lower t d han $58,351, the size of the with t in plans at heir fu pr ll eaccount vious employ balane ce allocat rs or rolled ov ed to equity f er into in udividual ret nds edged do ireme wn sl nt accounts ightly a a in 20 (IR 09 A s) are to 8.0 not percent include of d partici in thp e ants. Endnotes ...................................................................................................................... $70, $70, and I 000 000 A Allll nvestment Options Among Part 4 44. 4.8% 8% icip7. 7. ant 8% 8%s With Two or Few 31 31. .8% 8% .................................................. 62 er Years of 15 15. . Tenure 4 4% % A14. comment on Investment Co Available t at his research. mpany I www.ici.or nstitut g/pd e (I f/CI) $3,426 fm-v colle 19n6.p ct annual d$6,845 f data EBR EBR o$10,686 n I/IC I/IC millio I 401( I 401(k k) )ns of D Da atabas tabas 4 $15,646 e e 01(k) plan par $20,836 ticipants as $16,231 a means to $25,106 Leach-Bliley Ac trend. Of more than 900 t. At no time has any nonpub >5–10 plans surveyed 38.4 percent had lic personal information that is personally 6% automatic enrollment in 2009, compared with 39.6 percent identifiable, such as Social Security of plans 50s at www.ebri 57.6% .org/pdf/briefspdf/E 58.8% 70%57.4% 15% 57. BRI_IB_011-2010_No349_EBRI_D 9% 53.9% 51.2% 49.5% CIIA.pdf 45.2% 42.3% 39.6% 37.8% 37.6% ? 20.7 million 401(k) plan participants, i Participants, by Age and Salary, 2009 n 1999 1999 1999 1999 1999 1999 1999 1999 20s 20s 38 38. .3% 3% 2 23. 3.5 54% % % 11. 11.2 2% % 7.7% 7.7% 3.5% 3.5% 5.5% 5.5% a 7 7. .3% 3% 1. 1.2% 2% 9% 2. 2.1 1% % 15% 1 100% 00% Figure 37, Many Recently Hired Participants Hold High Concentrations in Target-date Funds ..................................... 15% ........... 40 by Plan Size and Investment Options 54 20, 21 40s 11.2% 5.4% 6.3% 10.4% 27.4% $65,454 $65,454 39.2% securities te betw compared This translat $24,4 Investment Co Experience een 35 in $20, wit 19 nded to es into a h 000 9 24 9 . C to to hicago, percent o mpany I incr $7 $40, n3 a ,e nnua 17 IL: Pr 00 ase 5 i n 0, the fstitut (Figure participants i n 2 l avera ofit Sh 009 me e Pers g (an e 39 dian arin gro ). pectiv an Percentage of account balances, g Recently account w n /4 nual av their 60s i th rat 01k Co e 7, 15% e o no. 1 (Jan hir erag balan uncil f 1 ed 40 n e 0 c 200 . of growth 5 percent e was America, 1(k 9 uary (Figur ) $5, rate partici 20 ove 77 01a e of 20 b831). p in r the 11. ants te ), 1020 a More 2009 . 6 nd six-y 09 perce EBRI Issue Brief nde (Fig rec ed ar nt; u t er ntly h o perio a Fi e 1 be gure 6 less lik ). d ired par . T Long A8 h, no. e ). m ely er ticipants -tenur e 230 (February to hol dian accou ed dwer com part e n p t imore cany ipants All 16% 14% 16% 15% 13% 12% 16% 15% been materially As d average accou iscussed 50% 70% ab n affected by t t ba ove, asset allo lance. In h e bear market i fact, 38.9 pe cation varies with partici rc nent of equities from 2000 through participants had acco pant age. Thus, 17% Figure 2002. unt balanc 23 pr es o esents the analy f less than $1s 0,00 is of asset 0, while 41 For year-end 2008 data, see Holden, VanDerhei, and Alonso, 2009. 14% analysis. 30s 280 280 Ag Ag e e G Gr ro ou up pAll $17,662 $24,712 $31,789 $41,791 $51,619 $36,842 $54,167 Plan A Plan Assets ssets Per Higher centage of ac Concent cr ount balanc ations in Bal es, a 1998 and 2009 nced Funds b b Tenure accurately 60s portray how thes 54.1%41% 41% 41% 41% 41% 41% 41% 22% 55.5% e part 53. icipa 6%nts 55. manage their accounts. 7% 51.0% 49.5% 47.8% 43.9% 40.4% 38.4% 38.7% 40.5% Number, been in 2008, 35.6 p At year-end 2 transferred to or shared with EBRI. ercent of plans 009, 62 percen 16%20% in 2007, about t of balanced mutual fu 17 percent of nd assets plans in 2005, were invested in equities (see Investme and 10.5 perce 14% $61,346 $61,346 nt of plans in 2nt Company In 004. Eighty-four stitute, 30s 30s 48 48. .3% 3% 1 13. 3.5 5% % 7.7% 7.7% 9.2% 9.2% 2003 2003– – 3.8% 3.8% 2009 Consist 2009 Consistent ent 5.7% 5.7% Group Groupa 8 8. .0% 0% 2. 2.1% 1% 2. 2.1 1% % 1 100% 00% 2002 2002 2002 2002 2002 2002 2002 Averag Average e 2001a). Available at www.ici.org/pdf/per07-0 23%1.pdf and wwParticipant Age Group w.ebri.org/pdf/briefspdf/0201ib. 29% pdf Figure 38, Asset Allocation Distribution of 50s 13.3% Account Balance to Balanced Funds Among Re 7.8% By Age Group By Age Group 8.6% 18.2% 26.2%cently Hired 401(k) Participants, 26.0% 61% 20s 20s Percentage of account balances, 6 60. 0.0% 0% 5. 5.2% 2% 2009 22 22. .2% 2% 12 12.6 .6% % stock (Fi The net in th likely to balanc 401(k) Plan Asset Allocation, Account Balances, and Loan eir e (or chan 20s hold t g Age G ure ea mi ges in 40) an arget-date fun rning more rdpoint, oup >5–10 perc d t w einde enta th h thd an $ alf d ges of pa not s than a1 $12,292 b to ho 0 ove and half belo 0 part ,00 rticipants 100 ld 0 ici h a hi ad a pants gh co $19,146 me with mo ncen dian w perc ) a a trat m en ccount re years o ong $26,262 t in ion of th ve is balanc ste the con n d in th irs account e of is $35,771 e job: at th tent grou e n $57,9 on- bal year eq 35. p an ui als $45,274 c -end 2009, ty f Among lo e in o gre und compa w EB , mo nger R 47 $32,772 I n/I re tha y-tenur stock (Figure CI percent of inn do ved part estment ubl $49,458 ing ic sipants 41 from Brady, Peter. Compariso n of 2003–2009 Consistent Group “Measuring Retirement Resource 21%Adequacof 401(k) Participants to EBRI/ICI y.” 31% Journal of Pension Economics and Fina 401(k) Database nce. (Published 32 allocation 16.6 percent by i (percentage of (percentage of o nfvestment o particip 59% ants Assets) Assets) ptihad a ons and also 1 1 ccount bby pa alances rticipant greats e’ age. r than Sal $100, ary i 0nformation 00 (Figu $58,328 $58,328 re is 10 ). The availab variatio le for a su n in bs account et20. 20. of $58,351 $58,351 5% 5% balances 55 20. 20.3% 3% ? 51,852 emplo Mo Mon ny t ter-sponsore h h- -en end d level, level, Decem Decem d 40Per 1(k b ber 1996 er 1996 c ) ent plans, age of t to o holdin Sep Sep rt te em em cent g b ber 2010 er 2010 ly hired participants holding 25% c Copyright Information: All 40s 40s 60.5% 47 47. .3 3% %61. This report is cop 0%9 9.9% .9%60.0% 7 7.1% .1% 58. yrighted by the 7% 9 9.9% .9% 55.3% Employee Be 4 4.2% .2% 51.6% 51 8 8nefit Research I .3% .3% .0% >30 Y c c ears 46. 9 93% . .4 4% %nstitute (EBRI). It may be use 42. 2 2. .6 6 0% % % 38. 1 1. .6 67% % % 1 1 36. 00% 00% 2% d 35.5% Quarterly Supp percent of plan At year-end 2 $60, $60,000 000lementary Data s with automatic enrollment in 2009 applied au 009, 2.0 percent of the participants in the d ). ataba tomatic enrollment only to new se were missing a birth date entry, were younger tha $142,718 $142,718 hires, while 16 percent ap n 2 plied 0, or 8 In the database, there has been a downward trend in 401(k) plan participants’ holdings of and concentration in company 260 260 $140,000 $140,000 Equity Target-dateFigure 1 Non-Target-date Bonds Money 18. 18. GICs 6% 6% /Stable- 2007 2007 2007 2007 2007 2007 2007 Company Russe by Age ll 20 5500 ............................................................................................................................... In 30s 30s dex.>10–20 Tacoma, WA $24,369 : Frank Ru 4 43. 3.8% 8% sse $31,749 ll Company. 1999 1999 $38,859 – –2009 Consist 2009 Consist 6. 6.7% 7% ent ent Group Group $49,558 32 32. .4% 4% $59,904 ....................................... $42,388 17 17.0 .060s % % $60,422 41 Utkus, Steph Among the Salary Range 19 en P., a 99– 60s 2009 nd Jean consi A. Youn stent grou 18. B 9% alanc g. $55,502 $55,502 ed Funds p, t 20s Resilience h 10. ere 4%was a ( (M M in edian Age: edian Age: vola w 12. 30s ide ra tile markets: 9% nge of 45 Year 45 Year 20. in 3% 4 dividual 40s $56,878 $56,878 01(k s s) ) ) partici 15. partici 2%pa pn ant 50s t behavior ex22. perie 3%nSe ce, ofte ptember n in200 flue7 nce – d Account balan 60%20s ces are net of unpaid lo 30% an balances. 30% Thus, un28% paid loan bala 24% nces are not included in any o 25% 29% 25% f the eight asse 26% t and 42). categori in th partici $26, To e online 09 x eir plor p8 in ants 60s es we e th by 2wi wi 0e Cam r 03 to th $ th two qu e genera es 20,0 b $ rid tions or 59,3 g 0lly sm e 0 $4,400 $4,400 fewer years o of Univers to 81 t in $40, he im all. T 2000 i09 ty Press on h pact o 0 in e (a largest net f t n a sal e fn o nnual ary in ungoin re h Se avera ptem echan 20 g ld tar partici 09, a, ber ge g b g t eet he i gro 8, p n -date funds, c ation volved t me 2w 008, th rat dian in doi: 40 h acc e o e1(k) plans a share of 10. f o 1 o unt b mpared with 10 4.7 17/S14 per a part lanc cn ent d t e 7 icipants compl 4 was $ ;o 7 Fi 29 un 47 gure 2perc derstand 080 49,1 5 ent o 03 ) 78. . 806. e tel For lon fhow ty partici y ) Av esche ailabl g pical p er ants w -ten ing n e at 40 wi ured 1(k th on- ) 40% 100 100 20s partici partly r This report is Sourcep : Tabul e ants i flects ati nan u ons the the effects of from E 20 pdat 09 Be R EBR of EBRI an I/ICI Ppartici I/ICI articipant-Di 40 pd IC ant a 1(k recI’s ) ted Reti g database. ongoi e, ten remen u nre, sala g research into t P Beca lan Data Co b use asset alloc ry, contributio llecti 401(k) plan on Projec n ation is i t. behavior, rol partic nfluen ipants’ activity through lovers from ot ced by the inv her estment opt 15. 15. plans, ass 4% 4% year-end ioen t s Figures 14. 14.7% 7% Activity in 2009 About 3 i 50s 50s n 10, or 4. 39 39 3 mi . .0% 0%llion, of t 8.7% 8.7%he 401(k 7.2% 7.2% ) particip 1 12. 2. ants 0% 0% with accounts 5.4% 5.4% 13. 13. at5 5 the % % end o 10.2% 10.2% f 2003 2. 2. in t 9% 9% he EB 1. 1. RI 5 5% % /ICI 40 1 11(k 00% 00%) without permis40s 40s sion but citation of the source balanced f 3 39. 9. und asset is required. 7% 7% s, Non-Target- 1998, 7. 7. 2006, 7% 7% 2007, 2008, 34 34 and 2009 . .9% 9% d 17 17.7 .7% % $4,167 $4,167 automatic enrollment to all nonparticipants. older than 69. They were not . “The Impact of Em included in this analysis. ployer-Selecte Funds d InFunds vestment O Figure 37 Balanced Funds ptions on 401 35%(k >20) P –Funds 30 Y laears n Partic Funds ipants’ Asset Allocations: Value Funds >5–10 Years Stock 42 stock. In the wake of the collapse of Enron in 40s All $45,200 2001, participan $56,402 $66,814 ts’ aware $51,569 $51,569 nes$82,748 s of the need t $4,089 $4,089$97,805 o diversify may $68,502 have increase 2008 2008 2008 2008 2008 2008 2008 $95,185 $131,438 $131,438 d and EDecem quit $20,000–$40,000 30s y b Aer 20 ll 14. 14. 401(k) Plan Characteristics, by Number of Plan Participants, 2009 1% 1%0 13. 13. 9 5% 5% . Valley 13.For 1% Target 22% ge, PA: $5,778 -dat6. eThe 0% N20% on-Target Vanguar $14,378 7. -dat d 1% 22% e Group, Van B 12. ond $38,847 4% 19% guard Ce22. nter M 19% 8% oney for R $53,239 etire 38. GI 25% ment R Cs 6% and Ot $49,178 esearc her 22% h, March Com pany by the relationship among the three factors mentioned above: contributions, investment returns, and withdrawal and Note: T http://journals 6 he analysis includes 401(k) p .cambridge.or lan parti g/ac cipants tio w n/ ith tw displ o or few ayAbstract?aid er years of ten 60s 60s =219 ure in the year 7036 indicated and in a plan offering company sto $3,972 $3,972 ck as an investment Figure 39, Average Asset Allocation of 401(k) categories described. Other research suggests th 240 240 at most 401(k) participants do no Accounts by Participant Age and Investment Options Among Participants t make active changes to their asset allocations during a c ny $3,902 $3,902 $3,893 $3,893 60 $3,889 $3,889 target-date partici five to plan partic p 1 ants i 0 year ipa ba nn 50s 50s their lanced f s ts have of te 6nure, 0unds, s ear fared over a an nd which ing mor 19 pe incr giv e rcent te e han n t 4 4 ased 1. 1. Target-date i3% 3% of pa $1 me perio 3.4 00, rticip pe 000, rcent dants with more than 30 ye , it th i $3,832 $3,832 e me age s important 9. 9.points dian 5% 5% acco bet tount w analyz een balanc 2e a 0 34 34 ars of 08 . . gro e 9% 9% aw n tenur a d 2 us $3 p o 00 f27,8 consiste 9 e (Figur (Figur 71. 14 14 e 2 e 3 nt part .3 .30 2 % % , lo ). icipa wer pa nts (a nel). At ? $1.210 trillion in assets. $3,824 $3,824 Figure 47 20s 20s availabl allocation, 2009. The e 60s 60s to pa wit rep hrticipants, Fi o drawals, loan rt is 32 32 divi . .2% 2%ded gure 24 presen activity, an i7.6% 7.6% nto five Equity sectio 6.9% 6.9% d employer ts ns $49,024 $49,024 asset : The 1 1alloca 3. 3. f cont irs 9% 9% date Balanced t d tion ribu es7.3% 7.3% c by tion rib salary e rates. s the EB 19. 19. Bond range an This 9 9R % % I/ research ICI 40 $125,093 $125,093 d Money 8 8 by i . .1( 3% 3% k) report n vestment o data 2. 2. GICs 9% 9% b exami ase; the second /Stable- pn 1. 1. tes the relat i2 2 ons. Partici % % Company 1 100% 00% focuses on ip oa nn ship t Figure 1, 401(k) Plan Characte Investment Options, All Ages >5–10 ristics, $19,808 by Number of Plan c $29,200 Particip $38,613 ants, 2009 ................................................... $51,191 $63,501 $44,546 ...................... 7 $67,254 databas e had accounts at the end of each year from $3,700 $3,700 2003 through 2009. Figures A1 and A2 compare the age and S&P Prelimin 500. Ne 40s ary Fi w York, NY: Sta ndings.” Worki 9. 9.8% 8%ndard & n Many Recently Hired 401(k) Participants Hold g paper prepared for 16% Poor $3,659 $3,659 ’s. 15% the C 16% enter for 13% Pensi $3,661 $3,661 on and R 13%etirement R 18% 9. 9.5% 5%esearch (C 16% PRR) Current By Jack VanDerhei, 2010. Availa Source: Tabulations from E EBRI; ble at S https://in arah Hol 2 2 BRd I/IC stitutional.van en, I P I articipant-D CI; and Luis Alonso, EBRI irected R guard.com etirement P /iam lan D /pdf/CRRRE ata Collection P $115,257 $115,257 S.pdf roject. Age 33 19 some plan sponsors changed option. Funds 80 80 Average Average Total plan design (se funds e Van balanc Derhei, 2 ed funds 002). In addition, some of this movement m Funds Funds Stable-Va alue Funds y be the result of Stock $120,000 $120,000 $50, $50, 50%>$40,000–$60,000 000 000 $47,004 $47,004 8. 8.3% 3% $12,673Percentage of Ac b $26,824 count Balance Inv $60,760 e>10 sted i –20 Y n Bal earsanc $81,450 ed Funds $81,700 2009 2009 2009 2009 2009 2009 2009 With Two or Fewer Years of T 8. 8.2% 2% enure ........................................................................................................................... 42 loan activity. Among the co P 60s 60s nsistent gro articipants S&P 500 S&P 500 wh up, there o were was you a 4 4 n7. 7. ger or had fewer ye wide ran 8% 8% ge of indivi 1 10. 0. ars o d 0% 0% ualf part ten41% u icipant re experienc ex 29 29per . .3% 3% ie en d t ce, oft he largest en inf 12 12 lincreases i u. .ence 9 9% % d by th n ae v erage given year. For example, an ICI survey of Because of these changes in the cross-secti At year-end 2 Number of Plan Participants 009, 6.8 percent of the participants in the d Total Plans recordkeepers co ons, comparin Total Participants vering nearly 24 million a g average accou tabase were missing a date of Total Assets nt balances acr DC plan participant o hire entry an ss different ye Average Account Balance accounts found that d were not included in ar-end cross- 9 a Funds 7. 7.1% 1% Funds Funds Funds Funds Value $45,519 $45,519 7. 7.1% 1% Stock year-en Recommended C longitudd A A 30% ina llll20 l sa 08mple , 76. 40 40 6 itation: >10–20 ). T . .perce 6% 6% 39% his co Percentage of Eligible Participants With 401(k) Loans, nt 7. 7. 4% 4% Ja of 9.5% 9.5% nsistent gro ckpartici V $44,740 anDp eant r 7.2% 7.2% he up of si, held S $55,572 a partici ra no h 1 1 Holde 1. 1. non 4% 4% pant -s n target- is $65,760 , a 5.3% 5.3% dra nd Lui d w ate n s Al fro ba 12. 12. on m $81,347 lanced 6 6 the % % so, “ annu 4 f0 unds. 1 9 9(. .al k 2% 2% ) P $96,200 cross-sections. This At year- lan Asse 2. 2.7% 7%end t Al $66,077 2 loc 1. 1.009, 6 6% % ation 8report 0 , Ac .0 $109,723 $109,723 1 100% 00% $92,998 c perc o a un nent of alyzes t Equity, bond, money, and/or changes in asset allocatio between acco paunt rticipant n also vari balanc accou es a es with n nd t ba partici plan lances ov 6. 6.6% 6% size pant (Fi ser time, ’ age, gure 2 6. 6.0% 0% ten 5 analy , to ure, p and salary. zpanel ing a )grou , butp o much of f consistent the v 4 ariation ca 01(k a ) partici n be e pan xts; the t plained hird by The cross-sectional analysis for this pub 220 220 Pension EBRI Em 50s ploye Policy Equi e B ti Issues Conf es i enenfit cl R ude equi esearc ty funds, company stock, and the her Inence, stit12% ute Iat Miami slicatio sue Brn fo ief11% (IS University, Ox und that c SN 08 equi 87 5. 5.2% 2% ? ty porti 12% 1 o3 nso 7Xford, OH, ) is on of bal lidating the multiple accounts to publianced funds. “Funds” i s10% he Jun d mont e 8– hly b 9, 10% y t200 he E ncl 1b. m ude mutual pl oyee 13% the sin Be nefit R gle individual o esear 12% ch Institute, wning tenure distri Average Average butions of the 2003–2009 consi 6. 6.0% 0% stent group with the cross-sectional database. Figure A3 highlights the Year-End 2009 Snapshot of 401(k) Plan Loan Activity Figure 2, 401(k) Plan Charac 30%teristics, by Plan Assets, 2009 5. 5.8% 8% 31% $43,215 $43,215 .................................................................................................. 7 4. 4.5% 5% 37% 5. 5.4% 4% 1998 39 Group Brady, 1998 Peter, 2009 Sarah Hol 1998den,2009 and Erin Shor High Concentrations in Target-date Funds 2009 t. “The U.S. 32% 2009 Retirement 4. 4.8% 8% 1998 Mar2009 ket, Secon 1998 d Qu 2009 arter 2010.” 1998 Investment Co 2009 1998 mpany 2009 regulations put in place by the >$60,000–$80,000 Pension Protection Act of 2006 (PPA $29,612 4. 4.5% 5% $50,318 ), which resulted in reg 4. 4.3% 3% $107,614 3. 3.9% 9% 3. 3.5% 5% $135,800 ulations that limit the length $139,928 of time Plan Size by Number of Participants T Te enu nur re ( e (>20–30 y yea ear rs s) ) $80,015 $94,757 $107,253 $128,751 3. 3.9% 9% 3. 3.5% 5% $148,253 $106,955 $138,566 The account relationshi Distributio ratio o So So 1–10 ur ur balan c cp e: e: f a T Tparticipant abul abul n of Participants’ Compan 35% m ce b ong th at ati io o 13.5% e ns ns tw f fr reen e t o o acco m mh EB EB ye ree factors m R Runt I Iar-en / /I IC CI I P Pbalanc ar ard t ti ic c19 i ipa pant nt 99 e to e - -D D nt i ia r re e ioned abov salary is nd ye c ct te ed R d R y Stock et et ar-e i ir rem emposit nd en en e: t t P P 2 Allocations b contributio l lan D an D 009. ively corre at at For a C a Co o l l l lec ec ex n late t ti is, am o on P n P investment r d w ple, t r ro o y j j>5–10 Y ec ec Age ith t t. .he age ears avera an etd te u grns, an e ac 3. 3.nure. 1% 1%count 3. 3.1% 1%d with Parti baldrawal ac nce o ipants i an f partici n d th loan ei pr ants Figure 40, Recently Hired 401(k) Plan Participan The 20 1100 09 13 data th St.bas NWe , S cover uite 8 $41,156 $41,156 78, ed Wa 42 shi perc ngton ent o 11,410 , DC,f 2 the u 000ts Are Less 5-40 nivers 51, at 63,199 3. 3. e $ 5% 5% of active 3 Likely to 00 per ye 4 ar Hold 0 or 1is (k) $3,450,224,322 in Comp pla clude n any Stock d as partici part p of a...................................... a m ntse, 10 mber pe ship rcen su $54,593 bs t of criptplans ion. Pe ,............. and riodi- 43 Balances, this analysis. sectional snapshots can lead t 11.8 percent of DC plan participants cha balanced funds and Loan Activity i by Participant Age, Tenure, Account Size, or Salary, Selected Years o n false conclusions. For exam 2009,” 48.4% E nBRI ged Issue Br the asset alloca 13.2% ief, npl o. 35 e, newly formed plans would te tion of their account balances in 2009 a 0, an 7.0% d ICI Perspective, 18.6% Vol. 1 8.5% nd to pull down the aver 6, no. 3, nd 10.5 percent changed November 2 age 010. 60s funds, bank collective trusts, l10% ife insurance separate acc 9% ounts, and any pool 10%2. 2.9% 9% ed i 2. 2. 8% 4% 4% nvestment product pri 8% marily i11% nvested 29% $106,563 $106,563 10% partici two diff pants h erent 60 60 c eo ld no nsistent gro non-taru gps et-date draw ba n from lanced the fun data ds. T bas he: e se (1con ) a $99,644 $99,644 d grou -lar $105,823 $105,823 gest net p of 4.3 mil chan lion ge in participants asset allo wit cation to h accou non-equity nt balances U.S. Departm ent of Labor, Bureau of Labor Statistics. National Com $39,885 $39,885 pensation Surv 2. 2.EBRI/ICI EBRI/ICI 0% 0% ey: Employee Benefits in Priv 1. 1.7% 7% >2–5 Years ate The presents a d them resulted in an overall inc iffe Van rencg euar s in sna d th Grou pshot of e inp. vestme Ho part w nt op America Sav icripant ease of tion account s of 7.0 pe fe es 20 re rcent in the av balanc d 09: by A R plan es at e s po year-en pons rt on erage 401(k) a ors Van . For e d 2009; t guar xd ample, ccount bala 2 h0 e 0fourth 8 the Defi per looks at parti ne nce. This statistic should be interpreted d Contr centage ibutio of 29% cipa pn la Plan n as nts’ asset s Data ets inves . Valley ted in Age Group >0–50 percent >50–90 percent >90 percent distributio a a 40% n of account balance sizes across the databas9% 9% e at year-end 2009, the 2003–2009 consistent group, and the Institute Fun A A t ta ar rg get et- -da da 0–2 0–2 t te f e fund und damentals t ty yp pi ic cal all ly y r reb ebal al 19, anc ances es no. 3 i it ts s p po o-r rQ2 t tf fo o 5 5 l l (Oct 9. 9. i io o t t0% 0% o o b bec ec ober o o m me e l l20 es ess s10 f fo o c c ). A Fi us used ed gv 4. 4. u o o ailable 8% 8% r n gr n gr e 41 o ow wt th h at a and m nd m ww o o r rw.ici.org e f e fo o c cus us 22 22 e ed o d o . .9% 9% / n i n i pd n nc cfo o/m m fm e as e as -v19n i it t a appr ppr 3- o o ac ac q2. 13 13 hes hes .3 .3 p an an % % dfd pas d pas s ses es t the he calAll Plans s postage rate paid in Washington, DC,Percentage of recently hired 401(k) participants and additional mailing office 27% s. POSTMASTER: Send address changes to: EBRI Issue Brief, 1100 ALLFigure 3, EBRI/ participants could be required 50s 200 200 >$80,000–$100,000 ICI 401(k) Database Represe All to hold co $77,059 $44,780 mpan nts y stock contributed to their accounts by Wide Cross-Section $92,137 $84,982 $105,335of 401(k) Un $164,466 $126,711 iverse ........................................... their employer; specified rules regarding $146,877 $196,485 34%$106,850 $212,205 $139,932 ............. 8 $100,000 $100,000 11–25 in the securi $37,323 $37,323 ty indicated. 13% 13% Participa $40, $40, nts’ al 000 000locations to company stock r 11,518emained i 197,472 n line with previou $10,195,105,081 s years. Forty-six percent (or $51,628 9.5 million) of the in th Availability activity. 60s—havin Equity, bond, money, and/or eir 30s ro Partici g h se 46 ad more p and Use of 401(k) Plan Loans b ants who were 0.2 time perc ent to accumulat youn (anEXECUTIVE 18.8 ger pe or had fewer e assets—tend rcent annual y ye Plan Size a ato ha rs of tenure verage SUMMARY ve gro higher w e th x ratios, w peri rate ence ) betw hile d th ee t e lar h n the ose in gest i en their d o ncre f 2 1 ases in average 0 999 s had the lo and the e west nd of 44 Relationship of Age and Tenure to Account Balances acco the asset allocation of their contribu perc unt balanc ent o 20% 20% f 401 e, but wo (k) plan uld tell us no assets. The tions during 2009 (see thing ab EBRI/ICI out co proj nsistently ect is Holden, 2010). Covering uni participating workers. Simila que because it i >2 2–5Y 5 nclu Years a ye desar earlier, the ICI survey of data rly, the aggreg provided 9 95 .5% % by a ate average wide var account iety of 34 Industry i . “Contributio n the United 20s 19% 19% 19% 19% 19% 19% 19% n BeStates, March 2007 19% 19% 19% 19% 19% 19% 19% havior of 401(k) Pla 84.9% . Washi n Participants. ngton, DC: U.S. De ” Investment Co 7.3% partment of mpany I Labor, Bure nstitut 7.8%e Pers au o pective f Labor Statistic 7, no. 4, as nd , Figure 41, New Participants Tend Not to Ho fund inv at the en estme d o Tenur f each ye e ( nts involve years)ar at d t le hast from y e shar 1996e ofe pa arld High Co -en rticipants com 2000 d 2003 t ncentratio hrop 2002 ugh letens in Co year-en ly esche mpany d 20 w 2005 ing bo 09, Sto an nd ck d fu .......................................................... (2 2007 nd ) a consistent s, which incr 2008 group o eased 1.9 f 1.6 m 2009 percentage illion 43 Forge, t tar arge get t dat dat PA: e o e o > > Th f f2 2 t t–5 –5 he he e Va f fun und, d, w w ngu h hi ic ch i h iard s s u us s Gr ua ual ll ly youp, i inc ncl lu uded i ded i Van 50 50 n t n tg h h .1 .1 e f e f uar % % u und’ nd’ d Ce s s nam nam nt e eer . . for R5 5e .7 .7 tirement % % Research, 2 29.2 9.2 2009. A % % vailable at 1 1 5 5. .0 0% % allocations, i comp 13t any stock rises with h St. NW nbcludi , Suite 8 ng 7analysi 8, Wap sh lan in s of 40 gto size. n, D1 A C( , k) pa 20 port 005-4 ion of rticipants’ use 051. C this tr opyrige ht n 20 d occ of $94,956 $94,956 10target-date by E urs bec mploye ause e B funds b, c enfew small pla efit (a Relso cal search Ilnst ed “li nis offered company stock as an tute. A fecycl ll right e” s r funds eserved ); a . No nd th . 350 e fifth with caution, as it may not represent th The positive correlation betw >5–10 8.2% c een tenure $23,033 e total 401(k) assets owned by the and account balance is expected because $33,161 $43,255 individu $56,672 al. The long-term employees have $70,032 impact of account consolidation $49,179 had mor $74,908e time 199 Report availability 9–200 1–100 9 coN nsistent gro ew 4 : This report is available on the Internet 01(ku ) P p. Fi art gures A 44.5% icipan4 ts a n Td A e 10.5% n5 d N provide ot to H informa 13.1% at old www.ebri Hig tion on the asset allo h C 12.2% .o org n and at centra 10.0% www.ici tioncation s in .org Cof o 6.8% m pa prti an cipants i y Sto0.1% cn th k e 2003– 20s 66.9% 35.0% 7.4% 41.5% 31.3% 10.2% 5.1% 8.2% 4.0% 3.1% 3.7% 3.5% 10.5% 6.1% Participants include the 20.7 million 401(k) plan participants in the holding the type of fund indicated, year-end 2009 E 2009 BRI/ICI 401(k) database. balanced funds; and GICs >$100,000 40 40 $57,935 $130,689 $251,767 $318,340 $327,871 the notification 26–50 of blackout periods; and 30s 8,717 required quarterly s 86.0% 316,512 tatements that 7.6% $15,894,079,012 must include notice highlighting the impo 6.4% $50,216 7.1% rtance of 401 Figure 4, More Than (k) pa b b rticipants in t One-Thir he 20d of 401(k) Par 09 EBRI/ICI 401(k ticipants ) data Are in Their 20s or 3 base w 17% 17% 17% 17% 17% 17% 17% ere in plans that offered 0s or Have Shocomp rt Job Tenure any stoc $83,161 ................................ 9 k as an investment account 200 ratios (Figure 9 (Figur 200 EBRI Issue Brief 7. Availa balan 0–2 es A9 > > c 17). 5– 5– e b bl 10 10 an In e e at tw d , no. additio een A www.bls.g 10 2 ye ). Because 38 n ar-en (O , for ctober ov/ d any 27% 20 ncs/eb youn 03 given age a 20 4 40. 0. a01c ger partici 9% 9% nd ye s/s). p 24% Availab /$82,768 $82,768 ar-e ebn sd ten m0006.pd nd pant 2 le at 009. u s’ account 27% re 7. 7. w com For 9% 9% fww.ici.or bex inati ba am 23% la on, the g/ ple, t nces te pdf/ he per ratio o 35 35 nde avera 0 . .21% 2% 2% 7d -0 to be f4 g accou .p e ac df small count and n $83,161 25% t bala bal (Fi 16 16 g nce to a ure . .nce o 1 1% % A9 22% salary v f), particiaries pants 32 plan CONSI recor GI GI SC C TENT SAMPLE: s sd ar arkeepers a e guar e guaran ant te eed i ed i n n nd, v v Because 4 e e therefore, s st tm me en nt t c co o n nt tr r0 a ac c portray 1 t ts s(. .k) bals the activ ances can fl ity o uctuate f participants i with market retur n 401(k) plan 16% 16% 16% 16% 16% 16% 16% ns fr16% 16% 16% 16% 16% 16% 16% om year to s of varying sizes—from very year, meaningful large balance would tend to be pulled down if a la recordkeepers covering more than 22 million DC plan particip 180 180 https://institut All ional.vanguar 18% d.com/iam rge number of /pdf/HAS09.pdf 18% participants retire and roll over their account balances. 17% ant accounts f 19% ound that 14.4 0–2 Years 18% percent of DC 18% plan participan 21% ts Sixty-one percent of >10–20 the 401(k) pla $52,192 ns 5.8% for which $64,371 loan data we $75,666 re availabl$92,748 e in the 2009 $108,990 EBRI/ICI 40 $74,249 1(k) databa$106,334 se offered points partici Cerullip Associates. “Retireme betw ants 30% 101–500 ee win 2 th accounts 008 and at 20n 09 the en 16% 16% 16% 16% 16% 16% t Markets 20 (Figu 45.2% d o re f20, ea09.” lowe ch year 12.7% Cer r panel at ulli Qu le)ast from year-en . antitative U At year- 8.9% endp 2 date 14.0% 008, d 1999 through year . Boston, M 64.6 8.2% percA ent of : Cerul 15% 15% 15% 15% 15% 15% p -en articip 6.9% li Associates Inc., d 2009. ants hel The “2003– 0.6% d no 200 bond 9. There is a positive correl Patio ercent n between age of 401( age and acco k) recent 15% 15% 15% 15% 15% 15% ly hiunt red bala partic nce amo ipants ofn fer g ed c partici omp pany ants covered by stock holding tth he e 2009 database. 30s Figure 42, Asset Allocation Distribution of focuses on to accumulate an account bal investment o varied with the participant’s age and te 67.8% Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. par 41. p N 2% tion. For t oicipants’ 4 te: Ro8. w0% percentages may not add to exam 01 33. ( aple, k) loan nce. Howeve 7% less than activit 25. nure 0% Recently Hired Par r, with the current employer. The larg 100 percent because of roundi y a rollover from a previous e 1 percent . 8.7% of part ticipant Account Balance icipants 5.1% ng. in s 9. mployer’s 5% mall plans wer est increases in average 4.1% plan to Company could interfere with this positi 3.e 7% offered com 3.Stock in 401(k) Plans 2% account balanc pany stock as 4.2% 9.4% ve e an 4.8% 40s 84.1% 15% 15% 15% 15% 15% 15% 8.9% 33% 7.0% 2009 co and/or other stable-value funds nsistent group by age. 42.3% 50s 50s 4.5%10.0% 10.1% 8.5% 3.3% 21.6% c c $81,809 $81,809 C Cerulli erulli > >1 10– 0–20 20 34 34.7 .7% % 9 9.8 .8% % 3 37.7 7.7% % 1 17 7. .7 7% % diversification (see U.S. Join 51–100 R Ro o w w pe pe a >2–5 r rc ce ent ntage ages s m ma ay y no no t t add up add up t Committee on t to o 1 1 00 per 00 per 24% c c6,840 e ent nt be be Taxation, 2006). c cau aus se o e o 25% f f r ro o un un 485,134 di ding. ng. P P er er 25% c cent entag ages es ar are do e do $24,151,482,187 21% l ll lar ar- -w we ei ig ght hte ed av d av 22% e er ra ages ges. . 26% $49,78323% ww $80,000 $80,000 w.ebri.org/pdf/briefspdf/1001ib.pdf 56 3.5% 0–2 Years option (Figure 22). Amo >20–30 ng these $113,980 participants, 72 $133,432 percent hel $149,906 d 20 percent or $178,125 less of$204,604 their account 13% 13% 13% 13% 13% 13% $150,642 balances in $190,348 company in th contributio analysis of 401(k somewhat wit Age Group eir 20s ro 10%Account balances are based on administrative records and cover the account balance at the 401(k) plan participant's current emp ns produc h se 58 salary. For example, ) plans mu 6.6 ed sign percent st examin ificant (a $72,173 $72,173 37.9 account amon e ho pew partici rcent a bala g partici Percentage of Account Balance Invested in Balanced Funds nce nnual p p gro ants’ accounts hav ants in a wv th. erage th In contrast ei 2.9% r gro 20s, th wth e, rate performe 12% 12% 12% 12% 12% 12% e ratio 30s the average account balan ) betw ten d o d ee s t v n the er the o increase en lon d o g slightly wit f t loyer. Retirement 2 e003 ce rm. Looking at of an older d th h salar e end o y for f corporations t changed the Figure 5, 401(k) Account Bala $30, $30, 501–1,000 000 000 asoset allocation of their a small busine pesses—with a v nces rcent 44.2% Among 401(k) Participants Present From Year-End 2003 Through Yea ageccount balances in 20 of theiariety of r ac 12.9% count inves balanc tment opt 08 and 12.4 pe 7.9% e indicatied ons. i13.7% n c rcent ompany changed s 7.0% tock,the asset allocation of their 1998–2009 8.2% r-End 2009 2.6% ............. 11 40s 20 a pla 64. n loa 5% n 41. provision to 1% 9. 50s 7%part 30. icipants (Figur 5% 21.7% e 81.1% 43). Th 8.8% e loan feature was 5.9% 10.7% 10. 2.4% 1% more common 5.1% 4.1% ly associated 8.2%4.4% with 6.4%large 8. pla 0%ns (as 5.1% funds. 2009 co With Company Stock, by Participant Age At year nsistent gro -end 200 up” is 9, 62 introduce .0 percent 11% 11% 11% 11% 11% 11% d beca of partici use the ..................................................................................................................... pants co tenurentinue of the d to “199 hol 9– d200 no bon 9 co 11% 11% 11% 11% 11% 11%nsistent gro d funds, butup” has 2.6 percent o grownf lon partici ger,p and ants 43 Examination 20 20 of the age composition of account balances finds that 52 11% 11% 11% 11% 11% 11% percent of parti 2.0% cipants with account balances of investment o Equity, bond, money, and/or p> > tion, w 2 20– 0–30 30 hile 66 percent of pa 34 34r .1 .1 ticipants % %30% in plans with 12 12. .1 1% % more than 5,00 3 38.3 8.3 0 par % % ticipants 1.7% wer1 1e5. 5. offer 5% 5% ed company correlati occurred among older particip About half of t 160 160 N No oon because a rollover could give t te e: : “ “ F Fu unds nds” ”raditional IRA assets resulted i in nc cl lude ude m mut utua ual l f funds unds ants with fewe , , b bank ank c co ol ll lec ec a sh t ti iv ve t e t r years of tenu o from rollovers r rru ut- s stenured emplo t ts s, , l li if fe e i ins nsur ura anc ncre. For example, among part e e from employer- s separ epar yee a high a at ate ac e acc co o un unt ts scco , , and and spon unt bala a any ny s p p ored retir o o o o l led i ed i nce. There is some discernible evidence icipants in their 60s with two or fewer nv nves ese t tme m men ennt plans. See Brady, Hold t t pr pro o du duc ct t p pr rim ima ar ri ily ly in inv ve es st te ed d in in en, 25 savings held in plans at previous employers or rolled over into IRAs are not included. Account balances are net of loan bala >5–10 % 23% 21% 23% 19% 18% 24% nces. 20% >30 32% $115,624 $133,968 $148,592 33% $174,777 $198,844 $152,786 $184,329 101–250 . “Employee Benefits in the Unite 6,004d States, March 955,9642008.” News rel $45,979,081,708 ease, August 7, 2008a. 24%$48,097 Available at This report is being published simultaneously as an 27% 25% 25% EBRI Issue Brief and ICI Perspective and is avai 24% lable on both 56 . 20s 1,001–5,000 How Am 0 erica 60s23 Saves .8% 201 12% 43.2% 0: 10% 10% 10% 10% 10% 10% A Report on 77.0% 11% 12.1% 9% 9% 9% 9% 9% 9% Vanguar 10% d 7.2% 2009 Defi 12.4% n 11% 12.7% ed Contribution 5.7% 10% Pla 10.6% n Da 9.8% ta 10% . Valley Forg 4.9% 13% e, PA: The stock, including 4 Age Group 8 percent who held no >0–50 percent ne (Figure 33). On the >50–90 percent other hand, about 5 perc>90 percent ent had more than 80 perce 22 nt 50s partici 200 Choi, James J. low-to 60. 9 (Figur p -moder 5% ants or b 35. es 6 ate salary gro 8% those , David Laibso and 7). 11.with 3% Bec lo 29. unger a n, Bri ps use 2% (Fi ten youn g gitte ure 18). However, 19. ures s C. ger 8% Madrian, participants’ ac howed more 9. an 4% d at hig Andre mo count des h salary w 6. t gro Metr 6% balanc w le ic t11. h ( k. “Def e vels the s9% tended Figure 5. ine ratio t A1 9% d C to 30s 30s 0)be o . For e 5. ntributio nds to 0% small (Fi exam declin 6.n 7% ple, P gur ensions: Plan e 6), contributio the e somew 4 410. avera 4% hg at. e a R 6.5% ules, A ccount ns 5.1% consistent par $67,420 $67,420 balanced funds; and company t the he s s 20% ec ecu ur riit ty y> > t iin n icipants 30 30 $67,282 $67,282 di dic cat ated. ed. 27% in the EBRI/ICI 40 4 41. 1. 1(k 3% 3% ) database over the 1 12. 2.6% 6% six-year period 33 33 fro . .1% 1% m 2003 to 2009 13 13(w .0 .0% % hich included one contributions d Plan-specific information on loan provisio uring 2008 (se $66,734 $66,734 e Holden, 2010). Utkus and Young, 9% 9% 9% 9% 9% 9%ns is available for the majority of the pl 8% 8% 8% 8% 8% 8% 18%2010, reported that 13 percent of DC plan participants ans in the sample (including virtually all of measured b Longer-tenured participants are used in this analysis to capture as long a work and savings history as possible. The tenure v y the number of particip The Em ants in th ploye p ee Benefi lan). N t Research Institut inety-four percent of pla e24% 24% (EBRI) was founded in 1978. Its ns with Barclays Capital U.S. Barclays Capital U.S. more than ariable tends to be years 10,000 mipartici ssion is to pants held at Anal the a Figure 6, Avera gy e sis of the 1999–2009 Consistent Group least s composition has o ge Account Balances Among 4 me of $60,144 $60,144 their 31% go atten signific ccounts in 23.2% bon antly olde d 01(k) Participants Present From Year-End 2003 Through funds r com at yea Size of p are Account r-en d with d 200 Balance the 9 w cross-sectional hen they had held snapshots o no bond Year-End 2009, f f partici unds at pants. year-e Th nd e Figure 43, Percentage of 401( less than $1 >10–20 0,000 were in thk) Plans eir 20s or 15% Offeri 30sng Loans, by (Fig14% ure 11). Plan Similarly, 5 16% Si 7% 7% 7% 7% 7% 7% ze, 2009 9 per 13% ...................................................... cent of partici 13% pants with 17% account balanc 16% ..................... 7% 7% 7% 7% 7% 7%es 44 of rollover assets among the p stock as an i and Short, 2010. years of tenure nv,estment opti the average a on in ccount balance increased 26 p articipants 2009. with account balan Thus, to analyzF F e iithe gur gur cercen es greater tha e 3 e 3 pot with the consolidati tentia 1 1 l effect n $100,000, of plan si o as n of their multipl ze, th 1 percent of them had two or fewer e remaine accounts. Among ing panels of Figure 60s Al All l $100,344 $62,695 $62,69584.5% $115,145 $126,536 8.2%$145,818 $161,576 7.3% $118,283 $144,004 ww w.bls.gov 30s >5,000 . “Can /news.rel 401(k)ease Accumulatio /archives/e 20% 39.0% ns Gen bs2 22_08 .7 e% rate Si 19% 8.1% 07200 gnificant 8.pdf 18% 6.6% Income for 20% 10.5% Future Retirees?” 4.3% 20% Inve 15.0% 16% stment Compa 20% 12.9% 23% ny Institute Vang 251–500 uard Group, Vanguard Center 2,832 for Retirement 998,267 Research, 2 40 009. $47,263,774,919 Available at $47,346 6% 6% 6% 6% 6% 6% organiz EBRI/ICI 401(k) Database ations’ websites with the current employer rather than years of participation in the 401(k) plan. Particularly among older participants, job 20s at www.ebri.org/publicatio 20.4% ns/ib and www.ici.o 13.3% rg/research/perspective Aggregate Bond Aggregate Bond tenure may not reflect length 66.3% Index Index 60s 50. 140 1400% 30. 0 0 9% 12.1% 24.8% 15.6% 9.2% 8.7% 13.2% 7.8% 6.0% 13.3% 17.2% 60s 5.7% 5% 5% 5% 5% 5% 5% 5.2% Participa stock $60,000 $60,000 nt Decisions, and the Path 35.9% of Least Resistance. 9.9% ” NB 4.4% ER Working Pape 14.7%r, no. 10.0% 8655. Cam 5% 5% 5% 5% 5% 5% bridge, MA: National 4% 19.7% of the46 ir acco 0% unt balances invested in company stock. balanc of the worst similar patt produce of par ed sign ern Sa Sa bear markets llia a t occurs among ficipants icant r ry y account in th fo eir 60s i r stocks since bala partici nce contribute to n p gro creas ants win th e th. In the d 46. , to encourag eir Great 2 contrast 60s percent (a Depression), th (Fig , th ure 19). e, an e average account balan 3.d to enhanc 9 perc e s ent an tudy fo e the developmen nual un av d: erage gro ce of t of sound empl older par wth rate) bet ticipants oy wee ben een or th year- e ose fit traded in their by Participan >20–30 retirement accounts in 2009, t Age and Tenure ................................................................................................. 11% analyzing 10% the plan 11% s administer 9% ed by Vangu 8% ard. Analyzing a 12%.................................. year earlier, Th 11% e 12 the small plans included a loan ). Some plans without this in provision, >5–10 compared w $24,715ith formation are classified as 35 percent $35,016 of plans wi $45,010th 10 or having a loan provi $58,024 fewer partic $70,230 ipants. sion if any part There is modest $47,817 icipant in the plan 4% 4% 4% 4% 4% 4% 4% 4% 4% 4% 4% 4%variati $71,527on has in 200 results from t 8. Conversely, 4. $20, $20, of participation in the 401(k) plans; the regulations for the 401(k) plans were introduced about 28 years ago. 000 000 he 21199 .3% 9–5 20 perce 09 consistent nt of partic gr ipa oup ar nts hel e prese d no bo nted in nd fun the ds at y appen ear-en dix of d this 2009 report. when t hey had held bond funds at greater Asset Asset 40s than All A A $ llll100, o ocat cat 00 iio o 0 w n n D D ere iist st in th r riib b 22% u u 40.6% eir t tiio o50s or n n o of f 401 401 60s. 21% 9.5% ( (k k) )The Pa Pa posi r rt tiic cii20% tive correl p p 7.2% an ant t A Acco cco atio u u 22% 11.4% n n n b t t B B etwe a allan an en ce ce 5.3% ag 22% t to o e an B Bal al d acco an an12.6% ced ced unt 22% F F bala u un nd dnce s, s, b b 9.2% is e 26% y y A A xg g pecte e e d 25 grou Perspectiv p planse by inv 8, no. es 3, an tment optio d EBRI Issue ns andBrie plafn s , no. 251 ize. (November 2002). Available at w 40s ww.ici.org/pdf/per08-03.pdf years of tenure Particip participants in their 50s or 60s with more than 30 ye ants’ Ag , and 4 percent 30s es, Tenures, and Acco of them had b 27.8% unt etween two and five years of Balances in the 1999 ars of tenure, the ave 13.9% r–2009 C tenure (see Figure 12). age account b onsistent Group alance increase 58.3% d 4 percent with the AllFigure 44, Percentage of Eligible 401(k) Plan 21 64. https://institut 501–1,000 8% 38.2% ional.vanguar 9.1% 31.7%d.com/ 22. 1,839 6% iam Partic /pdf/HAS.pdf?c ipants With 401(k) Plan 9.1,303,936 1% bdForceDoma 5.7% $63,301,430,136 10.Lo 4% in=true ans, by Pla 4.9% n4. Size, 2009 3% 4.6% ................................... $48,546 7.5% 8.6% 44 5.2% Who we are 2006 Equity, bond, money, and/or Bureau of$ $ Eco 20 20, ,000 000 nomic R – –$ $40 40,0 ,0 e00 00 search, December 5 51. 1.4% 4% 2001. 9. 9.2% 2% 28 28. .7% 7% 10 10.6 .6% % 10% programs and so c und public policy through objective resear Shar ch and e of Pa educati rticipant' on. EBR s Accoun I is the only t Account balan Source: Tabulations ces are net o <100 participants <100 participants from EBRI/ICI f unpaid lo Participant- an bal 100–500 100–500 Direca ted nces. Retir ement Plan Data 501–1,000 501–1,000 Collection Project. 1,001–5,000 1,001–5,000 >5,000 >5,000 >30 >10–20 $55,734 7% $68,281 8% 10% $79,374 8% 18% $95,303 7% $109,103 9% $71,684 9% $100,363 end 19 with longer t 99 and enures sho year-end w 20 ed 09more modest growth . Investment returns, rath (Figur ee 7 r than a ). For exa nnualm cple, ontributio the aver ns, generally age account accou 13% balance nt for of parti most of 1% cipants the Plans Without Company Stock, GICs 50s 17% /Stable-Value Funds 17% 12% 17% 7% 19% 19% 19% 22% an o Vang Sources and T 120 120 uuard Grou tstanding lo p 2009 reported that “despite the substantial an balance. ype of Data This may understate the number o market f plans offering loans (or part volatility of 2008, only 16 [percent] of participants made a, a,b b icipants eligible for loans) 50s participant a loan activity 9%by plan size, ranging from 17 percent of participants 9% with loans outstanding in 401(k) plans year-en Figure 7, Percent Change i and d . ww 2008. On n National w.ebri. 40s Co org/ et, th mpensation pdf ne / A bperc v rie erage A fse pdf ntage Su /1 dccount rvey: Employ 10 of 2ib. 28.8% partici Balances Among 401(k) Parti pdf pants h ee Bene oldin fits i g no n Private I bo 13.9% nd f cipants unds ndust incr ry in t Presen eas hed to t e Un From Year ite 57.4% 66. d Stat 5 pe -Ercent at es, Marc nd 2003 Thro year h 2008. -end ugh because youn The EBRI/ICI ger $ $40 40workers ar ,0 ,000 00 401( – –k$ $ ) 60 60 databas ,0 ,0e like 00 00 e at yly to ear-end 2009 hav 40 40.1 .1 e low r% % epres 11% e ents r incom 20.7 million es and to 1 1 401( 1 1. .0 0 k)% % plan par hav tic ei ha pantsd l ; the median ess tim 3 35 5.7 .7% % ac e to acc count balanc umula e in the databas te a 1 13. 3.1% 1% bala e was nce with their consobalanced funds, company stock; lidatio 1,001–2,500 n of their multiple acco > > Age Group unts. P P Future jo 1,394 er er >c c 0–50 per ent entage age int research cent of of 2,182,496 401(k 401(kwith this new feature will explore the longit ) ) P P>art art 50–90 per iic ciipant pant $112,210,922,205 cent s s,, 2009 2009 Ba> la 90 per nce He cent ld in $51,414 Com udinal aspects pany of this 35 ? After rising in 2003 a 9% nd for the n privat ext e, nonprof four consecutive y it, nonpartisan ears , Washington, DC-b , the average 4ased organi 01(k) retire zat me ion com nt ac 13% m co itted exclusivel unt fell 27.8 pe y to r- PLANS WITHOUT 20% COMPANY >20–30 STOCK, GI $122,455 Cs, OR OTHE $140,700 R STABLE-VA $154,882 LUE FUNDS $178,266 $196,658 $142,913 $171,744 Asset Allocation of Recently Hired Participants Figure 45, Loan Balances as About 16 percent, or 1.6 million, of the 401(k a Percentage of 401(k) Account Balances for Participants ) participants Figure 22 with accounts at the end With 401(k) Plan of 1999 in the d Loans, by Pla atabase hand Because 401(k 60s 1998 ) plans were introduced about 29 years 1999 2000 9% 2001 9% 2002 2003 ago, older and longer-tenured employees would 9% 2004 10% 2005 2006 10% 2007 2008 11% not have 2009 12% 22 1–100 Ac $17,794 at y count Siz ear e -end 2009. 45.2% 16.3% 7.2% 15.4% 11.7% Compariso $40,000 $40,000 n of Consistent Group of 401(k) Participants to EBRI/ICI 401(k) Database change i in their 60s n acc inco creased unts wit43. h lar 5 percent (a 6.2 ger balances. In additio percent annu n, paal rticipants average gro in thw eir 6 th rat 0s te e) bet nd to ween have year a hi St -en ogh ckder 2003 a propensity to nd year-en make d one or more portfolio trades or exchanges du Distributio Washin Year-En gton, d 2009, n of Equity DC: U.S. > >$ $60 60 50s ,0 ,0 00 00 20s by Part – – De $ $80 80 pa ,0 ,0 icipa Fund Allocations and Participant Exposure to Equities rtment of 00 00 nt Age an Labor, Bureau o 32 32 28.7% d .4 .4 40.1% ring the ye Te % % nure ........................................................................................................ ar.” f Labor Statistic Hewitt Associates, 2010, found that 16.2 pe 1 11 1. .5 5% % 13.7% 13.7% s, 2008b.4 4 Avai 1 1.4 .4% % lable46.2% at 57.6% 1 14. 4. rcent of participants 7% 7% 11 because some with 26 See Figures A –100 pplans may articipants 6 and A7 in hav to 23 perc the e offered, but no participant had take appendix, which compare ent of participants in the age and 401(k)n ou plans tenu t, a plan loan. It is likely that this omission is s with re composition of the 1999–20 more than 5,000 participants (Fi 09 group to the gure 44). mall, a s 2009. Between year-end 2008 and year c c c c c c-end 2009, on net, the percentage of participants allocating 100 percent of their Several Year-End 2009 Snapshot of 401(k) Asset Allocation current employer. In recor b dkeepiLes n>30 g o additio s Than $10,000 rgannizations , they $160,083 public are les provided r poli s likely to c$176,702 y r ee cords o search hav >$40,000–$50,000 n and e rollo ac $187,193 tive partici eduvers cation on from p $209,625 ants in a econ previous om401(k ic securi $227,070 employer ) pla ty Mor nae s at year-end 2009. nd em Than $100,000 ’s pl $175,890 plo an in yee thei benefi r curr $197,472 t is Th ent suese es. plan Congressional and GICs 2,501–5,000 $10, $10,000 000 Budget and/or other stable- Office. CBO’s Lon 640 g-Term Projectio 2,234,030 ns for Soci 61 al S $122,068,002,953 ecurity: Additional Informatio $54,640 n. Washington, DC: 20s consolidati Distributio 77. 100 100 Size, 2009 ce8% nt in 0% oT 20 n i 40. he 2003–2009 n of Plans, Participants, and Assets b n 6% ............................................................................................................................... 08 Cons more detail. , b istent G e 7. fo 8% cre ons roup in 1999 ri istent gr si 40. ng 8% oup 31 r.9 epr p EBRI/ICI 401( es 35. ents erce 3% the 4.3 million nt in k) Databas 200 5. 401( 95% .e in k) plan 1999pary tic Plan 7. ipants Cons 7% with ac istent G Size 10.c9% rount balanc oup in 2009 4.9% es at the end of c, c, c, c, c, c, 4. EBRI/ICI 401( d d d d d d9% each y k)ea Databas .................................. r from 2003 e in 2009 through 45 1–100 101–250 251–500 501–1,000 1,001–2,500 29% 29% 2,501–5,000 5,001–10,000 >10,000 All Plans Comparing snapshots of newly hired 401(k) plan participants’ asset allocations provides further insight into the recent accounts at t Ag Age e Tenure (years) 101–500 <$10,000 62 he en Distri d o bfu each tion o year from f 401(k) Pl 46.8% 39% P Per er 1999 throu c c an e ent nt s, ag ag 15.5% Parti e of e of 39% A A g ch c c ip c c 2009. an ou ount nt ts, 6.3% 37% B B an a a T llan an dhese Assets, c ce e In Inv v 1.6 e e 35% 17.4% s s t ted ed million by iin B n B Investmen al al40 a a10.0% nc nc 36% 1(k ed ed) F Fpartici tu u O nd ndp s stip 39% oants m ns, 2009 ake u 39% p a group of > >$ $80 80,0 ,000 00 30s – –$ $1 100, 00,0 000 00 2 26. 6.6% 6% 47.7% 1 11. 1.6% 6% 12.8% 46 46. .3% 3% 39.5% 15 15.5 .5% % participated in 401(k) plans for their enti E E E E E Equity quity quity quity quity quity F F F F F Funds unds unds unds unds unds Consistent Group in 2003 C C C C C Company ompany ompany ompany ompany ompany S S S S S St t t t t toc oc oc oc oc oc EBRI/ICI 401( k k k k k kre careers. The Re B B B B B Balanc alanc alanc alanc alanc alanc k) Databas ed ed ed ed ed ed F F F F F Fe in unds unds unds unds unds unds 2003 venue Act of 1 3 3 B B B B B B Cons ond F ond F ond F ond F ond F ond F istent G 978 cont unds unds unds unds unds unds roup in 2009 ained G G G G G GI I I I I IC C C C C Cs s s s s sa provision that became Inter EBRI/ICI 401( and and and and and and O O O O O Ot t t t t ther her her her her her k) Databas Money Money Money Money Money Money e in 2009 F F F F F Funds unds unds unds unds undsnal Table of Contents a Source: Tabulations from 60s EBRI/ICI Participant-Directed Retirem 29.4% ent Plan Data Collection Project. 13.3% 57.3% withdr ww 200w.bls.gov 9. Inv awals. . “401 e 2009; the median stment ret /ncs/ebs (k) Plan u /ac be rns, ra Asset Allocati count balanc nefits/20 ther tha e among 08/own n on, Account a the c ne n ons rship/private ual contr istent gr B oup alances, a ibutio was/t $59,381 able ns, gen 02a. n at y d Loan Activity i ear epdf rally -end 2009. account fo n 20 r mo 02.st of th ” Investment Com e change in acco pany Institute unts with EBRI’s membership includes a cross-section of pension funds; businesses; trade associations; traded in their About year-end cross-sectional EBRI U.S. Government Accountability Office, 1997 f All 3 in 1Participants Participants 0,accounts in 20 or 4.3 million, 09, and 19.7 p /ICI 401(k) database. of the 401(k) ercent changed partici ound that more than 95 pants wi th th accounts e asset allocation of their co percent of 401(k) at the end of 2 plans that offer l 0ntributions. Hewitt Associates, 03 in the EBRI o/ICI ans had at lea 401(k) st one 30s Loan ratios va 77. value funds 9% 46.ry only sli 4% 0–2 8.All 4%ghtly 32. wh 1%en $60,144 >2–5 partici 26. 36.6% 8%pants are Russell 2000 Index Russell 2000 Index $72,173 6.8% 5.>5–10 Size of grou 3% pe Account $82,768 d bas 7. 6.9% 2% Balance ed o >10–20 n 12. the s $99,644 9% iz7.1% e of 4.8% the $115,257 >20–30 5. ir 2.3% 6% 401(k) plan $83,161 20.7% s (a >30 s measu $109,723 r15.7% ed by Figu account re 8, Domestic S Congressional 5,001–10,000 balance to Budget O bon tock dan fun d Bon ffic ds e ed ,dge October Mad rkup et Inde 327 fr 2om 2.9 01 xes .............................................................................. 0. Availabl 16. p 72,268,966 % ercen e at t to 3. ww0 w.cbo.gov perce $150,408,723,529 nt of /ftpdocs participa /11 nts 9x. x/doc1 >90% 19$66,290 43 ............................. /10-22- 14 plan The accounts. year- recoren c dke Nd ote: Average and epers 2009 EB inclu RI/ICI median de mutual 401(k) loan 401(k)fun am data ounts are d cb oampanies, ca se shows tha lculated among participants insurance t, on av w compa ith 401(k) erage, loans. nies, an 41 percent d consulting fi of participant rms. Al ac c c c c c c though count balanc the EB eRI/ICI s were 0–2 40s 13.5 6% 46.0% 5% Size of 4% Account 13.1% Balance 5% 7% 40.9% 6% 9% 10 As tends to oc 501–1,000 T$10,000–$20,000 he 1999–2009 > >cur when the $ $10 100, 0,00 00 c0 0 onsistent stock market group r 47.2% epr 32% esents22 22 the 1.6 million 11 r . ..6 9 9 ises in valu % % 14.5% 32%401(ke, t ) plan h6.6% 31% e par 12 12 perce tic.4 .4 ipants % % n with ac tage 29% 18.5% c of ount balanc 401(k 4 4es 8.1 8.1 )9.3% 30% ass at the end of eac % % ets investe 33% h yead i r fr1 1 om 1999 thr n 6. 6. equities rose i 6% 6%31% ough n G Gr ro oup up Z Zer ero o 1– 1–10% 10% 11 11 12 –2 –2 .9 0% 0% 21– 21–30 30% % 3 31– 1–40 40% % 4 41– 1–50 50% % 5 51–6 1–60% 0% S S S S S S61 61 t t t t t table- able- able- able- able- able- –7 –70% 0% V V V V V Val al al al al alue ue ue ue ue ue 71 71 F F F F F F–8 –8 unds unds unds unds unds unds 0% 0% 81 81–90 –90% % 91 91–1 –100 00% % Figure 46, Few 401(k) Participants Had Outst Endnotes The investment a 2009 EBR llocation activit I/ICI All401(k) database co y of plan part ntai i25.9% cns informat ipants. B anding 401(k) alan ion ced Loans; Loans on fun 51,8 ds, w 5 13.6% 2 4 hi0 Tend c1 h inc (k) plans ed to be lude tar wit Small, gh et-date $1 1996–2009 .21 60.5% fu 0 tr nds illio,n in have .......................... assets an increas 27 ed d 2in 0. .7 45 consistent participants (or a longitudinal sample), which removes the effect of participants and plans entering and Revenue Code This system of Perspectiv 80 80 Source: Tabulations Sec. 401(k). The law went into effect on Janu e classification d 9, no. 5, an from EBRI/ICI d EB oes not consid RI Issue Par labor un ticipant- c Dir ions; h Brie ected er the number f,Retir eno. 261 alth ement Plan care prov (Se 15 Data ary 1, 1980, bu of distinct investment options .9% piders and insur te Collec mber tion Pr 2003 oject it was not until November 1981 that proposed t. e 23 ). Available rs; government org at presented to a www.ici.or anizations; g/ and service firms. pd given participa f/per09-05.p n df t, Year Salary Range s of Tenure In ? trodu Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. The $20,000 $20,000 ction avera Inv .................................................................................................................. (percentage of (percentage of esg tm e ent Opti 401(k ons ) account Offer Participants) Participants) ed by balanc Plan e moved u Investment Category Investment Investment Category Investment Category Investment Category Investment Category p and do Plans wCategory n with stock Par market p ticipants erfor ................................................... 5 mance, As but ov sets er the entire six- 40s larger 74. ba 0%lances. In a 46.6% 9.dditio 9% n 29. , partici 8% pants i 23.7%n their Number of 60s te Num 6.2% bern Part of d Par to have a icipant ticipant 8. s in 3% s in Plan hi Plan 14. gher 2% propen 6.0% sity to make wit 6.4% hdrawals. 2009a, reported that 19.6 per Plans Without Company Stock, GICs, SocialSec 2009; the median urity_chartbook. 50s account balanc cent of participants made a pdf e among or Other Stable-Value Funds the cons 43.3% istent group was ss $73,175 et transfers in t at year13.3% -end 2009. heir account balances during 2 43.4% 008, which was “up databas the n plan participant with an outstanding loan. u>10,000 >2–5 mber of pla e had accounts n partici at t ph ae en nts). Amon 15% d of each 331 g participants year from 14% 9,737,755 2 in 00plan 12% 3 throu s with gh 100 or fewer 2$615,491,992,885 014% 09. These 4.3 parti 15% cipants, th million 40 15% 1(k e lo $63,207 )an ratio particip was ants 17% 18 per- make 23 1001–5,000 >$20,000–$30,000 S So o u ur rc ce: e: T Ta abulat bulatio ions ns f fr ro om m E E48.2% B B R R28% I I/ /I IC CI I P Part artic icipan ipan 14.0% 28% t t- -D Di irec rect ted R ed Ret eti i7.3% 28% r rem ement ent P P l la an D n Dat at 25% 17.9% a C a Co ol ll lec ect ti io o n P n P8.2% 26% r ro o j jec ect t. . 29% 27% project has allocated to e a Note: col T q he EBRI/ICI luity ected dat fund 401( s a fro (Fi k) databas gm ure 19 2 e c96 1 ontains ). throu How 10.3 e g million ver, in h 20 401( 09, t divi k) plan h dua e par universe l asset allocat ticipants at y oear f da -end 1999 and 20.7 ta provi ions varied w ders v million iaries from dely across participants. at year-end yea 2009.r to year. In For addition, Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. Figu 2009. At y re 9, SSour n ear- apsh $0 $0 ce: Tabulations end ot of Ye 2009, ar-E fr 4 om 1n EBRI/ICI perce d Accou Par nt of tn ict ipant- Balan 40 D1 ir( ec k) pla cted es ............................................................................... Retir n ement Plan participData ants’ Collec account tion Projec bala t. nces was invested in e ............................... quity funds, on 16 The value of t 20 20s s Dec- Dec- Jun- Jun- 3 39. 9. Dec- Dec- 5% 5% his percentage Jun- Jun- 4. 4. Dec- Dec- 4 4% %Jun- Jun-is lower Dec- Dec- 3. 3.9% 9% Jun- Jun-than it would have be Dec- Dec-3. 3. Jun- Jun- 5% 5% Dec- Dec- Jun- Jun- 2 2. .2% 2% Dec- Dec-en if it were Jun- Jun- 2 2. .2% 2% Dec- Dec- 14.6% Jun- Jun-merely reflecting employee turnover and 3 3 Dec- Dec- . .1 1% %Jun- Jun- Dec- Dec- 1. 1.7 7% % Jun- Jun- Dec- Dec-1. 1.Jun- Jun- 7 7% % Dec- Dec- Jun- Jun- 1. 1.6% 6% Dec- Dec- Jun- Jun- 36 36. .Dec- Dec- 1% 1% Jun- Jun- popul The analysis is based on a sample of 4.3 million participants with account balances at the end of each year from 2003 through arity Note: Components am % ong 401(k 12.4 may ) pa not rticipants. Rec add to 100 percent bec ently ause of r hired ounding. participants in 2009 tended to be more 2009. > lik 50-ely 90% to hold balanced million leaving th and partici . ww 15 e National Co da w.e ptabase. In ants (Figure bri.org/ mpensation S pdf itiall / 1 by, this gro rie ). Most of fspdf u /0 rvey: Empl 90 the up 3ib. was demogra plans i pdf oy nee B the e p database ar ne hical fits i ly similar n Private I e s to the e mall: 4 ndust 4 n ry in t perc tire e EBRI/ICI n ht of e Un the ite 4 d pla Stat 0 c1n (k) database s have es, Marc 25h 2 or at 009 fe year- wer . These chan Equi gety s in , bond, m partici 60s oney pan , and/or t account balanc bal ed funds ances also r 39.5% efle27,879 ct changes i 12.6% n asset values 6,276,906 during the 47.9% $298,127,169,373 10-year time period 50s Figure 47, Percentage of Eligible Partic but rather the t regulations were issued (see Holden, Brady, 70. 3% Sour Sour 41. cc 4% e: y e: Tabulations pes of options presented. Pre Tabulations 11.3% fr fr om EBRI/ICI om 29. EBRI/ICI 9% 401( Par23. tk ipants With 401(k) Loans, by Participant Ag ic ) Par ipant- 1% tic D and Hadley, 200 ipant- irlec iminary rese ted DirRetir ected 6. ement Plan 8% Retirement Plan Data arch analy 6; Employee Benefit Resear Data 10. Collec 0% zing 1. Collec tion Pr 17. tojec ion 6% 4 million participants drawn fr Pr t. ojec 6. e, Ten t.5% u ch Institute, 200 8. re, Account Size, or Salary, 3% 5; and U.S. Int om the 2000 ernal Age Group year time Note: The cons Per peri is centages tent gr od inc oup c do not add to 100 per reased a onsists of 1.6 million t an av cent bec 401( erage a kaus ) plan par e of r nnual ounding. ticipants gro Jwith ac ob w tenur th count balanc e rate of is generally 1 es 0 y at ear .5 the end s percent, workof ing at c each y ur attaini ear rent employ from 1999 ng er$1 , th and r09,7 ough 2009. thus2 may 3 a ov t year-end 2 erstate 009. In sum, th EBRI/ICI 401(k >5–10 Note: e E N No oB t tT) e: e: RI/ICI he EBRI/ICI Datab R Ro ow w per per 4 ase c c0 401( ent ent 1 ...................................................................................................... ( ag ag k k)) databas es es database m m24% ay ay no no e contains t t add t add t do 15.0 o oes not cont 1 1 Percentage of Account Balance Invested in Target-date Funds 00 pe 00 pe 23% million rc rcent ent 401( b bk ec ec )ain plan aus aus informat 21% e o e o partic f f ro ro ipants unding. unding. iat y on o " " ear E E-22% q q n end 2003 and 20.7 uit uit part y y f funds unds icipa ” ” inc inc nl lt t ud ud 23% million e m e m ransaction acti ut utat y u ual al ear f f........................................... 5 unds unds -end, ,23% 2009. ban banvity but k k c co o llec llect ti iv v can e e 25% be used There is a b 96 96 Sour >5,000 lso a c>$30,000–$40,000 97 97 e: Tabulations positive correlation between account 97 97 98 98 from 98 98EBRI/ICI 99 99 Par 99 99 50.4% ticipant- 23% 00 00 Dir 00 00 ected 01 01 Retir 9.4% 24% ement Plan 01 01 bala 02 02 Data 02 02 n7.0% 25% ce an Collec 03 03 d t tion Pr 03 03enur ojec 04 04 22% 20.8% e t. among 04 04 05 05 partici 6.4% 05 05 23% 06 06pan 06 06 ts represented by t 26% 07 07 07 07 08 08 25% 08 08 h 09 09 e 2009 09 09 10 10 up a only marginally gro Allup of 100 100 consistent par ” from 2007 (although, they te ticipants (or 51,852 a longitu nded to move larg d20,743,731 inal sample er portions of their account ba ), which $1,210,414,818,938 removes the effectlances). Fid of partici $58,351 pelity Investmen ants and planst s, 57 cent of the remaining assets in 2009, a while in plans with more than 10,000 participants, the loan ratio was 15 percent Age and tenure groups are based on participant age and tenure at year-end 2009. Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. the sampl exampl 1 e, a e Note: Note: b oofu T plans at At y t 4 he tear 5 enur perce -end 2009, e v any ariable nt the av given is of pa gener erage ac rticipants hel ally provider year count balanc s workcan cha ing at c d e among no e urrent nge. T all q employ uit 20.7 million y fun hus, aggre er, and thus d401( s, w k may )hile par g ov at tic er e fi i15 ants state gur was perc year $58,351; eent o s in s of par thi f tic the median partici is pation report in the pac ants h cge 401( ount ner kbalanc ) plan. eally shoul ld more t e was $17,794. d h not an 80 be per- 100% 100% 100% 100% 100% y Components ear Sour s of par ce: Tabulations tic may ipation Al not add to 100 per l in the 401( from EBRI/ICI k) plan. cent bec Participant- ause of r D 43.9% irec ounding. ted Retirement Plan Data Collec 13.3% tion Project. 42.8% average, Washin retirement. The EBRI/ICI 401(k) database h The percenta 30 30s s gton, com 4 4DC: U.S. 6. 6. p Of w g ared with 37 percent 4% 4% e of 401(k) participants with 401(k) loans outs 1996 1996 hich: tar De 6. 6.8 8 1997 1997 pa % % get- rtment of date funds 1998 1998 5. 5.8% 8%at Labor, Bureau o an opti 1999 1999 yea a 5. 5. r-en s added d o1% 1% n2000 2000 d 2008, 48 2001 2001 3 3 a. .ta 1% 1% f Labor Statistic provider percent 2002 2002 tanding acros 40s 40s 2 2. .6% 6% s since 2003, and, by 2003 2003 at y se , 200 ar-end 2007, 2 22004 2004 . .s all participants both with and without 401(k) 7 7% % 9. Avail 2005 2005 1. 1.able 7 7% % and definition 2006 2006 at40 1. 1.percent at year-end 2002 2007 2007 7 7, participants in thes % % 2008 2008 1. 1.5% 5% 2009 200922 22. .e plans 7% 7% 60s Figure 10, Distribution of 401(k) Account 59.4% The 37. cons 5% istent gr 11.oup c 8% ons 27. ists4% of 4.3 million 19.4% 401( Balk a)nces, by Size plan partic 8. ipants 0% with ac 21,466 of Account count balanc 13.5% Bal es 21. a at nce ................................................ 1% the end 4,690,890 12. of eac 2%h year 10. fr 5% om 2003 $216,951,883,385 through 2009. ................... 17 funds partici For data on 401(k) plan asset S20s e compar p lected ants, a Note: t tT r rhe tenur u u Years ................................................................................................................ s sed n ts tsd , , l lwith i i30 percent f fe v e e i in n ar su su rec iable r ra an ne is c ce e nt gener se se hires have 26 to p ps, participants, a a ally r ra at t y e eear a a in t EBRI’s work advances knowledge and unders cco cco s 44.3% wor h u ue n n k100 participants. In co t ting at c past. Sixty s, s, a an nand plans t d dur a arn n ent y y 27.5% p pemploy o oo o- l le eone d d i i er h n n, ve ve rough 2007, see pe and stm stm rc thus e eent o n n t tntrast, o may 7.3% p pr ro o ov d dfu u r er c ce s t p t p tcently h ate y r rnly 5 perc i im m U.S. Department ear a ar ri il ls y y11.4% i i of n nive ve re par tanding of emplo s sd tic t tent e eiparticipants pation d d i in n of the plans h sto sto 6.0% in the cks. cks. of Labor, Employee Benefits .......................................... 401( in k)y plan. ee benefits and their 200 ave more than 9 held balanced 1,000 46 These end (Fig 19 ure 8). A chan >10–20 99. Ho ge ltwever, s in hough partici by y asset allocation vari pe an art account -en 27% d 200 bal 9, ted with h aese part nces also r 26% ag icipa e a efl n n e d ts c26% t ma had chang ny part gro es in wicipants hel n 26% older asset values (Figure d a ra 26% during A6), a nge of ccrue the six-year time perio invest d l 26% om nger ents, the job te 29% im nures pact of d Deloitte EBRI/ICI 401(k Revenue Service, Consu >$40,000–$50,000 ) lting LLP, Inte database sug 1981). gests that the rnational 22% Founsheer number dation, 21% and th of in e Inte 22% vestment rnationa 20% options presented does not influence participants. l Society of 21% Certified Employee B 24% e 22% nefit All Age Group 48.4% >0–50 percent 13.2% 7.0%>50–90 percent 18.6% 8.5% >90 percent Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. $0 $0 to analyze the year-end asset allocat Sources and Type of Data ...................................................................................................... ions of the consistent group of participants with accounts at ....................................... 5 year-end 2008 and 2008, reported that overall only 6.6 percen database. A participant Changes in All-or-Nothing Changes in All-or-Nothing Changes in All-or-Nothing Changes in All-or-Nothing Changes in All-or-Nothing ’s tenure with an employer serv t of participants in their recordkeeping 401(k) Plan 401(k) Plan 401(k) Plan 401(k) Plan 401(k) Plan es as Participant Participant Participant Participant Participant a proxy for the len system gth of time a made exchang worker has partici es during Sep ptember, ated in enterin (Figure 4 g and l 5). eaving the database. This group is similar with respect to age and tenure composition to the 41 entire 8.4 used to cent of the estim ir ba ate time lances in tren eqds, unless othe uity funds (Figr ur we ise i s 26 a ndicat nd e 2d. Re 7). Fu cor rthe ds w rmore ere, enc the pe rypte rcd enpr taior to i ge of p na clusion rticipa in t nts h ho e ldi data ng no base to All ww ? w.bls.gov 75. The 0% median . “401 Equi 43. T The t he t /ncs/ebs ty 9% , bond, m (k en en(o ure v ure v ) Plan r midpoint, 9.c ar ar 3% /be oney i ia a Asset Allocati ble i ble i nef , and/or 31. s s its/20 g generally enerally 5% hal bal 0 f a importance to 9 y y anc /b e e 25. own on, Account ars ars ove a ed funds 4% w we o o r rrship/private k k n ing at ing at d h , th alf c ce nation’s econo B ur ur6. belo r ralances, a ent ent 1% em em w) 4 /table plo plo 7.y y 5 0 er er 1(k) account 02a. n , , an an 8. d Loan Activity i my 2% d t d tpdf hus hus among policy m m 14. ay ay8% o o ba v vers ers lance t t5. at at nm 7% e y e y 20 akers, ear ear increased at 03. s s o o 6.” f fthe news 7% pa pa In rt rtvestment Com ic icipat ipatio io an media, and n in t n in t average ann he he 4 401 01p ( (k kthe public. It an ) ) plan. plan. y Institute ual (Figur 40 40s s30s e 20, to >20–30 5 50. 0. p 5% 5% panel). A 7. 7.6 6ltogether, % % 25% 6. 6.0% 0% equity 53.9% securities—e 5. 5.26% 4% 4% 16.6% 3 3. .3% 3% quity fu 25% 2 2 nds, t . .6.1% 7% 7% he 24% equity 2 2. .5 5% %13.4% portion 1. 1. 24% 5 5% % of 5.9% bala 1. 1.nced f 5 5% % 25%unds, 1. 1.3% 3% and co 27% 17 17. .5% 5% mpany plan loan acces would not be included in the s was similar in earlier years. For ex consistent group. Moreover, any time a 401( ample, in 2007, 16 pek) plan rcent, and in 2 sponsor changed ser 006, 15 percen vice providers, all t. funds, 60 60 compar % % >$50,000–$60,000 ed with 60 percent of 19% recently hire 19% d particip20% ants in 2 2007 008 18% , 53 percent 19% of recent hi 21% res in 2007, 21% 33 percent Security Admin partici (Figur Specia e A7 p Note: The median account balance at year-end 2009 was $17,794. Plans With GICs ants. H ), lists. an io stration, 2010 d acc wever, An 20s nual 40 umulat /Stable-Value Funds partic 1(k eb. For total re d lar ipants a ) Beg nchmarkin er accou nd assets are co tirement assets, including those in 401(k) 17.4% ng Survey 200 t balances co ncen9 mpared w trat Eded ition in . 13.8% larg iNew th te h pla Yo e cross-secti 11rk, NY: .ns. For 2% plan De ex o s, through the loitt ample, n of e partic Consulti 68.8% 79 percent of partici ipan second quarter ng LLP, 20 ts in the enti 09. re p of ants Figure 48, 401(k) Figure 11, Age Composit (Fi stock market performa gure 8). A 80 80 lthough 33Loan Bala asset allocation vari nce ion of showe nces ............................................................................................... Selected d thro 401(k) Account Bal ugh in ed with 40 a 1g (k) ac e and counts ance Catego many part becaus icipants hel ries ...................................................... e 401(k) pla d a ra n partici nge of pants te invest ........................................ m nde ents, the d to be .................. im he pact of avily 47 17 36 On average, participants have b 10.4 distinct options but, on average, choose only 2.5 (Holden and VanDerhei, 2001b). In 6.4 year-end 2009. The ana Asset Asset Asset Asset Asset 2003 2003 Allocation, by Allocation, by Allocation, by Allocation, by Allocation, by lysis suggests that 2004 2004Investment Category, 2008–2009 Investment Category, 2008–2009 Investment Category, 2008–2009 Investment Category, 2008–2009 Investment Category, 2008–2009 there 2005 2005 is no evidence of 2006 2006 a significant2007 2007 shift by a large2008 2008 percentage of2009 2009 theIn 40 vestmen 1(k) pltan Option . Indee s ............................................................................................................ d, 61 percent of participants with account balances of less than $10,0 .......................................... 5 00 had five or fewer years database October, and November 2008, a time of stoc There are two 90% 90% 90% 90% 90% at y and GIC dear-e possible expla sn and/or d 2003. other By year s ntations for able v does this b a -e lue funds nd the 200 k market volatility. Furthermor low account ba y 9, th conducting ese particip and p lances among t ants ublishing policy re had ae, Choi et minimum his grousear al., 2 p: (1) their employer’s 401(k) plan ha tech, analysis, nure 001, found tha of six yand ears an special reports on t 401(k) participants d were slightly s Perspectiv 40s 1999 1999 >30 e 10, n 2000 2000 o. 2, and 2001 2001 13% EBRI Issue 53.7% 2002 2002 Brie 16% f, 12.9% 2003 2003 no. 272 (Au 22,404 15% 2004 2004 gust 6.7% 2002005 2005 4 17% a). Available 4,988,736 15.1% 2006 2006 17% at 6.8% www.ici.or 2007 2007 $250,001,456,068 18% g/pd2008 2008 f/per10 19% -022009 2009 .pdf Age Group >0–50 percent >50–90 percent >90 percent conceal t equity growth What we do funds v he>$60,000–$70,000 rate identity of aried wit of 14. em 7 h a perce pl geoyers and , with nt over the 6 16% 0 em perc 2 ployees, ent of 00317% –20 participants in t but 09 pe we riod re co 18% tode $5 h d s eir 9,3 o 2 81 t 16% 0 hat bot s, 40 at year-e perc h cou 17% nd ent ld 20 be of partici 09. tracke 19% pd ant bys res in th earch 19% eir 40s, and ers over PLANS 50 50 WI s s TH GICs 5 53. 3. AND/ 1% 1% 30s OR OT 7. 7.7 7HE % % R ST5. 5. ABL 8% 8% E-VAL 23.9% U 5. 5.E 4% 4% FUNDS3 3. .4% 4% 2 2. .7% 7% 14.1% 2 2. .5 5% % 1. 1.5 5% % 62.0% 1. 1.4 4% % 1. 1.3% 3% 15 15. .3% 3% stock—represented participants in the plan would be excluded fr Available at www.deloitte.co about 60 percent m/assets/Dco of 401(k om the consis )m- plan partent group. For the year-end 2 ticipants’ assets. 003 EBRI/ICI 401(k) database 58 1–100 43.7% a 1.6% 22.4% b b b b b 7.5% 7.4% 16.9% 2010, see Brady, Holden, and Short, 2010. Fo of rec are in plans wi ent hires in th more than 2002, and 1,000 29 perc partici ent op f ants, and thes recent r a discussion of trends between define hires ine sa 1998 me plans (Figure account for 83 34). At yed be ar-end nefit (DB) and defined contribution perc 20 2 2ent 09, o47 f a p ll plan ercent assets. of rece Bntly ecause stock market performa invested year-end in 10 20 eq % 09 An An uity securiti data n nu ual P al P bas e er rcen cen nce e (F t tes. At year showe Ch Ch igures an ang ge e A3 d in in thro T T -en an o ot ta augh in d d A l Ret l Ret 2009, 8u u). rn rn 4 altog In In 01 d de e (k) ac x x ethe counts r, equity secur because 4 ities—equ 01(k) pla ity f n 9. 3% partici unds, th pants te e equnde ity portion d to be of he avily addition, the preliminary analysis found th Percentage of participan Percentage of participan Percentage of participan Percentage of participan Percentage of participan at 401(k) participts ts ts ts ts ants are not naïve—that is, when given “n” o 24 ptions, they do not In plan-year 2 Of w 007 (latest data available), hich: target-date funds an opti only 1.6 percent of the $3.0 on trillion in 401(k) plan asse S&P 5 S&P 50 00 0 ts were participant loans. In Figure 49, Loan Balances as Figu In the 14 year re 12, Tenu s that the dat re Compositio 20s a Percentage a nbase h of Seemplo lect as been trackin ed 401(k) Accou o yee benef f 401(k) Account Balances for Participan 36.3%its issues; holding educational br g loa nt Ba n 17,197 ac lan tivity amo ce Cate 14.7% gories ................................................... ng 401(k 3,945,915 iefings for EBRI memb )ts With Loans, by P plan part 49.0% icipa $192,078,616,530 nts, there has ers, congressional and articipant Age, 81. 81. 81. 81. 81. ................ been little 1% 1% 1% 1% 1% 18 partici 50s pants a . “Em w 7p ay from loyee Bene their fits in year-end 2008 asset al the Unite 46.6%d Stat 12.7% es, Marc locatih ons. 2010. 47. 47.3 3 7.3% ” News release, July 19.4% 80. 80. 80. 80. 80.0% 0% 0% 0% 0% 27, 9.1% 2010a. Available at rarely made ch of ten About the EBRI/ICI 401(k) Database and Account Size 50 50 u% % re, ww $25, $25, whi w.e 000 000 langes after t eb 79 ri.opercent o rg/pdfh /b erie initial poin f participants fspdf ............................................................................................................................... /080 t of 4ib with enrollment. (For household su 1.pdf account balances greater tha rvey re n $ sults fro 100,000 m late 2009 ref had more than lecting households’ 10 years of ... 6 older only recently been establishe in age >$70,000–$80,000 composition whd (82 percent of all 401(k) en com 16% pared with t 15% he ye-ty ar-end 20 pe plans in exis 16% 09 cros 15% tence in 2007 s-sectional 16% dat were established after 1989 abase. 18% In addition17% , the 2003– 20s 73.4% 34.2% 40s 2008 2008 2008 2008 2008 7.3% 46.4% 27.8%24.6% 18.6% 3.9%13.8% 8.2% 2.9% 1.7% 61.6% 9.1% 7.3% multipl 48 perc eent o years 101–500 60 f .partici Data pants i provid ne their d for 43.8% 6 eac 0s hol h par ding ticipant 7.1% no equ incl ity f ude und 14.5% dat s. e o The f birth per 8.1% c , from entage of whic 4.7% 4 h a 01n ag (k) partici e grou 19.8% pp is ants holdi assigne ng d; no dat equity e of 60 60s s UnitedStat 60 5 59. 9.es/L 0% 0% 63 ocal%2 6. 6.8 8% % 0Assets/Documents 4. 4.7% 7% 4. 4.5% 5% /us_consultin 2 2. .9% 9% g_40 2 2. .5% 5% 1(k)Ann 2 2ua . .2 2% % lBenchm 1. 1.3 3 arkin % % gSurvey 1. 1.2 2% % 2009_ 1. 1. 79. 79. 79. 79. 79. 081 1% 1% 9% 9% 9% 9% 9%409.p 13 13d . .8% 8% f 8.1% update, see Holden and VanDerhei, 2004a a nd 2004b. 77. 77. 77. 77. 77.6% 6% 6% 6% 6% hired 401(k) participants 30s held target-date funds, 40.9% while 17 percent 12.6% held non-target-date f46.5% unds, a 7.9% nd 2 percent 8.0% held both (DC) plans, see Poterba, Venti, and Wis most of the plans have a small number federal agen e, 2007 and Holden, Brady, and Hadley, 2006. of partici cy stp aff, and th ants, thBy By e a e news Te Te sset size nur nur media; e e for many and sponsoring public opinion survey 5.5 EBRI/ICI EBRI/ICI plans is modest. About 19 s on emplo percent of t yee he invested balanc T 80% 80% 80% 80% 80% 60s eed fu nu in re, Accou Equi eq nds, ty uity securiti , bond, m and compa n34 t Size, or oney es. At year , and/or Sn ay stock—repr lary, S balanc -en e 40.3% lect ed funds d ed Ye 2009, esented 59 perc , ars ............................................................................... wh 11.3% ether looking at ent 7.1% of the the 1 200 999–2 3– 24.5% 200 0099 co consistent 11.8% nsistent gro grouup p o or th f........................... 401e e (k) ntire plan 48 divide their ass <$10,000ets among all “n.” Indeed, less than 1 percent 12% 11% 11% of participants followed a “ 12% 76. 76. 76. 76. 76.6% 6% 6% 6% 6% 11% 1/n” asset allocation strategy. Prof 12% 16% it addition, only $604 million flowed out of variation. www.bls.gov Fro/m news 1996 .rel throu ease/gpdf h 20 /e08, o bs2.pn d401(k) plans as the result of converting fa verage, less than one-fifth of 401(k) a loan i particin pto a withdrawal/distribution ants with 77. 77. 77. 77. 77.3% 3% 3% 3% 3% acc 3 3 ess to loans had a >$80,000–$90,000 14% 14% 15% 14% 14% 16% 16% 30s Figu tenure 73. re 13, Accou 5% (Fi 501–1,000 gure 38.8% 12 nt50s ). Balan 8. Examining the interaction of bo 1%ces In 40.crease With 4%43.8% 23.5% Ag 24.4% e an 10.9% d 17. Ten 0% th ur age an e ...................................................................... 10.5% 4. d tenure with 1%13.5% 6. 7.7% 9% account 2.8% 3.7% 2. balanc 3% 62.1% es reveals that, 7. 20.6% 9% 9. ......................... 1% for a given18 sentiment toward and confide TH 200 [tabulations of U.S. Department of La E B Distribution of Plans, Particip 9 co ULK O nsistent gro F 401(K) ASSETS CONTI up’s acconunt balanc ce in 401(k) p ants, and Assets bor Form 5500 data NUE es D TO BE tende lans, see Holden, Sabelha byd Plan to IN be VESTED Size for 2007]), or (2 high .................................................................. e Ir com N STOCKS: p uar s, a ed ) the em nd Reid, 2010.) with On average, at year accou ployee only recently joined the plan Rus Rus nt ba s sel elll 2000 2000 lances I Index ndex -enin d the cross-secti 2009, ............................ 6 60 percent of onal Changes in Asset Allocation Betw een Year-End 2008 and Year-End 2009 40s 40.1% 12.9% 47.0% funds hire, A Allll from also vari whi 5 50. 0. ch a t ed 0% 0% c with 2009 2009 2009 2009 2009 enur ten 6. 6.9 9 e ra % % ure, with nge is assigne 5. 5.5% 5% participants with 4. 4. d; outstan 9% 9% 72. 72. 72. 72. 72.9% 9% 9% 9% 9% 3 3 fiv d . .1% 1% ineg loan or fewer 2 2 bala . .6% 6% years nce; fun of t 2 2. .6 6% % des i nur n th e mor 1. 1.e 5 5% % participant e likel1. 1. y not 5 5% % ’s inv to estment po be 1. 1.4% 4% invested in 20 20 rtf . .1% 1% o lios; The 1999–2009 consistent group’s a benefit issues. ccount balaEBRI’s Ed nces high Med Med light ucation and Re i ian an the accumulation search Fund effec (EBRI-ERF) performs t of ongoing 28401(k) the char particiitpable ation. , 72. 72. 72. 72. 72.4% 4% 4% 4% 4% 24 40 40 $10,000–$20,00 % % and company 0 stock 26% 23% ( (Median T Median T 22% 644enur enure: 6 Year e: 6 Year 26%3,223,670 s s) ) 25% 4.5 $192,188,040,515 26% 28% target-date plans have an assd no ets of $2 n-tar50,0 get-date ba 00 or less, lance an dd another 31 funds (Figur e pe 3rcent 5). All o hafve pla the in n crease i assets n bet bal wanced fu een $250, nd us 001 and $1, e among r 250, ece 00 ntly 0 partic 2 Asset Allocation and Participant Age EBRI/ICI Plans With GICs ipan . “A 4 ts’ assets (Fig 0 >$90,000–$100,000 1pp (k) database, endix: and/or Other Stable-Value Funds Additio ure e A11 qnal uity sec ). Fi Th g 13% ures e asset allo uritie for s—equity the 13% cat EBRI/ICI ion of fund part s, the eq Partic 13% icipants in t ipant-Direct uity portion of 13% he ed Retirement consistent gro ba 13% lanced u P fun p varie la 15% n Data ds, d an with Coll d company st 15% ec participant tion Project ock— Sharing/401k Council of America 2010 indicat 60s 24.8% es that in 2009, the average 13.2%number of investment fund opt 62.0% ions available for 40s Figure 50, Loans From 401(k) (“deemed distribution of participant loan See Figures A $70,000 $70,000 69.0% 1,001–5,000 38.8% 1 and A2 in 9.4% the 35.Plans Te 9% appendix for the age a 42.3% 19. nded s”). See U.S. Department of Labor, Empl 0% to Be Sm 12.9%16. all n 9% ......................................................................... d ten8.2% ure distribution of the 2003–2 5.0% 6. 8.1% 8% oyee Benefits Security A 3.4% 2.5% 2.7% 009 consistent group of 9. 22.2% 5% d........................... 13. ministration, 7% 2010a. 48 loan outstan 40 40 ding. At year-en 50s d 2009, the percenta 38.1% ge of participants 13.0% offered loans with loans o 48.8%utstanding ticked up to Prior to 2005, the U.S. Department of Labor a Private Pensio F Figure 2 igur g n Plan Bulletin e 28 updates reported a count of a FACTS from EBRI. Washington, ctive 401(k) plan DC: 401(k) pa Employee Ben age group, av 33. rticipants’ assets were i 4 erage accou efit Research n tI bala nstitute. “History nces te nvested i nd to incr n equity secu of 401 ease (k) Plans: wi ri 67. 67. 67. 67. 67. ties th ten 6% 6% 6% 6% 6% throu u An re. g Update.” h For eqexampl uity fune, th ds, th e e e average accou quity portio 4 n of nt ba bal lance of anced funds, 43 database at y (whether o Relationship of EBRI/ICI 401(k) Database n his o ear-end 2009. r her own o Nev r thro eugh auto rtheless, with matic enro Plans to the Universe respect t llment) o averag . In either event, job tenure would of All 401(k) e asset allocat Plans ion a ............................................ t year-end not accurately reflect actual 2009, the 203. 03– 9 .............. 6 2009 Figure 14, 401(k) Account Bal Of Of w wh hiich ch:: tar target get- -a date date nces Less 66. 66. f funds unds 5% 5% educa an an Th tiona opti opti an $10,000, by o o l, and n n scientific func Particip tions of the Instit ant Age and Te ute. EBRI nure ........................................... -ERF is a tax-ex 4 4.empt organizatio 3 ............ n 19 equity and asset fu >$20,000–$30,00 nds. valuThe es attributed t per0 centage of o those fun 66. 66. 66. 26% parti 5% 5% 5% cipa ds. An acco nts holdi 25% ng Figure 7 unt no ( (m m ba eq 22% id- id- 479 479 lance uity point) point) fu for nds t eac 27% ehnds to part 1 1,934 934 icipa fal ,680 680l as n26% t i salary incr s the sum $126 $126 of t ,e 937 937 26% as,es (Figure h 250 250 e ,partici 457 457 p 28% ant’s 27). Investment 70% 70% 70% 70% 70% performance likely explains much of the changes in 401(k) partici 29 pants’ a Barsset clays Ca apllocations over time. ital U.S. Much of At year- Holden, VanD 20send 2009, erhei, and Alonso 2009 presen 21 percent of the consi 39.2% 11s .tent grou 1 ts a similar ana 20.9% p had more lysis 67. 67. 19.6% of change tha 5% 5%n $20s in asset allocation 0,000 7.1% in their 4 2.0% 01( among a k) acc c 10.1% ounts at th consistent group of eir current >$100,000–$200,000 10% 9% 10% 67. 67. 67.5% 5% 5% 9% 10% 11% 11% 50s hired pa 63. for Ye 6% rticipa . ar-En National Co 34.0% nts bet d All 2003. 10. 60s w 2% mpensation S ee ” In y n33. vestment Com e6% ar-end 20 u 15. rvey: Empl 6% 08p 22.1% and any 36.4% Institute P yoy ear-end 2009 18. ee B 1%ene efits i rspective 5. rne 9% sulted from Private I 12.8% 13.8% 10, 8.0% no. ndust 2A (A incr 4.ry in t 6% eas ugust ed h 3.e Un u 4% 20 se of target- 50.8% 04b ite 64.1% 11. d). Avai Stat 9% es, Marc d labl 19. ate fu 1% e ath 2 n ds: 010 At ye . ar- (Fi Ag gur e e 2 >5,000 ). 64 64. 64. 64. 64.6% 6% 6% 6% 6% 42.9% Percentag10.8% e of Account B8.2% alance Invest9.4% ed$19,926 $19,926 in Target2.6% -date Funds 23.5% represented a age, a pattern 5% b that is out 28.60 perc 6 also o 10.3ent of 40 bserved in 10.31(k the cross-sectiona ) plan participantsl EBRI ’ assets. /ICI The 401(k asset allocatio ) database. Youn n of partic ger parti ipac nipants ts in th Cgen erulli e consi erally stent participant contributions was 18 among the 931 plans surveyed 28.7; Hewitt Associates, 2009, indicates an average number Cerulli of 25 participants compared with th As in 59 21 perc Employee previous ent. Ho years, the dat Ben wever, efit Pe not al Research rcentage of 401(k) P l parti e age and abase Incipa stitute, for year tenu nts have acc Febr re distribu -enld u an P ary 2005. 2009 ess to 401( a tion of the year-end rticipants Wit find Avai s that klable at ) plan partici hout E loans—factori p 2003 and ants’ quity Fund Balances asset al year n Ag location vari ggregat -end 2009 EBRI/ICI 401(k) in ae B ll 401(k ond Index ed considerably ) participants with and with 8 supported by contributions Figure 44 Figure 44 and grants. 27.2 Figure A1, Age Distribution participants that had bee partici 30 p >$30,000–$40,00 ants in their 60 0s wit n ad of 2003–2009 Co hjusted from the number of acti up 401(k) Plan Characteristics, by Plan Assets, 2009 25% to two yeansis rs of tenure 25% tent Group ..................................................................... w Figure A7 23% as $2 ve participants 3,796, c 26% othat was actual mpared with 26% $19 ly reported in the Form 5500 f 8,993 for 26%partici .......................... pants i 28%n their ilings 51 and consistent gro 401(k) plan pa The Typical 40 com %pany Equi stock. ty rticipation. u, bond, m p 8.1(k) Plan Participant 9 had similar Thirty-s oney, and/or asset allocation by ix perce balanc ............................................................................................................................... nt was ed funds in fix , partic ed-inco Figure 46 Figure 46 ipan me t age as securiti par es such as stabl ticipants $60,858 in th ee ent -value ire y investm ear-end 2009 data ents and bond and base. . 6 This pattern is Percent Change in Average Account Balances Among 401(k) Participants driven in part by restrictions placed on loan amounts. $60,858 26.5 30s >$200,000 All 5% 50.1% 38.8% 5% 13.9% 5% 12.1% 13.3% 4% 7.3%5% 2.5% 47.9%5% 11.4% 5% the moveme assets in all fu ntnds. in th Pla e largest n balacomponent, nces are const eqructed as the uity fun 8.3ds, te Figure 11 Figure 11 Figure A2 nds sum of a 8.4 to re8. ll fl2 ect part overall e icipant ba $19,398 $19,398 quity lanc market pr es in the pla ices, whi n. Plan ch size gen is erally 60s 60s Figure 15, 401(k) Account Bal participants with account bala Washin employers, wh 52. 52. ww 7% 7% gton, w.ici.org All 30. 30. DC: U.S. 8% 8% ile /pad nother 11. 11. f/per 2% 2% De 1pa 0 2- 29. 29. 0 0 rtment of a nces at the en perce 2_a nces Greater 5% 5%42.3% ppe nt ndi 11. 11. Labor, Bureau o ha 9% 9% x.p d betwee d of 2007 and Th df10.0% an $100,000, by Particip n $1 17. 17.6% 6% 00, f Labor Statistic 2008 000 10.1% an in the 20 6. 6.8% 8% d $200, ant Age and s 9. 9. 08 EBRI/ICI 401(k) database. Holden and Va 8.5% , 201 3% 3% 000 (Fi 0b. 7. 7.g Avai 2% 2% ure A Tenure ....................................... 3.3% lable 5. 5. 3). 1% 1% at In co 19. 19. 21.6% ntrast, in t 2% 2% 23. 23.9% 9% he broader ......... nDerhei, 19 Figure 17 $59,381 $59,381 Gro 47up 20 20 Zero 1–10% 11–2 b0% 21–30% 31–40 Figure 19 Figure 15 % 41–50% 51–60% 61–70% 71–80% 57 81–90% 91–100% end 2008, $20, $20, 44 000 000 percent of recently hired 401(k) participants held target-date funds, 19 percent held non-target-date tende group varied with ww d to w.ebr favo 22.i.org 4r equity /partici pdf/p fun ubl padn icati s, whi t age, a patt onls/facts/ e olderern th participants 0205fat is al act.a.pd 35so we f ob re mo served re likely in a the cross- to invest in sectiona fixed-income l EBRI/ ICI sec 40 u b1(k rities such ) databa as se. bond investment options of 20 in 20 0 Who Have Eq 09. Deloi 24% tte Consulting LL uity Exp 25% osure, b P, Internatio 23% y Particip nal Fo an 25% tundatio Age an n o df T Emplo 26% enurye, 2009 ee Benefit Plans, 25% and th 27%e database. age. Youn >$40,000–$50,00 and c ger o partici mpany s pants te tock, and GIC 21. nde 3 d sP P to and/or Percentage of Account Balance Invested in Non-Target-date Balanced Funds e er r favor centa centaequity g ge e of of fu Eligib Eligib nds, le le while 401(k) 401(k) older Plan P Plan P participants a ar rt ticipants icipants were more likely to invest in fixed- without loan access in the database, on 1999–2009 ly 19 Consistent Group Had Longer Tenure Than percent >30 >30 Year haY d a ear loan s s outstanding at year-en $18 $18,986 d 986 2009. On average, over the to exclude: (1) individuals eligible to participa $60,000 $60,000 40s Me Me 21.d d Fe Fe 0iia an n w w 401(k) P 401(k) P 50.0% a ar rtt t e in a 401( icipants Had icipants Had 10.8% k) plan who had Outstanding Outstanding 10.3% not elected to 401(k) 401(k) 7.7% Loans; Loans; have their emp 2.8% $18,942 15.9% loyers make money f Participa 60s with mor 60% 60% 60% 60% Present From Year-End 2003 Through Year-End 2009, unds. nts w e i than th no equity f 30 yearsund bala of tenurnces e (Fig may still hav ure 13). Simila e exposur rly, the e to t by Participant Age and Tenure avera he stock marke ge account bala t through com nce of partici pany stock or pants in their 40s Changes in 401(k) Participants’ Account Balances .............................................................................. 5.7 ................................. 6 AllFigure A2, Ten 37 69.Total Plan Assets 7% 36.u 2% re Distribution of 2003–2009 7.Age Composition Age Composition 9% 36.8% Tenure Distribution Total Plans 19.4%of Selected 401(k) of Selected 401(k) Consistent Group Total Participants 17.4% of 2003–2009 Consistent Group ........................................................................................... 5.Account Account 0% 7.Total Assets 0–2 Year 5%Balance Categories Balance Categories 3.5% s 2.9% Average Account Balance 10.1% 14.4% 51 60 ww estimated w.bls.gov Salar as t /y ncs/ebs h Range e sum o /be f a nef ctive participa its/2010/own ne ts rship/private in the plan an /table d, as 02a. such, pdf do 18.3 es not necessarily represent 18.4 the total number of Relationship of EBRI/I rose from Plans With Company Stock 1996 throu Ratio gh 1of 401(k) 99 CI 401(k) Database Plans to the Universe of All 401(k) Plans 9, before Account falling thro Balance ugh 200to Salary, 2, rising a 2008 gby Participant ain from 2003 thr 4.8 Age and Tenure ough 2007, then dropping in 2003 presents database, 7 pRatio e a similar analys rcent 401(k) Account of of 401(k) particis of changes i ipants Account Balances Greater had ac Balance counts wit n asset allocation am to Salary hThan $100,000, by Participant m Figure 13 ore than for Participants ong a consistent group $200,000, and l in Their 60s, ess than of participants with account balances Age and Tenure 10 perc by Tenure ent had accounts Figure 16, Med It is possible t 20s20% 56. ian Account Balance Among Long-T 2% hat these older, longer-t 2.5% 2.1% enured workers accumulated DC pla 2.0% enured Participants, by 1.4% Figure A4 1.4% $17,909 Age and 2.n 2 assets % Sa (e.g., possibly in a profit-sharing plan) lary, 2009 1.2% .................................... 1.3% 1.4% 28.5% ...... 21 balanc The value of t >$50,000–$60,00 ed funds, and his percentage 2 0 percent he is lower 24% ld both. than it would have be 24% 22% en if it were 24% merely reflecting employee turnover and 25% 24% $17,794 4. 25% 1 other stable value funds 925 6,254,419 15.8 $470,098,152,981 3.9 f Younger unds, G 50sIpartic Cs an Me ipants d othe dianrgen stab (mie d- rall le point va y tended to l)u eEBRI Issue B fu41.6% ndWith With s, or favor equ mone 401(k) Loans, 401(k) Loans, riefs 9.5% y fu iare period ty an ndd ba s. icals providing exp la b bnce y Plan y Plan 9.8% d fun Size Size ds, wh ,, e 2009 2009 9.1% rt evaluati ile older3.4% partic ons of emplo ipants y23.8% ee benefit issues and were 3.8 more likely to International Society of Certified Employee Benefit Specialists, Age Group All Participants >0–50 percent in EBRI/ICI 401(k) 2009, repor >50–90 percent Database at Year-End t that the average number >90 percent 2009 of funds offered by the Refl past 1 income securities such 25 ectin 4 years, g th b ei d among part r higher avera as b ici o bg p nd e a ants fund gewith an s, Loans Loans d te GIC loanure, t s n and other s outstandi T Te ended nded he 20 to Be to Be stable 0 n3–2 g, a009 consis b Small, Small, value out 14 f 1996–2009 1996–2009 percent untent ds, or mon group als of the r ey f e ounds mainin had median (Figur g acco e unt 2 and av 1). balanc For erage a exam e was pl ccount e, Percentage of 401(k) participants Perc by years entage ofof tenure, Participant year-end 2003 and year-end s Without Equity Funds 2009 with balanc contributions; up to tw ed fu$40,000 or nds, which o and (2) nonves years of tenure was Percentage Percentage les inc s lude tar ted former employees who had no of participants of participants get 17% $16,146, compared -date fund 19% with account with account s. Indeed with , 71 18% balances in balances in percent t (at the time the Form 5500s were submitted) incurre $125,257 for partici o 18% f participants s specified ranges, 2009 pecified ranges, 2009 p 17% ants in th with no e eir 21% q40s uitywith mor funds ha 19%ed thad the n 20 $0–$250,000 . “Contribution Behavior of 401 a9,597 (k) Plan Participants Percentage, 2009 86,045 $51,712 During Bull $1,019,080,598 and Bear Markets.” National $11,844 Tax Association See Figures A Age Group Comparison of Consistent Group of 401(k) 1–100 0 4Tenure (years) and A5 in Age Group the appendix for a 2003–2004 38.2% >0–50 per Participants to E 2004–2005 sset allocation 8.9% cent 2005–2006 information for the 2003–2008 4.3% BRI >/ICI 401(k) 50–90 per 2006–2007 12.4% cent Databas 13.9% e2007–2008 ............................................. >90 per consistent group of participants. cent2008-2009 15.9% 2003–2009 ........ 10 PLANS WITH COMPANY STOCK 401(k) Account Balances Increase With Age and Tenure 11.6 200 employees 8, a >$60,000–$70,00 nd risi at the sponsori Percentage ng in 20009 (Fi of participants ng g firm. ures 23% 8 a nd 2with account 0). At 24% year Percentage, 2009 -enbal d 2 22% ances 009, eq greater than $100,000 at uity 10.9 23% funds were 4 24% 1 percentyear-end of 23% the assets in 200925% the Figure A3, Distribution of 401(k) Account at the end of e Fidelity I between $ nvestments. “Im 100 Of w a ,000 ch year from an hicd h: tar $20 p get- a0 ct of Mark 1999 through 2 , date funds 000 (Figures et an opti Bal Voa A3 an 002 in the EBRI latility on o nces, by Size n d 10 Par ). tof icipant 731 /ICI 401(k) database. Holden, VanDerhei, and Quick, 2000 Account Excha Baln age nce ................................................ 4,213,175 Behavior.” Building Fut $325,628,206,556 ures: Impact ................... of , Market 52 prior to the intr 30s 63.oduction of 401(k) plan 3% 4.1% Average Asset Allocation of 401(k) Accounts of 3.0% featu2. res. However, 6% 1.7% 10. such DC plan 3 1.6% arrangements g 1.8% 1.2% enerally did no 1.3% t permit employee 1.2% 18.2% The retirement. The EBRI/ICI 401(k) database ha 20 60s 09 EBR (M 9. Ii/ICI d- 7 point 20s 40)1(k) databastrends, as well e is 33.7% a r39.4% epres s added d entativ as cr 7.8% itical analy ata e s provid ample ses of ers since 2003, and b of t 9.4% 10.5% emplo he es ytimated u ee benefit po 9.8% niv y licies an definition participants in thes ers 4.3% e of 50.1% d proposals. 401(k) 31.8% pla EB nsRI Notes . At year e plans is a -end MORE THAN THREE-QUARTERS OF 401(K) PLANS I Percentage of participants, by years of tenure, NCLUDED TARGET-D year-end 1999 ATE FUN and DS year-end IN THEIR I 2009 NVESTMENT LINEUP 9.1 Figure 17, Ratio of 401(k) Acc invest in Our 50% 50% 50% 50% fixed-income securi 8.7 ties such as ount Ba >20–30 Year lance to Salary, by bond fun 8. s4 ds, GI Ag Cs and other e and Tenure stable ....................................................... value funds, or money funds..................... 21 606 401(k) plan sponsors in their survey was 20 in 2008. 7.9 balanc among es that partici 0>$40,000–$60,000 % p 100% 100% were much ants in 20s their higher 20s, th than e avera 17% the g median 26.1% e allocation 16% and a tvo Non-t erage accoun equity an 6% 16%arget11.8% -dat d ebalanced fun 16% t balances o 15% d f t s hwas 73 e broader 62.2% 19% percen database t of assets, Com 17% binat (Figur ion of e 5). At taken out 10 as a 300% loan (Figure 46). U.S. Department o Tenur f Labor e of Par da ticipant ta indic (year ate that s) loan amounts tend t7. o0 be a negligible break in servic Procee %101–500 . din “The Em e period established by their p gs, 43. 43. 43. 43. Ninety 2% 2% 2% 2% ploy-Si ment Sit xth Annual 39.4% uatio Conf n, October lere an (see U.S. Depa 11.4% nce on 2010” (20 Taxati 5.0% 10c on rtment of Labor, Employe , Nov ). Economic ember 13.9% 13 News –15, 2 Rel 12.4% 0ease, 0 e3 Benefits Security Administration, , Chicago, November IL: 4 5,4–5 2012.5% 3. 10c. 20s years of t investments in $50,000 20s 51.>$250,000–$625,000 8% >$70,000–$80,00 enur 33.e. 0% either com 6.All 1% 0 p38. an5% y stock or 26% Average 401(k) account balance, by age and tenure, 2009 92.6% 32. 8,161 8% balanced f 23% 53.8% 5. unds 8% 151,990 a22% t year- 45.5% 5.0% end 2$3,452,162,443 0 22% 9.09 2% 32.6% (Figu 5.4% re 28 23% -23.4% ). Fo 3.8% 23% 23%r exam 23% 23% 22% ple, 56.8% $22,713 77 percent 24% 586.6% 29. of 5% 11.7% 5.5 5.9 Factors That Affect 401(k) Par <100 participants ticipants’ Account Per Perc cent entage age 100–500 of of eligible eligible Balanc 401( 401(k) k)es ..................................................................... par part tiicipant cipant 501–1,000 s wit s with h out outst standing 401( anding 401( 4.91,001–5,000 k) k) loans loans $46,338 >5,000 ........................ 10 26 Volatility All . Boston, MA: Fidelity Investments monthly period , 20 ical providing cu 08. Availa 51,852 blerrent information on a variety at 20,743,731 4.6 1,210,414,818,938 of employee benefit topics. EB Among those Plans With Company Stock RI/ICI 40 60% 400% 1(k) who datab 30s helda se bala , comp nced fu are 7% 7%nds, r d with e 52.3% cently h a 37 perce ired nt s participants hare at year 11.0% in -e 200 nd 9 20 were 08. mo Bala re like nced fu l36.6% y to nds, holw dhich i a high n 5. vest i 2 n includes an a Among i 40s ndivi 6 n dual 4 8. alysis of chang 4% 01(k) par 4.5% es in equity ticipants 2003–2009 Consistent Group, by Participant Age 2.9% in t $15,246 fuh nd asset allocations among participants e consistent 2.6% b1.7% group, th 1.5% e allocation of 1.4. 53 % accou with account balances at the end 1.0% nt ba 4. lances to 31.1% equities var 1.0% 13 iof each e.d 8% Figure A4, Average Asset Allocation of 401(k) Account 200 contributions and often were 9, all 401 40. 40. 40. 40.(k) plans h 2% 2% 2% 2% 30s eld a total o designed to f $2.8 be supplemental trillion 33.5% in Tenur asse s of 2003–2009 Consistent Group, e of to other employer plans. ts, and t Participant (h 4. y13.3% e 1 earda s) tabase repres Thes ents abo by Partic e participants’ 53.2% u ipant Age t 44 perce acco ...................... unt balanc nt of thates that ... 3.52 9 AT YEAR-END would not be included in the The distribution of account b >$60,000–$80,000 2009: At yearconsistent -e and lances 20 15% 09, group. Moreover, any time a 401( across the 2003–2009 nearly 10 2.513% percent 14% of the consistent group also high 10% 10% assets i 13% k) plan n the sponsor changed ser EBRI 12% /IC lights their higher I 401(k 17% ) data vice providers, all ba accumulations. At se was 14% invested in 22% 22% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Com >5–10 pany stock 99.8% Target-date f 56.1% unds balanc 46.4% ed funds 16%33.2%Company-22.1% stock c 54.7% ompany stoc632.8% k and/or 11 Washin Washin >$80,000–$90,00 gton, 501–1,000 gton, DC: U.S. DC: 0National Department of T23% ax Association 37.5% Labor, Bureau o a 23% 11.4% , 2004c.f Labor Statistic 21% 3.8% s 21% 14.1% . Available10.4% at 2.4 23% 21% 19.0% 23% 30s Figure 18, Ratio of 401(k) Acc year-en portion o compared 56.0% d 2009, f pla wit 41.n h 0% assets an 47 the averag percent o 6.6% d t e 28. hfo 401 at very assets amon 6% unt Balance to Sala (k) accou 23. little 0%of loan n g t bala partici ry for Participants in amoun nce o 11% 5. pants 5%f tth in th s gets conv e consistent eir 5.3% 60s. A Their 20s, by er 11. group ted i m 2% ong nto was $ partici 5.distributions in 2% Tenure 1 p0 ants in t 4. 9,72 9% ................................. 3, almost h any eir 20s, the avera given doubl year e the av .............. (m 24. geanin 6% e erage g 11. 22 0% >$625,000–$1,250,000 7,879 0–2 >2–5 242,060 >5–10 >10–20 $7,121,180,347 >20–30 >30 $29,419 partici A ne 2008a an w f pants i eatur d 200 n e in t their 8b for further he y 20e s wit ar-eh n detail). This change in metho out e d 2009 qEBRI’s uity data fun base is the a Pd ension Inv s held equitie esb tme ili dology ty to link s th nt Re rough port results in a dramatic in in provides detailed fin com dividuals across pany stock, ba plans an a crease in the n ncial lanced f information on th d acros unds, umber of individuals s or both. recordke e universe of Indee epers. d, The ass http://dc 20s et allocation path that the target d Of w a.fidelity.com/stati hich: target-date funds c/dcl 33.6% e/WPS an opti -date fund oF nidelityPersp 30.5% follows 39,873 ectiv to shift its focus from Tenure (years) es/docum 5.0% ents 14,784,660 a /MV_ 8.5% growth to income over partbeha 4.9% vior_Fi 16% 16% 861,595,956,927 nal_1 time is typicall 21108_5.12.3% pdf y Reflectin 16 g their hi40s gher 40s average age Loan Loan anas as d te a per a per 52.9% nure, t 33.9% cent centage age he of of t t 19 he r he r 9em em 9–2 aining 401( aining 401( 009 consis 13.5% 11.5% k) k) account account tent balance balance group also had median 52.6% 35.6% and average account Year-End 2009 Snaps publications $15,000 hot of 401(k) Participants’ Acco $41,233 unt Balances ............................................................... 21% 21% ...................... 13 equiti concentration es and fi xed-incom of their acco e se un curities, also ts in balance in d f cunds rease compared d in share, a wicth co p un ast years. At ye ting for 17 perc arent of the assets in the -end 2009, 61 percent o database at f re bcently year from 1996 50s40% 40% 40% 40% 0 >$80,000–$100,000 71. to 1998 in the 90% 90% 2% 4.6% EBRI/ ICI 401(k) database. 2.7% 14% 0–2. 2 4%12% >2–5 1.6% >5–10 12% >10–20 1.4% >20–30 11% 1.4% >30 11% 0.9% 0.14% 9% 0. 50s 9% 12% 11.9% widely arou Given these investment patt pre-date the 401(k) plan are nd the average o not included in this erns, the gro f 59 percent Percentage of account balances, w for the 1999–2009 th patt analysis, ern ofwhich focuses on 401(k consistent ) balance grou s 401(k) balance amounts. is inf 2009 p as luenc a w ed by stock mar hole. Thirty-sek vet retur en perce ns. A nt of s stock year-end 2009, total. participants in the plan would be excluded fr 30s>$90,000–$100,00 Th 1,001–5,000 e dat 15.4 percent of the consistent group had mo abase also All 0 covers 42 58 22% 41.5% 39.9% percent om the consis 22% of t 8.7% 28.6% he univers tent group. For the year-end 2 21% re than $20 5.3% e 31.5% of active0,000 in their 401 40 20% 15.9% 23.5% 1(k Age G Age G ) plan r roup oup8.4% parti 22% -28.6% 003 EBRI/ICI 401(k) database (k) accounts at their current cipants a20% nd 10 47.0% perc15.7% ent o 23% 206.7% f a ll 40s target-date fu 54.4% 41.nds an 1% 8.d 2% and/ 33 percent of or25.3% 401(k 20.9% ) particip 4.ants 5% held target-da 6.5% 12. te fu 7% nds. Also 6.4% 5. known as 6% lif target ecycle f -datunds, t e funds 22. ,h and/ 6% ey are or12. 0% Figure A5, Asset Allocati www.bls.gov Source/:news.rel Tabulationsease/ fon to Equities Varied Widely rom EB e R mpsit.t17. I/ICI Participaht nt as -m Dir only ec t$13,493 ed Retir Among Participants in the ement Plan as D only ata C equit ollectiy on Project2003–2009 Consiste . as only nt Group ....................... 53 The distribution of account balances underscores the effects of age and tenure on account balances. In a given age account allocation to 30s >$1,250,000–$2,500,000 Age Group balan ec qe of uity $ fun 50s 58,3 ds w 0–2 51as 38 among per defined b partici cen 44.0% 7,694 >2–5 t of pe 32.8% ants in nefit, defined assets, 14.9% thcom 414,735 e e>5–10 np contri tiared with 32 percent re datab bu4.3% tion, 13.5% asand 401( $13,741,687,164 e. The >10–20 me 10.2% k) plans. EBRI dian of assets among par 401 5.5% >20–30 (k) 53.6% accou Fundamentals of Employee n $33,134 t bala ticipants nce >30 amo in t 16.4% hng t eir he that most loans are r 50s epaid). 53.0% 11.8% 35.2% Figure 19, Ratio of 401(k) Acc reported as active participants in 401(k) 350% ount Balance to Sala -0.8 plans; in 2004, the ry for Participants in number of acti Their 60s, by ve participants Tenure increased to 53.1 million (new ............................................... 22 48 This im percproved the ent of partici identif pants i icat n their ion of $13,038 2 active 0s wit participants hout equity an fund re ds hel sulted in d target th -date e reclassifica funds—which tion of wi near ll te ly nd 1.5 mi to bellion highly participant referred to as the “glide path.” Since discussions of asset alloca balances that >$100,000 were much higher than 14% the median 10% and average accoun 10% tion usually fo 9% t bala Per cus o centage of nces o n the p 9% f thercen e broader tage of the portfoli 11% -1.da 6 tabase 10% (Figur o investe e A8). d in $40,000 17 $12,810 Definition of 401(k) >$100,000–$200,00 Note: The analys -2. >5–10 is Account 5 inc0 ludes 401( Balanc a22% k)17% 17% pl 55.8% an p e .......................................................................................... articipant20% s w37.2% ith two or fewer19% ye36.2% ars of tenure in18% the 26.6% yea d r indicated19% an -27.6% d in a plan offeri 18% n ................................. 13 g 50.9% company stock 19% a302.4% s year-en hired pad >5,000 rticipa 20 250% 09n . Despit ts holde ing ba the ilanced f ncreases in 34.2% -3. unds 0 sh had mor ares of 10.2% e equity than 9 and 4.2% 0 perce balanced nt o14.3% f the funds ir acco and th 10.4% unte bala decreases nce inves in t $12,655 ted i he shar n balanc 20.9% es ofe bond d 50s partici market valu 6053. s p 2% ants i 35. es ge 7n 5. 0% the 8% nerally 19 9.99 8% 3.–2 mo 9% 00 24. ved u 9 consistent 8% 2. p1% ward 20.7% b group e1. twee 9% n had mor 20 4.0% 03 1.3% and e than 201 6. 07, 8 .2% 9% 0 the perc averag 16. 19% 19% ent of 1 8% .1%e acco the 8.19% 19% 6% ir ac 0.unt 7% 7. counts investe 2% balanc 0.8e of % the d in 0. 20 8% e 60s 03 quiti –200 e 19. 10 s, 9 4% .while 5% 12. 4% 44 401 (k) pl. “The Influence of Automatic Enrollment, ans. The dis 60s 5% tribution of assets, pa 32.1% rticipants 6% Catch-Up , and pla , an ns in d IRA Co 12.8% the database for GICsntributions on 401(k /Stable 2009 55.1% is similar to ) Accumulatio 6% that re ns at ported for employers, while another 18.6 percent had b design 38 update, see Holden and ed to simplify balanc investin ed f VanEquity unds Dg erhei, 2004a a anTarget-date d Benefit Programs toequit auto yNon-Target-date Bond inv mate account netween $100,000 and $2 d 2004b. estmentoffers a straightforward, b rebala inves ncing. Money tment 00,000 (see Figure A3 in the Appe asic exp equit 60s 60s y inv lan Company ation of estment emplo non-t yee b andix). In contr rget enef -dat it programs in e balanca ed f st, in unds 40s Plans 5% 42.1% 10.4% $12,578 4.4% 11.7% 6.9% 19.7% 60s 52.7% 6% 11.6% 35.7% 6% Figure A6, 1999–2009 Consistent Group Was Older Than group, Fidelity I See Figure A1 >$2,500,000–$6,250,000 shorter 20s an nvestments. “P invest tenur me 3 in the Appendix for a detailed presentation nt ope t tione .$4,976 artici nds to mean p$34,037 ants Conti that 7,737 $10,064 nua hi e to Stay gher perce the 800,721 All Part $14,920 Course Amidst ntage of the cha icipants in of partic n$30,796,702,552 ging percentages Market Down EBRI/ICI 401(k) Database ipants will hav turn; Im e of account balance invested i accouprovements Seen in nt bala at Year-End 2009 $38,461 nces of less th ....... n an 54 consistent par 60s. You Social Security replaces a mu -10%50% n Source: Tabulations from ger Invespartici tticipants ment Opti pants al ons was $11,873 Offer EBR $59, so had ed by ch higher fracti I/IC 38 I Pl 1 at Participant-D higher an year-en allocations to on of pre- irected R d 20e Per 09, tirem retire centage of pl nearly t ent bala Plan D ment earnings nch ed fu aans ree ta Co -nds, particul a llection Project. n11% d-o par for lower ne- tichalf ipants arly ti -income mes the to target P workers. For example, th er med centage of as -dat ian accou e funds. sets n A t t bal arget- ance o e first- f 80% 80% >10–20 30.3% 22.4% 27.5% 20.9% -29.2% $80,023 42.5% 147.9% concentrated method) from 44.4 million (old method; see accounts that 30% 30% 30% 30% >$200,000 iwere n equity secu b multi 18% 18%pleri accounts ow ties for 18% that ag c ne U.S. Department of d e 15% by sin grou 18% 18% p—as gle in 18% 18% thei dividu 13%r o Labor, Employee Benefits Security Ad 18% 18% als. Thi nly equi 13% s ty investment. procedure al 13% so allowed E Another 812% per ministration, 2 BRI an cent of d ICI 60s partici 13% to begin e008b and pants equities, the glide path generally reflects the declining percentage of equities in the portfolio as it approaches and passes the Figure 20, Asset Allocati At year-end All 2009, the All avera on of 401(k) Part ge 40 35.9% 1(k) acc icipants o31.0% unt b 9.9% ............................................................................ alance of 4.4% the 19912.9% 9–2009 14.7% consistent 10.0% grou 56.1% p was $ ................................... 131,438 (Fig 19.7% ure A8), 23 60s 47.2%Age Group 28.6% 11. $11,600 1% 21.5%Funds -9.117.0% 4.5% 14.3% 21.8% 6.4% 9.7% Total19.3% 12.2% funds, funds, Size of 401(k) GICs compar aned with d oth Account Bala er sta 56Funds per ble valu c nces ............................................................................................... ent e f in the priv u 2n 0d 0s, and money 8Balanced Funds , 48 perc ate and public s ent in 200 fu Funds e nds, most 40 ctors 7, 43 perc . Funds The EBRI Data Value Funds 1( ent k) partic in 2book on Emplo 00 ipa 6, n Stock ats appeare nd 7 perce Other yee Benefits d no ................................... 15 nt Unknown in t to have made 1 1. 998 0% is a (Fistat gur 15 istic e .8% 3al 6). U.S. Gover AllRetireme 50s nm 6nt.” 7. e4% nt Accou Investment Co 4.n 1tability Of % mpany I 2.7% fice. 33.8% “4 n01(k stitut 2.4%)e Pers Pension 8.4% 1pective .6% Plan s: Loan 11, 1.4.8% 5% no. 2, Provisions Enha an 1.6d % EBRI Issue 16.1%1.0% nce P 10.4% Brief articipati 1. , n 1% o. 28 on but May Af 3 (July 2005 21.2% )fect . 13 perc consistent gro ent hel (percentage of u dp rose, no equiti on ePlans) average, s at all in 20 17.7 09percent (Figure per A1 year 2). over that four 18% -year time period. In 2008, stock market Athe broader EBRI/ICI 401(k) database, 7.1 percent of particip the u ge Group niverse of plans as All estimated by Cer48.4% ulli Associates 26 (Fiants had gur 28% 28% e 3)11.1% . accounts with more than $20 40.6%0,000, and 9.5 percent 61 300% 17% 17% 17% 17% -11.9 11% $73,175 Worker >$6,250,000–$12,500,000 NEqui ote: The tenure variable is generally years Enga ty, bond, m gement, Acco oney, and/or un bal t Dive anced funds 3,961 rsificati working at current em on and Com 866,833 53.8% ployer, and thus m pany Stock Usage.” $34,703,285,828 ay overstate years of 30.3% News reparticipation in the lease, January 24.6% $40,035 401(k) plan. 28 21% 21%, 2009. equity fun $10,000. Fo 30s ds a r e mong the 16.7 xample, 14% 8 $11,052 5 pe million 401(k) pa rcent of partici $20,355 c prticipants with account bala ants in 12% their $36,091 20s with two nces in th $50,696 or fewer years e EBRI/ICI 401(k) database at y of tenure ha 11% d account 50s bal eaa rn -end ces of $17, date, or year replaceme 40s 794 amon lifecycle f g nt rate (scheduled Social Security benefits as partici und All pursu pants ein th s a lon 24.8% e eg n-term tire d investment atabase. 18.5% strategies, a percentage o 23.8% using a mi 18.2% f average c x of $70,276 asse are -30.0% t classes that er earnings) fo 39.0% fr retired worke ollow a 110.6% rs in The value of t Salary Rangehis percentage is lower than it would have be 12% en if it were merely reflecting employee turnover and 50s 50s AllFigure A7, 1999–2009 Consistent Group Had 2010b). As the Department of 54.Plans With Company Stock and GICs 2% 37.9% 7.2% 27. Labor notes: “In a purely 8% 22.9% /Stable-Value Funds Longer Ten 424.9% econom ure Than ic sense a 6. Al 3% l Participants in EBRI/ICI 401(k) Data 13. nd for research 2% 6.1% 5. purposes, individuals in thes 7% base at Year-End 24.1% e 11.8% in th to consolidat eir 20s wi e account balan thout eq 16% uity funds ces for indiv had equi iduals across data provi ty exposure through non ders to -targ provi et-date de ba a mo lanced re accur fundate s, an estimate of aver d another 5 percent age target date, NEW EMPLOY more than do which is usually in uble EES CONTI the avera NUED gdicated in the f e ac TO count USE referen bal BA ce work o LANCED aund’s nce on name. f emplo $58, FUN T 3 D y 51 amo h S, I ee ben e target date NCL efit pr ng UDI par ogr NG TAR tams and generally is the icipants G work force-related issues. ET- in t Dh Ae ent T da E FUND te at which ire data S: Ac ba ross all but the oldest se (Fig the typical inve www.ure ebri. 9 org ). The stor 401(k) Plan Loan Activity Available Income S 60s at ecuri www.ici.or ty for Som g/e pd .” Va f/ Letter Report per ries W/with Participant Age, Tenure, Account Balance, and Salary 1 26.7% 1-02.pdf, GAO-HEHS-98-5. Washingto and 7.5% www.ebri.org/ 4.1% pdf/briefspdf n 19.7% , DC: /ebri_ U.S. Go ib 16.4% _07-20 vernment 054.pdf Accountability 19.8% 20s $30,000 Relationship of Age an Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. 77.d 4% Tenure to Accou a 47. nt B 7% alances ............................................................................ 8.0% 5.4% ........................ 15 16.3% Figure 21, Average Asset Allocation of dramatic sh Concentratio -20% ift n sis highest amo in their asset allocations ng recently 401(k) Accounts, by in hir 200 ed 9. partici pant Participan Fi s with gure 42 target-date t Age .................................................... funds; at year-end 2009, 64 ..................... percent of 25 performance 20s turned shar46.6% ply negativ 14.0% e, with the 6.2% S&P 50010.4% total retur 4.6% 2009 n index 6.9% falling 37. 9.3% 0 percent 1.0%(only in 0.9% 1931, 100% when the Available at Of w $26,098 70% 70% http:/ h >5–10 ich: tar /content.m get-date funds 47.4% embers.fi an opti d on elit 32.2% y.com/Inside 32.6% _Fidelity/full 24.0% Story/1,,7>2–5 Year 669, -29.8% 00.html s 51.0%48 239.5% had accounts b >$12,500,000–$25,000,000 etween $100,000 and $22,652 00,000 (see Figures 10 and A 1,116,783 41.4% 3). $46,415,289,211 22.6% 17.9% $41,562 Age 40s $16,146 >10–20 Year Percentage of $26,975 s Account Balan$49,222 ce Invested in No $82,127 n-Target-date Bal $125,257 anced Funds 20% 20% 20% $40,000 or less 200% 18% 9 d 17% 13% 19% 20% >20 Year 19% s 24% 2008 and less than 2009 ............................................................................................................................... year- $10,000 e a nd 2009. in 2009, compared w c ith 57 percent of participants in their 20s with betw.......................................... een five and 10 years of 54 predetermi retirement. The EBRI/ICI 401(k) database ha the 1940–1949 1–100 $10, 100 ned reallocat 000 birth cohort (individuals ages ion, typically r 32.7%ebala 60 to 69 in 20 s added d ncing to sh 13.7% ata -20. ift t provid 509) de h 6.0% eir ers since 1999, and b focus creased as income increased. The me fro 9.5% m growth to 6.8% y income over definition participants in thes 40s 16.6% time. dian replaceme At year-end 7.3% e plans nt rate 13. 13. 13.3% 3% 3% $58,604 19% 19% $58,868 PLANS held compa groups should account 30s WITH COM balan ny Pces per stock as thei not be included in the count of ANY A target-date fund typically rebalances its portfolio to become less focused on growth and more focused on income as it ST in OCK AND GI 75.divi 4%dual. r only Cs equ AND/ ity in 43. OR OT vestment. Si active part 4% 23% HER ST icipants.” However xt ABL eeE n -V perc 5. A9% LUent E FUNDS h20% eld some com , the form schedule needed to 19% 19% 8.9%bination of target-date make the 17. fu 2%nds, non- fo age Plans With Company Stock and GICs, r who Office, grou m that fund is design p, m Octob ore new or er 1997. rec Availa ee d wo nt h ble uld reach retirement age and sto ires i at nww and/or Other Stable-Value Funds vested t w.gao.gov/archiv heir -22. 401(k) 1 assets in e/199 p maki 8/he9 bang new invest 8 lanced f 005.pdf unds, ments in the f including targe und. t-date funds. At The median gro 4 w0 th 1(pa k) account ttern of Age Gr the bal oup 1 an 999– ce amon 2009 g th cons >0–50 per e iconsistent par stent grou cent p’s average accou ticipants was $73, >50–90 percn ent t ba 22% 17 lances r 5 at yee ar-en > flects stock m 90 per d 20 cent09 (Fig arket perform ure A8), moance re The Typical 401(k) Plan Participant >10–20 24.2% 18.3% 23.7% 18.3% -31.3% 40.7% 107.9% recently Relation hire 250% shd ip Be 18% 18% A partici ss tween et18% 18% A pants h l Accou locaotldin in on t Balan g tar D 18% 18% isc g tr es an et ib 18% 18% -date utd S ion of a fun lary d R s h .............................................................................. ee cle dnt mo lyre than 18% 18% Hired 90 percent 401(k) 40s 40s Pa of t rtic 18% 18% ih p eir ac an18% 18% t Ac count co 18% 18% u balance in t nt Ba ........................ 15 lancarget-dat e e In the 2009 EBRI/ICI 401(k) database, 89 percent of participants were in plans offering loans. However, as has been Figure 22, Distribution of 401(k) total retur >$40,000–$60,00 40% n Equi 30s on ty large-com , bond, m 0oney 54.5% p, and/or any stock fell Plans, Participants, and Ass 20% bal 24% 24% 8.6% anced funds 43.3 23% , percent, 5.3% did 10.7% 21% ets, by Invest that measur 3.8% 26% e ment Options, 2009 perform 5.2% as 28% 9.6% poorly on a ............................................. 1.3%n 27% an 1.0% nual basis as the 100% 30% 25 Group >$25,000,000–$62,500,000 Zero 1–10% 11–20% 2,007 21–30% 31,819,271 1–40% 41–50%13. 13. 13. $78,805,522,642 5 2% 2% 2% 1–60% 61–70% 71–80%$43,317 81–90% 91–100% 27 401(k) accou 50s 101–500 nt balances vari $20,817 ed with 34.8% both $30,768 ag11.9% e and tenF u $54,169 ire amon gure 50 $51,702 9.2% g the co 8.0% $92,304 nsistent gro 4.0% up of partici $171,290 17.9% pants, as they $179,150 6.6%do in the approaches and passes the target date of the fund, which is usually included in the fund’s name. tenure 40s (Figure 14). Ol71. der 7% workers display a 36. similar 8% pattern. Fo 5.r5% example, 59 percent 12.0%of participants in t 43% 43% h17. eir 60s with 4% 20s 45 200 for the lowest 56. 9, n -30 2% % early 30. 1household lifetime earnin 2% 0 percent 8. 20s 2% of 4 40. 01(k 5% ) assets in the 28. gs q 4%uintile was 71 percent; for the middl 20.4% dat 12. abas 0% e were 2. investe 3% 13.3% 4. d in 7% tar e quintile, the median 2. get-dat 5% 1. e f 7% unds. Amo 66.3% 6.7% Social Security ng partici 6.5% pants 22.0% in 14.1% Holden, would not be included in the For statistics i 20s Sarah, Jack Va ndicating the higher propensity of withdraw >20–30 nDerconsistent hei, a18.4% nContact EBRI d Luis 35.8% group. Moreover, any time a 401( Alonso. “401(k 13.2% 18.7% Publications, (2 17% 17% ) P als among participants in their6 20.0% lan Asset A 11.8% 02) 659-0670; lk) plan location, Acco 15.1% sponsor changed ser 5.1% fax publication -27.9% unt Ba 2.0% 0s, see Holden and VanDer orders to lances, 23%v 29.6% 9.5% ice providers, all and Loa (202) 775-6312. n Acti 73.2% 15.2% vity in hei, Figure A8, 401(k) Account Bal adjustment is no longer required. Using Na b ances Among 401(k) Participants Present From tional Compensation Survey data and historical relation Year-End 1999 Throug ships and trends evid h Year-End 2009 .......... ent in 55 Transaction ac target-date balanced f tivity is not tr unds, aor company cked in the EB stock as their RI/ICI 23% 401(k e) q uity database; investme nev nt. As a r ertheless, som esult, many partici e participa 23%nt a pants with sset allocation no eq uity year-en than See Figure A1 four tim d 2009 es the m , about 60% 60% b3 in the Appendix for a detailed presentation 8. 8. 8.4% 4% 4% 30 4 edia 2 per n account cent of th balan e acce of count $17,7 balanc 94e among s of rec of the cha partici ently n h ging percentages piants in red partic the e ipan ntire ts in th of account balance invested i database eir 20s (Figure were investe 9). d n in over the 12 Gustman, Al >$60,000–$80,00 10-ye anar time L., and Thom 0 period. The as Steinm 18% three-y eier. ear be “How Chan 23% ar marke ges 20% t of in Soci 2000– al S 20e 24% 0 c2 u pulle rity Af d fect 4024% 1(k Re)cent R account etirem 24% bala ent Tr nces do ends. wn. 26% ” NBER and GICsto and/or Co 8. 8. 8.0% 0% 0% m other pan sty abl S e v to alck i ue funds Cerulli n 401 24% (k) Plan43.2% s With Company 24.0% Stock, by Partici20.7% pant Age Year-End 2009 Snaps funds 10% 10% 10% (Figure 37). The analysis includes the 1.9 million recently hired participants (those with two or fewer years of tenure) holding balanced f 16% 16% Forty h26% ot of -one 401(k) Asset Al percent of re location cently h ............................................................................. ired participants holding non-target-date balanced 16% 16% ............................. 20 unds funds had more the case for The data market $20,000 >$62,500,000–$125,000,000 di 501–1,000 base d in 200 the 14 yea inclu 8) des 401(k an rs tha d th 16% 16% e ) t the Russell partici 33.9% data p 20 ants ba 883 00 se across a wi has tracke Inde 11.4% $42,925 16% 16% x fa 1,669,553 llin de d g 4 3 range 16% 16% 01(k 8.6% 3.8 perc ) of age a plan ent par $76,732,201,388 (Figure 6.7% n ticipants, r d tenur 8). I e. 3.4% n e Fift lat 20 y-three percen ively f 08, t 40s hee av 17.4% w parti erage 4 $45,960 cipants ma t of 0 partici 1 13.5% (k) acco p de an use of ts unt 50s Lifestyle funds maintain a pre 30s 67.9% determined risk level and ge Loa 3. 3. 3. ns 0% 0% 0% Fr 30. 27.8% 8% om 401(k) P nerally use words such as “conservative,” “mo lan5. s T 1%en 13.9% d to Be Sm 14. al9% l 58.3% derate,” or 17.0%3. 3. 3.5% 5% 5% cross-sectional data 20s 60s40s 80 80.9% base. 3. $23,796 5 50.3% % Younger 2. 7.1% 6% partici $30,990 p1. ants or those 9% 5.7% 1.0% $51,887 11.4% with short 0.4.1% 8%er jo 29% b te $86,694 07.6% .9% nure ten 0.11.2% 5 d% ed to $155,662 have 1.7% 0.4% smaller ac 0.8% 0. $198,993 3%count 100% 7. 2% 30s Figure 23, Average Asset Allocation of Accou 56. 30s 3% 36.5% 8.9% 33.5% Subscriptions to 25. 45.0% 0% nts, by Participant Age an 10.6% EBRI 8.5% Issue Bri 2. e7.9% fs 6%are included d Investment 6.3% 6.5% as part of 3.3% Options 1.2.0% EBRI 6% .................................... membership, or as part of 5.9% 10.0% 8.1% 20. 15.0% ........... 6% a 11. 27 3% Investment Options 30s 30s 3. 3. 3.0% 0% 0% two or U.S. Interna 50s 200 fe 8.” wer Invest l years of t Revenu ment Com e S Allee nur rvie ce. “Notic p had accou any Institute 19.6% e of nt Proposed Ru balanc Per14.3% spective es of 2. 2. 2. le 1% 1% 1% l15, ess than $10, Making, n 20.3% o. 2, a Certa nd0 00. I EBRI in Cash 15.9% n Issue Br contr or Deferred Arran ast, only ief -27.3% , no. 33 17 54 perc 4. 4. 4.0% 0% 0% (Octo gements Under 31.0% ent of 4. 4. 4.0% 0% 0% ber those -33. 20 8 09 81.6% in ). their 2002. their participants in the plan would be excluded fr replacement ra 20s, nearte was 43 percent; and for the highest quinti ly 24 percent of their 401(k a ) assets wer om the consis 64 etent group. For the year-end 1 in leve it was 31 percent. See Congressional Budget Office, 2010. sted in target-date funds 999 EBRI/ICI 401(k) database , while among participants in their >$80,000–$100,00 200% 015% 15% 17% 21% 17% 22% 21% 20% 23% the Form 5500 data, ICI estimates the num funds had exposure to in 2009, the 1.4 million recently hired participants holding target-date funds in 2009; and the 0.5 million recently hired pa 30% equity-relate 2. 2. 2.9% 9% 9% d inveb ser of active 401(k) tments through com participants to be 49.0 million in 2009 and the number pany stock or balanced funds or borticipants th (Fig15% 15% ure 29). 3. 3. 3. of 3% 3% 3% Figure A9, Average Account Balances Among equity fun activity can balanc Workin Orders/ ed fu ds a be inferred g P ndmong the 16.7 Of w s, compare aper, no. hich: tar by a 14105. d get- with n million 401(k) pa date funds alyzin Cambridge, 36 p g th erce an opti e y nt in e 401(k) Participants ar-end snaps M orticipants with account bala n 2 A: Natio 008, an nd a al hot Bu bout s of a reau o Present Fr 7 consi perc f Econo ent i nces in th som Year-End 1999 Throug tent grou n 1 mic Researc 99e EBRI/ICI 401(k) database at y 8. A p o 2. 2. 2. tf year- partic 9% 9% 9% h, June 2008. end ipants. 20h Year-End 2009, 09, For example, 31 percent ea of t r-end he Diversified por 150%tfolios an 40s d ongoing contributions 28.8% helped o 33.2% ffset the im 13.9% pact of t 19.0% he stock market 57.4% decl 15.9% ine. The average 60s 1,001–5,000 60.5% 36.9% 23.9% 10.4% 7.1% 5.6% 6.8% 17. 3.5% 4% 18.1% 13. 11.4% 5% than -40 90 >$125,000,000–$250,000,000 Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. %percent of their account balanc 544 e invested 2. 2. 2.0% 0% 0% in 1,838,633 non-target-date $95,265,460,247 balanced funds at year-end $51,813 200 -37. 9. 0 this borro were Changes in in their win 3 gAss privil 0s or 4 et Allocati eg 0e. s, Nev whil on Between e e 1 rtheless, loa 3 perce $199 annual sub Year-E nt o n activity ticke f participants nd 2008 and scription to dY were in up ear-End EBR inI Notes 2 their 009. 2009 and A 20s and 9 perc ........................................................... t year- EBRI Issue Brie end 2009, ent fs. 21 were in Individual percent th cop eir 60s (Fi of t ieshose e are av ............ 20 gail ligi urae 4). b blle e for 40s “aggressive” in their name to indicate th balanc 53. 40s 8% e of the 36.6% 2003 11. >5–10 –20 0% 09 c 29. onsistent gro 4% 44.0% 21. 14% 14% 43.7% e fu 9% un p f d’s risk level. 14% 14% e30.4% ll by 7.3% 7. 14% 14% a sm 5% Lifestyle fund aller amo 31.0% 2.6.9% 8% unt— s g 6. 27.8 9% enerally are inc 23.6% percent 6.8% 5.0% 36 — -29.8% 1. likely re 2.0% l8% uded in the no 7. flect 8%i52.3% 13.6% ng n- diversif 11. target- 1% ied date 225.2% 17. 16.4% 3% 11.6% 30s 79.9% 4.8% 14% 14% 3.7% 2.8% 1.4% 1.0% 0.9% 0.5% 0.4% 0.3% 4.2% balanc Employee Plans.” Available es, whil at e those www.ici.or who Feder w g/ ae l R re ol pd P efP gis /eper er der rc $30,708 tc er e 1 or ent n 546, t-a 0 age of h g 2 ae no. .p d lo o df f 217, nger r and el ecigi e Nov job ww n bl tle par y w.e embe tenur hir be tri. 10 id rc e 10, o ten i4 pant rg/ 01 1 pdf d (k e 9 sd ) 8 ,/ to have 1 b p by : 5 rie ar age, ti f5spdf c 544 ip hi a 2009 /EBRI –5 ngh ts 554 i en r_ account 9. p IB l_ a10- ns 20 ba 09 la _No nces. For 3 35_K e -Up xad m ate. ple, pdf >$100,000 50s 50% 50% holding non-target-date balanced funds in 2009. 40.1% $30,478 14% 6.9% 16% 6.2% 13.7% 13% 5.0% 16% 12.8% 14% 12.3% 2.3% 14% 0.7% 100% 16% 60s with more than 20 years of tenure had account balances of less than $10,000. Figure 24, Average Asset Allocation 60s, almost 8 percen 50s t of their 401(k of 401(k) Accounts, by Participant ) assets 28.7% was invested in target 13.7% -dat Salar e fun y and I ds.n vestment Op 57.6% tions ................................. 28 39 At year- update, see Holden and by Age an Note: At year-end 2009, the average account balance among all 20.7 million 401(k) particiants was $58,351; the median account end 2009, d T $27,737 e 4 nu0 r1 e ( ............................................................................................................. Van k) ac Dcount erhei, 2001a. balances varied with both age and tenure among the 1999 balance was $17,794. ....................................... –2009 consistent group o56 f 401(k) plans to be 497,000. The estimate of Inves 28 All t0% 0% 0% ment o >5,000 30% ptions are 70. grou 9% ped into 37.0% eight 36. the number of broad 9% 6.3% categoriactive 401(k) plan participan es 6.8% . 6. Equity fun 0% 7.2% ds consist of 11. 2.2% 6% ts is based on a pooled investm 21.2% combination of ents prim 16. 16.5% 4% arily data participant a Equi ct ty ion can , bond, m c b oney e dis , and/or cerne bal d anc by s ed funds tudying , the cases of a 23% chan 13% 13% ge from eit 13% 13% 20s 20s13% 13% her a 0 percent (none) or a 100 percent 2008 and account balan year-ces of r end 2009. ecent ly hired partici 31 pants in their 20s was invested in lifecycle funds, compared with almost 50s account amo The ratio of 4 49. $24,435 50s 3% 31. n7% g th 01(k) account balance (a e consiste 13. >10–20 8% 26. nt gro 4% 23.3% u with prepa p of pa 19. 35.4% t the 6% rticipants current employer) to salary alone ym 17.5% ent6.2% for $25 each 6.8% fell 7.0 22.6% perc (f 3.or printed 6.8% 3% ent be 7.tween 5% 17.5% copieis not an indicator of preparedness for year 7.7% s5. ). 3% Change of Address: -en -31.9% 2. d2.5% 1 3% 99911. and 8% ye 43.2% 21.3% EBRI, 1100 13th St. ar-en 17.7% d 2002 103.7% 14. 16.8% (Fig 5% ure 11.8% At year-end 2 >$250,000,000 009, 62 percen Row percentages may not add to 100 percent because of rounding. t of balanced 737 mutual fu 11,737,107 nd assets were invested in equities (see Investme $822,362,246,519 $70,065 nt Company Institute, 60 a,b portfolios loans ha The Asset Allocati med Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. The tenure variable is generally years working at current employer, and thus may overstate years of participation in the 401(k) d 4 ian an 0d a 1 g (ongoin k) pla e o on and f th n loa g cont e Participan parti ns ri coutstandin butions ipants i t Age .n th .......................................................................................... In g e (Figure 2009, t 2009 datab 4 h6 e stock ). As i ase is n pr market rose a 45 y ev 33% 33% ious yea ears, one year rs, loan activit nd the ol avder erage 4 than y varies 0 in plan. 1( 20 k) acco with 08. .................................. 24 In a unt ge, t 20balanc 09, enur 38 e, ac es o percent fcount the balanced fu 40 $10,000 s $5, nd 7 N N N 000 9. catego one one one 2% 100% 100% 100% 60s ry. 5.1%N N None one one 4. 0% 100% 100% 100% 3. 29.4% N N N 3% one one one 100% 100% 100% 1.6% N N None one one 1.2% 100% 100% 100% 13.3% 1.0 N N N % one one one 100% 100% 100% 0.5% 57.3% N N None one one 0.4% 100% 100% 100%0.3% N N None one one 100% 100% 100% 3.4% within Subscriptions the consistent group, participants in their 20s at year-end 2009 had an averag 12% 12% e accou 12% 12% nt balance of $24,462, 150% offering company stock as an investment option, 2009 >10–20 Years Hewitt Associa -50% tes. How Well Are Employees Saving in 401(k) Plans: 2009 Hewitt Universe Benchmarks. Lincolnshire, IL: Among iAll ndivi 60s dual particip 32.3% ants, the al 36.6% 6.3%location of account 6.8% 6.2% 16.7% ba 6.9% lances to 6.2% equ 7.1% i19.9% ties (equity f 2.3% 9.8% unds, compa 2.0% 20.7%n 0.6% y stock, and t 15.7% 100% he Tenure (y participears ants, a and c ) s they ompany >20–30 do in stock the cross-sectio 17.1% nal database. 12.3% Young 1.2% 18.8% er participants or 14.9% 15.5% thos -26.4% e with shorter 23% 15.9% 26.4% job tenure t 67.0% ended to Figure 25, Average Asset Allocation of 401(k) A invested in 62 60s stocks; these funds inclNW, Suite 878 ude equ 28.3%ity mutual ccounts, by Plan Size , 5.2% Washington, DC funds, bank 6.5% , 20005-4051 a coll nd Investment Options ective trusts, life , (2 7.4% 02) 659-0670; f 2.9% insura .............................................. ax number, (202 nce separate accoun 32.6% ) 775-6312; 14.2% ts, and 29 60s from U.S. Department of Labor, Bureau of La 38.0% 26.0% 14. Lo3% an as19. a P 9% ercenta 14. ge 8% of bor Statistics, 5.2% 2007, 2008a, 2 2.6% Ag 7.008b, 2009, 20 1% e Grou 4. p9% 2. 10a, 2010b, an 0% 27.23% 8% d 2010c; and U 30.9% 10.7% .S. 11.8% Figure A10, Percent Change in allocation to Balanced fun 23 percent at a d year-en n , Note: “Funds” include mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investment product y other target-dat d 2008. alloc e fund, and ation. B Average Account Balances etwe non en -target-date year 23% -end 20 ba A 08 a mong 401(k) Participants Present From Year-End 1999 Through lanced fund u nd year-end 41% se varied som 2009, among t ewhat he 16. by age 7 million group amon 401(k) g A10), 46 retirement. A complete analysis of preparedness for retirement Note: The tenure variable is generally years working at current employer, and thus may overstate years of participation in the w All hile the S&P Al 50 l 0 total return i51,852 ndex fel 25.9% l 3 20%7.620,743,731 percent an would require estimating projected balances at retirement by d the 13.6% $1,210,414,818,938 Russell 2000 Index fe 60.5% ll 21. c,d c,d c,d 0 401(k) plan. percent $58,351 (Figure 8). Quarterly Supp For statistics i lementary Data 40% 40% ndicating the higher propensity of withdrawal ). s among participants in their 60s, see Holden and VanDerhei, Holden, U.S. Joint Co Sarah E E E mmittee on Ta quity quity quity , Jack Va F F Funds unds unds nDer xation. hei, Luis B B Bond ond ond F F FTech unds unds unds Alons ni cal Ex o C C C and Crai o o ompany mpany mpany planatio g C n of o pe H.R. lan T T Ta a arget-da rget-da rget-da d. 4, th “401(k) Plan ttte e ee “Pension N N Non-T on-T on-T Asset Allocation, Acc a a a Pro rge rge rgetttt- - -ection Act G G GIC IC ICs s s of and Money and Money and Money 200 ount Ba 6” as Pass lances FFFundsundsunds ed , and by balanc of the participants had fiv e, and salary. Of those part e or fewer icipa years nts of t in plans o enure an fferd ing lo 6 perc ans, the ent had more t highest perce han >5–30 years of ten 10 Year ntages o s f partiu cipants re. The m with e dian 200 See Figure A1 50 Asset Allocation and I 3– s 2009 co 1997 All consistent 79. nsistent gro 0% 4 in the Appendix for a detail 19985. n1 vestm % up 1999 increase ent Options 4.0% 2000 ad 31. ...................................................................................................................... 24 3. 9 p ed presentation of the cha 4% 2001 ercent. 1 2002 . 8% 2003 1.3% n2004 ging percenta 1.1% 2005 0. ges 5% o 2006 f acco 0.4 unt balance invested i % 2007 0.2008 3% 3. 2009 1% n bond Sep-10 In a Asset Allocation and Investment Options 13 given a 100% 100% ge group, longer tenur 28% 28% e tends to mean that a higher percentage of participants will have account balances compared 0–2 Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. Hewitt Associa with an avera >30 23% 23% 78. tes LLC, 20 g 0% e of $144,004 fo 15.9% 09a. 52. r partic 5% 10.9% ipants in t17.6% heir 7.5% 60s (Figure 13.8% 6). 3.5% -23.2% 20.6% 14.6%59.4% Of which: target-date funds e-m an opti ail: subscriptions@ebri.o on rg Membership Information: 60s AInquiries reg ll arding EBRI equity portion of ba primarily invested in the security indicated. lance Remai d n ifu ngnds) varies Ac count Balwi anc dely a e round2 th 0s 0.9% e average of 60 percent 40s 9.3% for all particip10.5% ants in the 2009 All Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. GICs are insur 54.1% 33.5% ance company Sour 10.1% ce: Tabul 29. ati8% ons products that guarantee from EBR 22.0% I/ICI Participant-D 7. ir8% ecta spe ed Retic reific ment 2.rate of ret 4% Plan Dat6. a Col 6% u lern on the inve ction Pr 2.4% oject. 1.9% sted capital over the life of the 10.1% 13.6% 18.6% 11.9% have smalle Year-End 2009, by r account balanc Age and es, whi Tenure le t .............................................................................................. hose who were ccc older or had longer job tenure tended to hav.............................. e higher account 56 Department of other Age poole Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. d in Labor, Employee Benefits Se vestments. Similarly, bond Perc cfunds u entage of A rity Administration, 2008a, 2008b, 2010a, a are any pool ccount Bed accou alance Invn es t primari ted in Cly inv ompany ested i nd 2010b. Stocn k bon ds. Balanced funds are partici recently a pants hire group wi d partici th account pants, a baln ances in d recently bot hir h years, the ed participper antcen s in th tages of eir 20s participants were more hol likely to ding eit be h hi er all ghl y or none concentrat of the edi in r Figure 26, Asset Allocation Distributi the House Loan Activity i 40 on July 2 n 2 a 007. 8 42.3% , 2 ” Inve 006,stment Compa and as Consi 6.9% on of 401(k) Account Balances to Sto Sto Sto 5.9% dnere c c c y Institute k k k d by th 13.5% e Pe Senate rspective F F F 4.9% unds unds unds on A Equity Funds, by P 14, u 12.6% gust 3, 20 no. date date date 3, and F F Funds unds unds 06 11.2% a rticipant Age . J EB C RI Issue O O O X-38 1.9% ttther her her -0 S S S6 tttable- able- able- Brie ................................ (Au 0.8% fg,ust 3 no. 100% 324 ). 30 Betwe also considerin en year-g retirement income from Soc end 2002 and year-end 2007 ial Security, de , the S&P 500 fined benefit pl total return in ans, IRAs, and dex climbed 8other DC plans 2.9 percent an , possibly from d the Russell 2000 2002. 100% 20% 30s 29a Minor investment options are not shown; therefore, row percentages will not add to 100 percent. Percentages are dollar-weighted The analysis includes the 0.4 million recently hired participants (those with two or fewer years of tenure) holding balanced averages. outstandin tenure >2–5 60 60s s at tg lo he 80. current an ba 9% lances employer was si All 70. 4.4 9% % were amo 3. 14.8% 3%nx ye g pa 40. ars in 2. rticipants 2% 9%9.9% 2009, c 1 in t .7% o hmpared w eir 3 15.2% 7. 0s, 4 10% .3%0ith s, o seven years r10.8% 1 50s .1% (Figure 4. 0. 5% in 5 -26.8% % 20 47). 08. In Th 0. additio 4e te % 21.7% nure com n, part 0.3% 19. icipa 2% posit 43.5% n 3. ts with ion in 0% funds greater Asset Allocation by Investme among t than 20% $h100, e 16.7 million 401(k) particip 000. For example, nt Option membership and/or contributions to EBRI-ERF 16 s and pe an rcent o Age, Salary, a ts with account balances i f particip nants d Plan in th Size eir n .......................................................................... 26 the EBRI/ICI 401(k) database 60s with should be directed to EBRI President/ASEC five to 10 years of t at year-end 20 enure had acc 08 and ount Minor investment options are not shown; therefore, row percenta Equity, bond, money, and/or balanced funds, ges will not add to 100 percent. Percentages are dollar-weighted averages. Source: Tabulations from E 401(K) PARTI See Figure A4 Sources: $0 Bloomberg, Barclays Global CIin the Appendi B PANTS CON REBRI/ICI I/IC Zer I Po a ( rticipant-D No T LI oa xN for the avera Investors, Frank Russell irected R n) UED TO etirement SEEK DI ge dollar-we Plan D Company, and VERSIF ata C8 o7% llection P igh ICATI tStandard & Poor' ed asset allocation of the 2003–2009 consis rON oject. OF TH 75% s. EIR IN 8VESTMENTS: 8% 79% The share o tent group of c c c f 401(k) Note: The median account balance at year-end 2009 was $17,794. 43 The investment optio database. a Thirty-nine 30% n percen s that a t of plan partici spons pan or offers sign ts had moreifican thantly a 80 perc ffect Balanced Balanced Balanced en how t of participa Funds Funds Funds their acco nts allocate their 401(k) assets. unt balances invested in equities, contract. balances. For EBRI/ICI 401(k) example, within the 1999–2009 consistent group, participants in t >2–5 Yearsheir 30s at year Vl V Value F alue FF -e unds unds nd 20 d 09 had an pooled Group accou Zn er ts o inves1– ted 10% in both s 11–20% tocks an 21–30% d bonds. 31–40% They are classified 41–50% into 51–60% two sub 61–70% categories: 71–80% target-dat 81–90% e funds and 91–100% Figure A11, Average Asset Allocation of 401(k) Acco 3 Washin (Dec A target-date fund typically rebalances its portfolio to become less focused on growth and more focused on income as it approac emb gton, er 20 DC: U.S. Joi 08). funds i n 1998; Availa tble n he 1. t Committe at 4 m ww illion re wce .ic e nit o . ly h org/ n Ta iredpd punts of 1999–2009 Co xation, artici f/p pant er1 s 20 hol 4-03.p di06. Avai ng bal danc f an ed f labl d unds nsistent Grou www.ebri.org/pdf/bri e a in 2006; t ww tw.jct.gov he 2.0 m p, by Partic illion re /x- ce38 nefs tly h -0 ipant Age p ire 6.p ddf /EB df RI hes and ..................... _IB_12a- .. 57 a account such fu 1 nds. balan Focr exam es in >5–10 any ple,par 43 ticular i percent of rec 41.7% nvestmeent o ntly h 28.5% ption ired par weret littl icipants 28.9% e change in thd eir 20s h 21.0% (Figure 2 eld m 0, l -31.9% o ower re than pan 90 el). 49.6% percent For exam of t189.4% h ple, eir at Index more th previous employment. For references to such research, see >5–10 a an doubl 71. ed. 4% The aver bage ac 29. count 4% balance among t Holden and Va 5.3%he 19nDerhei, 2005. 99–2009 17. consi 2% For stent grou an analysi p os of the possible f partic 19. ipants 6% All indexes are set to 100 in December 1996. Chairman Dallas Salisbury at the above address, (202) 659-0670; e-mail: salisbury@ebri.org The analysis is based on samples of 1.2 m 63 Factors That Affect 401(k) Participants’ Account Balances Figure 27, Asset Allocation Distribution of See Brady, Holden, and . Trends and Ex Short, 2010. perie illion participants with two or nce in 40401(k) Participant Account Balance to Equity 1(k) Plans fewer years of tenure in 1998 and 3.1 million particip . Lincolnshire, IL: Hewitt Associates LLC, 2 Funds, by Participant Age, Tenure ants w0 ith tw 09. Avai o or fewlabl er years of tenure i e at , n 2009. five or the year A A tar ll g fe et-date fund t -e wer nd 7 y 9. 200 e 8% ars of t ypicall 9 e database is similar y rebalances its portfolio to become less focused on 4. enur 7%e or w 3.i6% th mor to e the te 3. than 0%nure 30 y co 1 e.ars 5% mposition o >5–10 Year of ten growth and more focused on income as it approaches and 1.u 1% ref wer tshe year e1 less lik .0%-end ely to 2 0. 008 5% use th databas 0. e lo 4% e, an but provision tha the passes the target date 0.3% tenure 4. n0% other year-end 2009. Distribution and c of Equ ompany 1– ity Fu s 10% tockn , and GIC d Allocation s and/or s and Participant Expo 2% sure to Equ 7% ities 30s.................................................. 5% 6% ................. 26 balances in excess of $100,000 in 2009 (Figure 15). However, 43 percent of participants in their 60s with between participants by accounts inv At year-end 2 2 Database ested i age. In addition, as 009,62 percent of balanced m par n com ticipantp s hol andi y stock continued ng balobserved anced funds iin the cross-sectional EBRI n 2007; utual fu to shrink, the 2. nd asse 4 millio nfallin re ts ce were invested in equities (see Investment ng tly h by h ired p/IC a artici lf Iof a pant 401(k) datab s hol perc ding bal enta anc g aed f se, among ind e poi undsnt 32% in 2008; (to 9.2 and ividual 401(k) perc Company Institute, ent) in 2009. 40.6% 9.5% 7.2% 11.4% 5.3% 12.6% 9.2% 2.7% 1.6% 100% Fig Year-End 2009 Snapshot of 401(k) Participants’ Account B while ure 1 The passes the target date of the fund, which is usually included in the fund’s name. 22 3 S&P 500 is perc pres eents nt he 2003 an index of the ld no dis 500 stocks equ tribution ities at a 2004 chosen for of pla ll in market size, n2 s,009 partici 2005 (Fi liquidity, and g pure ants 3, 0and assets by four ). industry group 2006 representation. 2007 combinations of alances 2008 investment of 2009 ferings. The 200 20s8.pd 67. f 7% >10–20 6.2% 5 22.5% .0% 4.3% 21% 16.2% 3.2% 20.1%6.1% 14.5% 1.8% 0. -34.3% 8% 0. 22% 6% 40.0% 0.4% 80.1%3.8% b 14 average >10–20 accou 50% 20 nt balance 67.8% of $64,688, com 22. pare 9%d with an average 5.4% of $162,522 for 22. par 0% ticipants in t 22%heir 60s 17. (Fi 5% gure A9). non-target-dat 50% e balanced funds. A target-date fund pursues a long-term investment 53% strategy, using a mix of asset account year-end 2008, balan$0 ces in 40.2 percent balanced f of unds, these parti compared cipants hel with Investment Category Investment Category 3d 4 n percent o equity f of r un ece ds. At year nt hires in -en thei d 200 r 40s 9, and 3 38.5 p1e rcent cont percent of r inu ece ednt to Minor investment options are of the fund, which is usually included in the fund’s name. www.retirem or Salary ..................................................................................................................... entmadesimpler.org/Li not shown; therefore, row percentages will not brary/Hewitt_Resear add to 100 percent. P ch_Trends erc_ entages are dollar-weighted in_401k_Highlights.pdf .............................................. averages. 32 Figure A12, Asset Allocati increase impact of automatic increases in partic Other stable v So ur 31999 c ce: T d 1 abulat 27.io 6 p a 2000 ns lue fun e frrcent o m Eds include synt Bon to Equities Varied Widel b Re I2001 /It Cw I P een artic year ipant ipants’ 2002 hetic GICs, --en Dired ct contribution rates in automatic 2 ed R 024% 0 et 2 2003 which consist i a rem y Among Participants nd ent ye P lar-en an2004 Datd a C of a portfolio 20 o llec 07 ti2005 o (Fig in th n P rure A o enrollment plans, see Va jec e 1999–2009 Consiste of fixed-inc t. 12006 0). In 2 ome 008, securities 2007 as th nt Group nD e S&P erhei, 2010 an “wrapped” with a 2008 500 ................... total 2009 return d .. 57 th> e 1 1.0% 9 millio –2n 0% recently hired participants in 2009. 2% 6% 2% 4% The Russell Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. other 2000 Index stable vameasures the lue funds performance of the 2,000 smallest U.S. companies (based 1.8% on total 30.2% market capitalization) inc38.8% luded in the Russell 3000 Index partici 4 distributio p GICs are guaranteed investment contracts. ants. O n of 200 nly 1 20%7, 6 200 perce 8, a ntnd of 20 partici 09 sho pant ws an in s with account crease in bala lownces o er-tenur f led partici ess than $ pant 10,s 0 00 comp had loans ared with outstandin 2006 ang. d earlier. 20 a In any Distribu nd 30 yea given y tion of Participan r es of tenure with their cu ar, the chan >20–30 ts’ ge in Bala a partici n 14.9% ced Fu rrn en p dant’s accou All t employ o 10.1% cationer h s by nt a balanc Age d accou 15.1% ................................................................ e is t nt bala he sum of th 10.3% nces greater ree factors: 0–2 Year -27.3% than s $100,000. 20.2% Th ....................... 26 e perce 40.3% ntage 47c 22% a participants in the 2003–2009 Quarterly Supp That co >20–30ntinued lementary Data a steady 60.9% dec consistent grou line t ). hat starte 16. d p, the allocation of account balances 6% in 1999. Rec 20s ently 5. h 9% ired 401(k) partici to equities varied widely around the 21.p 8% ants contributed to this tren 16.6% d: They Holden, VanD The Employee 30s erhei, Sarah a Ja 63.ck L. , Jack Va 8% Benefit Research Institute (EBR Company Stock in 401( 17% 8. nDer 0% hei, a 6n .5% d Carol Quick. “401(k k) Plans: 5.4% I) is a no Res 3.npro 8% ults of a Su ) Plan fit, no Asset Allo 4. npartisan, 9% rvey of ISCEBS M cation, Accou 2.0% public policy 0. e9% n mbers research o t Bala. Wash nces, a 0.7% rgaington, nizatio nd Loan 0.5% n DC: that d Activi oty in 3. es no 6% t firs aGICs are t cate Editorial Bo gory i guaranteed investment contracts. ard: s the Dallas L b base. Salisbur group, ywhic , publisher h con ; Stephen Blakely sists of plans , editor that do . Any not o views fexpr fer compa essed in this p ny st ublicat ock, GICs, or ion and those o other stabl f the authore s sho -value uld Participants in (which tracks the 3,000 their 20s hold approximately 2 percent of th largest U.S. companies). a e total assets in the 2009 EBRI/ICI 401(k) database; participants A target-date fund typi classes, or asset allocation, that the The analy d Row percentages may not add to 100 percent because of rounding. Percentages are dollar-weighted averages. sis inc cal lu ly des rebal the 20. ances i 7 m ts portfol illion 401 io(k to become ) plan part fund provid le icss focused on grow ipants er in tad hejusts to b year-end 200 th and more focused on i e9 com EB Re I/ less fo ICI 401(k) dat n cuse come as i abd on g ase.t approac rowth and hes and passes the target date of the fund, more focused on Source: Tabulations Source: Tabulations Row per from from c EBRI/ICI EBRI/ICI entages mParticipant-Directed Participant-Directed ay not add to 100 percent Retirement Retirement because of r Plan Data Collection Plan Data Collection oundi 25% ng. Project. Project. hires in hold no e th 10% qeir uity 6 fun 0s in d1996 20 s, but 09 (Fi 1997 1.7 percent gure1998 38). of Con 1999 participants centrate 2000d tar we 2001 gre et-d hol 2002 atde infun g 2003 equ d uis ty fun e ranged fro 2004ds at 2005 yem ar-en 33 percent 2006d 20 2007 09 w of rec h2008 en teh nt ey 2009 hires had in t held heir inde Definition of 401(k) Account Balance guarantee (typi VanDer x fell hei and Because few plans fall into this category, these percentages may be heavily influenced by a few outliers. 37.0 Of w perc c Lucas, 2010. F ally by an ins ent h >i2 ch: tar 0–3 and t 0% get- u he R o date funds rance company r a discussion of the variety ussell an opti 2000 In o or a bank) to pr n dex fell 33 2% of fact 1.4% .8 percent, ovide benefit payments ors (e.g., taxes, savings, mort 4% the avera 20.3% g 1% e acc according to the plan at book val ount balanc 3 gages, children) that impact % 26.9% e among the 1999– ue. Figure 28, Percentage of 401( >30 k) Plan Participants Without Equi 10.4% 5.9% 12.0% ty Fund Balances Who Have Eq 8.3% -22.5%uity Exposure, by Participant 12.3% 23.4% 4 Figure A13, Changes in Consi Although >30 the b database 55. do 9% es not cont stent Partic ain ipants' Inve in 13. formation o 6% stmen n tauto in Equity Fun matic enr 5.4% ds, 2008–2009 ollment, it is likely that 23.0% ...................................................... automatic enro 13.9% llment is 58 Distributio b not be Formerly the ascribed to the officers, n of Participants’ Balanced Fund Allocations b Lehman Brothers U.S. trust Aggregate Bond Index, ees, members, or the Barclays other sponsors of the E Capital U.S. Aggregate Bond Index mploye y Age e Benefit Research is composed of Institute, the EBRI Educ securities covering government and ation and increases to Note: "Funds" include mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investment product Distribu Employee 199 40s a a 8.” tion Invest 63. 49 percent of Participan 0% Ben ment Com efit Research 8. for 2% ts’ partici p Co anmpan I y Institute 6n p .5% stitute, 2 ants i y Stn ock th Per 5.6% 0Alloca eir 02 s 60s wit .pective Available at tion4. s by Age 0% h 9, no. more t www.ebri.org/pdf/iscebs.pdf 5 ................................................................ 4. (Jan han 5%uary20 30 years of ten 2.2% 00), and u 1. EB re. 0% RI Issue Br primarily invested in the 0.7% ief, no...................... 31 . 21 0.5% 8 (Febr 4. u0% ary which i average of 61 C tende sh usual ang dly to e is in ncl be l Age group is based on the participant's age at year-end 2009. Asset allocation by age group among the 2003–2009 consistent gro uded i 0% 0Particip percent for the consistent group as a whole. ess likely to n the fund’ 11 ants’ Account s name. hold employer Bal stock. ances in the 1999–20 Thirty-eight percent of partici 09 C 27% onsistent Group pants in the co up of 4.3 million nsistent group had 64 lobby or take positi Ro wMinor Minor percent invest invest agesment ment maon Not y no opt opt s on e:t “ add up t ions ions Bal legislative proposals. anc ar ared f e not e not o 1 unds 00 shown; shown; 24% p ” i erc nclent ude m t t her her bec utef ef ual aus or or f e, e, unds e o per per f ro , bank cent cent unding. c ages ages ollect ido not do not ve trust sadd add , life it tns o o ur 100 per 100 per ance separ cent cent at. .e ac Per Per cc c ount ent entsages ages , and any ar are e pool dollar dollar ed - -w weight eighted ed aver avera ages. ges. funds. Thirty c percent of44 participants in the 2009 database were in these plans, which generally offer equity funds, bond in their 30s hold about 12 per a . How Well Are Employe cent; participants in their 40s es Saving and Investing ho in ld 29 percent; participants in their 50s ho 401(k) Plans: 2010 Hewitt Universe Benc ld 41 percent; hmarks. and Source: T Note: “Funds” include mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investment product abulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. primarily invested income over For an analysi corporate bonds, mortgage-backed securities, and time. 10% s of contribution acti Non-target-date vity durin balance asset-backed g the bear mar d funds securities include asset allo index (rebalanced monthly by ket of 2000–20 cat02 us ion or market ing the cr hybri capitalization). d foss-sectional EBRI/ICI 401(k) unds, i The n a index' ddit s total ion to tar return consists of get-date price 20s hol none at All Age and d year inAl g m l -end 20 Te onur re than e, >08. 2009 30–8 90 Con 0% .......................................................................................................... per-ce versely, the nt of the as ir account set allocation bala 5% nc 100% tes in o equity f target-date 8% unds chan 100% funge 3% ds to d for 1825 4.perc 7 percent 7% ent o ..................................... 100% f of recently 401(k) pa hired rticipants 32 d All 401(k) plan participants with account balances at the end of each year from 2003 through 2009. All 70.9% 20.0% 36.9% 14.7% 20.4% 6.0% 15.7% 11.6% -27.8% 31.9% 16.4%82.4% 200 replacement ra 9 Resear b b co Snsistent ource: Tabul ch Fund, tes, see Brady, 2008. For an an or gro ati their ons up staffs. from of pa E Nothin Brticipants decr RI/ICI P g her articeiin is to be co pant-Deased 2 irecte alysis of the i d nstr Re 5 ti ued as an attem . rement 3 percen m Plpact of chan an D t. As the s apta t to aid or Collectiges in Social Security between 1992 a on t hi ock market ro P nder roject. the adoption se in of any 2009, pending le the avera gislation, ngd 20 re acc egulation, 04 on ount 15security indicated. a ? New contributions by the participant or the employer or both; GICIn any s are guaranteed i a Includes Includes given y 0% the 16.7 million partici the 16.7 million partici nvestment contracts. ear, the EBRI/ICI 401(k) dat investment produc pants with pants with t primarily inv accounts at accounts at ested i abase n a m 17% ix the end of each the end of each provides a of equities and fsnapshot ixed- year from year from income s o ec 2008 2008 f ur the ities thr thr . 4 ough 2009. A ough 2009. A 01(k) account given par given par balanc 16% ticipant may ticipant may es across all be be count count aed ed ctive playin A t200 50s arget g a 0). -dat role Availa e 62. fund t in bringing in 4%yb pic le at ally8. rebalanc w 8% ww.ici. newly es itorg/ 6 s. po hir 7% rt pdf ed foli/ oworkers, whic p ter0 o5.5% bec 6o -01. me les pdsf 3. fh l an o 9% cus o d wers th ed o www.e n gro 4.2% e average t b wtri.org h and m /p 2.2% odf/ re fe o bnur cri us efsp ed o e. 1. df n inc 0% /0o 200i me as b.p it 0. 16% appr d 7% f o aches 0.5% and passes t 4. he 2% Figure A14, Changes in Consi Account balances are participant stent Partic account balanc ipants' Inve es held in 401( stment in k) plans at the Bond Fund participants s, 2008–2009 ' current empl ........................................... oyers and are net of plan loans. Reti............ rement 58 Sour Some recordkeepers supplyi Asset Allocation of Recently Hired Participants c appreciation/depreciation plus income e: T in the security indicated. abul c ations from EBRI/ICI Par ng data were u tas a icipant- percentage of aDirected nReti able to provide comp the 12% .............................................................................................................. 31 original investment. rement Plan Data Colllete asset allocati ection Project. on detail on certain pooled asset classes more than 80 Individual 12 401 percent of their accounts inve (k) partic <100 participants 13% ipants’ asset allocat 100–500 stion to ed in equities, while almost 12 percent balanced funds 501–1,000 varies widely1,001–5,000 aroun held d an no equities at a average of 17 >5,000 ll in 2009 (see Figur percent (Figure e Average Loan Balances 5 Lincolnshire, IL: Hewitt 10% Associates LLC, 2010. 20s funds, money A target-date fund typically rebalances its portfolio to become less focused on growth and more focused on income as it approac funds, and balanced funds as investment options. Another 24 percent of participants hes were in plans that Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. In any participants in their 60s hold the rema Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. or interpretative given y Note: Components Of w ear, the cha rule, or as h >i8 cmay h: tar 0% legal, not add to 100 get date funds nge in acco a unting, partici ining 17 percent of the total assets. percent an opti actuarial, o pbecause ant’s accou on r other such prof of roundi n1% t ng. bala The tenure vari essional advice. nce is t 1% he abl sum of three e is general *ly years w factors: new orki1 ng at 9% % current empl contributio oyer, and ns by the funds. database, see Compa Holden and Va ny stock is enDerhei, 2004c quity in the pla . The an n’s sponsor alysis f (t76.9% he em ound th pl at over oyer).all 401(k) participants’ Money 71.3% funds consist of thos contribution rates were little 71.2% e funds designed to The Investme in multiple in multiple investment investment nt Company Institute (ICI) is categor categories. For ies. For example, a example, a the national ass par participant ticipant who is 100 percent who is 100 percent ociation of U.S. invest invested invested in in equities will equities will ment companies, including mutual f be be counted counted as as <0.5% "none" "none" in in each of each of unds, from hol partici a targetp da ants i d tein og f tn he f e their quity und, w 60s wit fun h0 to ich is d2s at ush ually that co year-en included in t ncentr d >2–5 20 he f 08 ation. In u to hol nd’ s nam d addit in e.>5–10 g no ion, at y ne at year ear-end -en >10–20 d 2 2009, 009. On 42 percent n >20–30 et, the of t perc hent e account age o >30 f partici balances of pants Note: “Funds” i balanc PARTI retirement patterns, see Gust savingsC e amon n hel I cl S PANTS’ 401(K) LOAN ACTI ude mutual ource: Tabul d in plg th ans funds, bank col at pr e 1 ations 9 ev 9 ious 9 from –2 empl 0 E man an 09 co B le R cti oy I/IC ver e trusts, l I P s nsistent d Stein or a VI rti rc ol TY ROSE I ipant-D lied ov fe meier, 2008. ingroup incr surance separate accounts, and any pool er irecte into IRAs d N 2009: Retirement e ar ased e not i In 2 P2 lan D nc 30 . luded. 3 0a9 ta perce , 2 C o1 ll epercent nt. Th ction ed i Proj e nvestment product ect. of a 1999– ll 4200 01(k 9 co ) pri partici m nsistent gro arily ip nvested i ants eli up’s n the securi gibl ave e for rage ty i loans ndicated. Figure 29, Average Asset Allocation Relationship Betw VanD Ac a count erhei, bal Ja ancck, and Crai es are partieen cipant g Copelan Account Ba account for 401(k) Plan Participants Without bal d. anc “T es h e hel lances and Salary Impa d in 401( ct of k) P plans PA on at the Retir par tic e ipants m Equity Fund Bala ent Savi ' current ngs emplfo oyr 40 er nces, by Participant Age s and ar 1(k) e net Partic of pl ipants.” an loans. Reti EBRI Issue rement 60s and passes the target date of the fund, which is usually included in the fund's name. 59.5% 10.3% 7.0% 5.0% 3.8% 4% 3.8% 2.3% 1.2% 0.8% 0.9% 5.4% a participants’ accounts. The database contains only the account balances held in the 401(k) plans at participants’ current The analysis is based on a sample of 4.3 million participants with account balances at the end of each year from 2003 through thus may overstate years of participation in the 401(k) plan. 2009. for one or mor Source: Tabulations from EBRI/ICI 401(k) Participant-Directed Retirement Plan Data Collection Project. e of their clients. The final EB 0% So urce: Tabulations from EBRI/ICI 401(k) data RI/ICI P articipant-Direc base includ ted Retirement es only plans f P lan Data Co llec or which at least 90 percent of all p tion P roject. lan Components may not add to the total in the first column because of rounding. Year-End 2009 Snaps A5). b 0% hot of 401(k) Plan Loan Activity........................................................................................................ 34 13 20, to t the he p ot ot pane d her her invest invest l). For ment ment exam cat categor egor ple, ies. ies. half of participants held no balanced funds, while 22 percent of participants held more offer The analy GICs *As an ccount is isd other bas bal ed ances are parti on a s stable ample of 4.3 -vci alue pant account bal fun million par ds as ances tic an inv ipants hel w estment d i ith n 401(k) account option, pl ans balanc at the parti es in at the end addition to t cipants' of eac current empl h y he “base” o ear fr oyers om 2003 thr and are ptions. ough net of Alternatively, 20 plan l 09.oans. partici sav Noings te:p “ ant or hel Funds d in pl ” inc the em ans lude m at prut ployer ev ual f ious un empl ds or both; , bank oyers c o or total i ll r ec oltlied ov ve tn rus vestment r ert s into IRAs , life insuranc ar ee not i turn on e separat ncluded. accou e ac count nt bala s, and an nces, y poowh led inv ich edepen stment pro ds o duc nt the prim perform arily invested ance o in f Among 48 b partici GICs are guaranteed investment contracts. a pants with outstanding 401(k) loans at the end of 2009, the average unpaid balance was $7,346, changed in 2 maintain ? Total i a sta n00 vestment ret b 0, 2001, and 2 le share pric urn e. Sta 002 when compared with 199 on account ble valubalan e prod ces, whic ucts, such as h 9. Whet Years of depen guarant Tenure d her measured in dollar amounts or percentage of salary s one the ed investmen performance t contracts of financia (GIl mar Cs) k an ets and on t d other stable he clo holdin recently sed- or T g end funds, hire no e enurq d e uity fu ..................................................................................................................... partici Cons exchange- istent G nds pants i roup in 2003 edged n traded fu their up only sli 20 nds ( EBRI/ICI 401( s was E gTFs) htly, from investe k), and unit i Databas d i 40. e in n b 2003 alanc 2 percent nvestme ed Cons fnt trus un to isd tent G s, compare 43 ts (UITs). ICI s .2 roup in 2009 percent d wit beEBRI/ICI 401( tween h 3 eeks to 6 ............................................ perce year enco k) nt i Databas -en urage adhere n 2 d 2 e in 008, 00 2009 8 a 2n 8d ye nce percent i ar-en to high 33 d n Investment Co had a Age and tenure groups are based on participant age and tenure at year-end 2009. Brief c c loa,n out no. 31 s mpany I tanding 8 (Employe n a stitut gain e B s e. t their eQuart nefit40 Researc erly S 1(k)u account, ppl h Institute, ementa com ry Jun p Data are e 2 d . Washin 0 with 08).18 Avail gton, DC: perce able nt at at Inves yeart-en ment Com d 2008 a pa nn d year y Institute. -end 20 07. b balanc See end Ale l atn A target-date fund typically rebalances its portfolio to become less focused on growth and more focused on income as it approac yea ote 11 for additional detail on target-date funds. 64.5% Cons r-en isd tent G 200 7. roup in 1999 7% 9 was up 95. 6.0% EBRI/ICI 401( 0 perc 5.1% ent k) Databas comp e in are 3.7% 1999 d with y Cons 5. e0% ar-end istent Gr oup in 2009 199 2.0% 9; over th 0. EBRI/ICI 401( 9% e 10-yea k0. ) Databas r 6% peri hes od, the e in 2009 0.5% averag 3. e 9% 40 Not Not all all par part tiicipant cipant0 s s * – L ar ar2> es e of e of s th f fLess Than e e ar r ned t ed t 0.5 perc h his invest is invest $10,000 en2 t.–5> ment ment opt option. ion. See See 5Figur Figur –10>$e 22. e 22. 40,00 0–$50,000 >10–20 >20 More Than –30 $100,000 >30 employers a b R e etirement savi nd reflects t ngs hel hd i e n entrance of ne plans at previous em w plans an ployers or rol d n led over ew partici into IRAp s are not i ants and the exit ncluded. of participants who retire or change A target-date fund typically rebalances its portfolio to become less focused on growth and more focused on income as it approa Holden, Participa Sarah nts’ account . 1996 Define 1997 balanc d Cont es vary not 1998 ribution 1999 Pla on n 2000 P ly with articipants’ Ac 2001 age an 2002 d te tivities: Fi nure, 2003 but rst H 2004 also with alf 201 20050 salar . Was 2006 yhington, . Fi ches and passes the target date of the fund, gure 16 reports the acco 2007 DC: 2008 Investment Co 2009 mpany unt tT hhe analy e securits yi indic s is bas ated. ed on a group of 1.6 million participants with account balances at the end of each year from 1999 through 2009. assets could be identified. The tende EBRI Issu The year-end 2009 EBRI/ICI 401(k) database represents 20.7 million 401(k) participants. n e cy Brief of the account balance-to-sala is registered in the U.S. Patent and T ry ratio to peak at rademark Office. ISSN: 0887 higher salar ?137X/90 y levels and then 0887 ?137X/90 $ . fall off likely 50+.50 reflects the than 30 Availability and 80 perc 14 ent of Use of 401(k) their accounts in Plan Loans balan by ced Plan Si funds in ze ........................................................................ 2009 (Figure 31). At year-end 2009, half of 40 .......................... 34 1(k) participants Changes in 401(k) Participan Source: Tabulations from EBRI/ICI Participant-ts’ Accou Directed Retirement Plan nt Balances Data Collection Project. 53 16 perc d d ent o and passes the target date of the fund, which is usually included in the fund’s name. f participants were in plans that offer company stock, but no stable-value products, while the remaining financi compare al mark d with ets and on $7,19 No 1t in e: C the t oh lum e allocation year n perc-en entad ges 20 of m 08 data assets in an ay not add base (Figure 48 to 10 0 perc individual’s a ent becau ). Th scco e oe f unt; an ro me unding. dian d loan with drawals, balance borro outstandin wing,g was $3 and loan ,972 at contributed, on value fun See total returns for the large So ww u GI GI rcCs ar Cs ar w.ebr e: N d o Tte: The sampl s, abu e guar e guar i.org a lat average, 401( re reported as ioant ant ns /pdf feed eed re o m /b of parti invest invest EB riefs Rci I/ment ment p pants k) participants ICd one category. Th I company st P f/ art ebri cont cont changes icip r r_ib act act ants. s. _06 -D over irec ’ contribution b ock index reported in Morningst -2 titme. ed 0087. Re oth etirem pde f ent r cat P ehavior does n lan D egory is ata Co the residual llectio on P t appear to ar, 2010. ro ject. for ot have been materi her investments, ally affected by such as real the ethical standar allocation o ds, promote public understand f assets in an individual’s accou ing, and otherwise ad nt; and vance the interests of funds, their shareholders, directors, which is usually included in the fund' 200 2009 (F 7, S24 our igur cperc ese 20, : Tabulat ent i lo n 2 ions wer 0 fr0 om pa s name. 6, E n1 B el). 9 R p I/IC ercent I Partic in ipant 2 -Direct 005, an ed Ret d a Num irement b ber ou of t 7 Plan Dat Parperc ticipant ent a a Collect s in Plan mion Project ong that a , Cerulli Associat ge group in es. 1998 (Figure 39). At Figure 30, Asset Allocati account Loans outstanding amou balance grew at a on to nte n d annual Equities to 15 percen avera Varied Widely Am gt of t e rate h of e r 6.9 emai ong Partic percent. ning account ipants....................................................... balance, on average, at year-end 200 ...................... 9, compared 36 49 Institute, Note: "Funds" include mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investment product Sour b ce: Tabulations 2010. Availa form ble EBRI/ICI at ww Partw.ici.or icipant-Direc g/pdf/ppr_1 ted Retirement Plan Size of 0_rData ec Account _survey-q2.pdf Collect ion Pr Balance oject. primarily invested in Note: The Tenure variable is generally years working at current employer, and thus may overstate 52 years of participation in the 401(k) plan. jobs. Retirem balanc es of loe nger nt savings -tenured helpartici d in plans at pants at previous em their current plo em Years of yer ploy s or roll Tenure ers’ 4 ed 01over into (k) plans IRAs are . Retireme not i nt savin nclud ged s hel in t d h at pre e data vious base. Sour GICs are guaranteed investment contracts. ce: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Salary Range Data Collection Project. influence of two competing forces. First For year-end 2008 data, see a Holden, VanDe , empirical research rhei, and Alonso, 2009. suggests that higher earners tend to contribute higher 16 Not Note: e: “ “Funds” Funds” include include mut mutual ual f funds unds, bank collect bank collective ive t tr rust usts s, lif life e iinsur nsurance ance s separ eparat ate e account accounts s, and and any any pooled invest pooled 15 investment ment pr produ oduct ct primarily primarily held 401(k) Plan Lo T ba he analy lance sisd in funds, clud an Activity Vari es t similar he 1.3 millio to 51 n part es with Particip p icie pant rcent s wit h t of pa want Age, Tenur o orticip r fewer ants at year years o fe, Account tenure -e in 2009 and in nd 2 Bal 008. ance, an p At year lans o d Salary ffering -end co.................................... m20 pan 09, y stobala ck as nced fu an investnd use men........ 34 t o p by tio n. 30 percent o the security indicated. Note: f T partici he EBRI/ICI pants 401(kwere o ) databasffer e contains ed bo 15.0 th compa million 401(kn ) y st plan ock an participants d stable at year-end 2003 and 20.7 -value product million s, in a at yeardditio -end 2009. n to the base options. Note: “Funds” include mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investment product repayments. The . “Am c ericans change Committed to in any individual partici Saving for Ret pant’s a irement: ccount ICI Y balanc ear-En e is i d Data. nflue”nce News Rel d by t primarily invested in the security indicated. The he ma ease (A gnit pril udes o 26, 2010). f these three year-en As a cross-section, or snap For 401(k) asset figures, see d 2009, compared wi shth $ ot, of t Brady, Holden, and Short, 2010. 3,88 h9 e ent in tihe year re population -end 2008 of 40 data 1(k) p base. lan p Wit arti h acco cipanunt ts, th balanc e datab es gene ase in rally hi cludes 40 ghe1( r on k) bear market in estate funds. Note: The equities from 2000 through 20 The EBRI/ICI final cat 401( ekgory, unk ) database contains now 10.3 n, consists of 02. million 401(k) plan funds th participants at coul at yeard not -end 1999 and 20.7 be identi million fied. at y ear-end 2009. year-en and advisers. Members of IC d 2009, among receI manage total ntly hired partic assets of $12.05 tril ipants in their 20s, tar lion and se get-da rve more than te funds acco90 mi unted llion shareholders (see Bogdan, for 75 percent of their with16 perc Column percentages may not add to 100 percent because of rounding. ent at year-end 2008. Loan amounts remained in line with the past few years in terms of typical dollar invested in The Sour cSour tons he c is c secur e: Tabulations tent gr e: Tabulations it oup c y indicat ons fr fr om is om ed. ts of EBRI/ICI EBRI/ICI 4.3 million Par Par tic 401( tic ipant- ipant- k) plan par D D irir ec ec ted ted tic Retir Retir ipants ement Plan ement Plan with account balanc Data Data Collec Collec es tion Pr tion Pr at the end ojec ojec t.t.of each year from 2003 through 2009. Furthe Figure 31, Asset Allocati b rmore, account balan on Distribution of 401(k) Part ces are net of unpaid loan balanc icipant Account Balance to es. Because of all Balanced Fund these factors, it is not correct s, by Age ...................... to ....... 36 employers or Sour Sour ce: Tabulations ce: Tabulations amounts rolled over to IRAs from from EBRI/ICI EBRI/ICI Par Par ticipant- ticipant- DirD ec ir are not i ec ted ted Retir Retir ement Plan ement Plan ncludData ed Data in t Collec Collec hte a ion Pr tion Pr nojec alojec ysis. To capt t. t. ure as long a savings history as tenure variable is generally years working at current employer, and thus may overstate years of participation in the 401(k) pla Ro w percT ent he ages consis m tent gr ay no oup c t add ons up t istso of 1 00 perc 1.6 million ent 401( bec k) au plan par se o f ro ticiunding. pants with account balances at the end of each yn. ear from 1999 through 2009. 50 percentages of Sour salary; therefo ce: Tabulations from the EBRI/ICI re, one would 401(k) Par expect the ratio of account balance to sa ticipant-Directed Retirement Plan Data Collection Projec lary to rise with salary. However, tax t. Available at www.ici.org/pressroom/news/10_news_trow_am_saves ? Average L Withdrawa oan ls, borrowi Balances ......................................................................................................... ng, and loan repayments. ...................................... 34 Note: Percentages may not add to 100 percent because of rounding. factors relativ partici average For year-end 2007 data, see pants inComponents 2w 0e 09 com h to th o are may e starti youn p not add to 100 per ared g n with and g acco Holden, VanDe individua 20c08, unt ent bec the ba aus llance. s ratio o e of r who a rhei, et al., 200 ounding. For fre thexa new e lo m an to thei ple, 8. outstan a r jobs, contri dinbution g to t as well h of e as older part remai a give ning account n dollar icipants amo unt produc balanc and te e hose wh des a ged dow o larger have n Note: Note: The tenur The tenur e v e v ariar able iable is gener is gener ally ally year year s wor s wor king at c king at c urrur ent rent employ employ er, er and , and thus thus may may ov ov ers er tate y state ear year s of s of par particitic pation ipation in the in the 401( 401( k) plan. k) plan. Sabelhaus, and Schrass, 2010 © 2010, Emplo ). yee Benefit Research Institute ?Education and Research Fund. All rights reserved. balanced fu Components nd assets, or 3 may not add to 100 per 1 percent of cent bec the aus ir account e of rounding. balances overall. The increase in asset allocation to balanced funds amounts. ebr ebr ebr ebr ebr ebr ebr ebr ebr ebr ebr ebr A ebr ebr ebr ebr ebr ebr ebr ebr ebr ebr ebr ebr ebr res i.o i.o i.o i.o i.o i.o i.o i.o i.o i.o i.o i.o i.o i.o i.o i.o i.o i.o i.o i.o i.o i.o i.o i.o i.oe ebri.org Issue Brief • November ebri.org Issue Brief • November ebri.org Issue Brief • November ebri.org Issue Brief • November ebri.org Issue Brief • November ebri.org Issue Brief • November ebri.org Issue Brief • November ebri.org Issue Brief • November ebri.org Issue Brief • November ebri.org Issue Brief • November ebri.org Issue Brief • November ebri.org ebri.org Issue Brief • November ebri.org Issue Brief • November ebri.org Issue Brief • November ebri.org Issue Brief • November ebri.org Issue Brief • November ebri.org Issue Brief • November ebri.org Issue Brief • November ebri.org Issue Brief • November ebri.org Issue Brief • November ebri.org Issue Brief • November ebri.org Issue Brief • November ebri.org Issue Brief • November ebri.org Issue Brief • November ebri.org Issue Brief • November ebri.org Issue Brief • November ebri.org Issue Brief • November ebri.org Issue Brief • November ebri.org Issue Brief • November ebri.org Issue Brief • November ebri.org Issue Brief • November ebri.org Issue Brief • November ebri.org Issue Brief • November ebri.org Issue Brief • November ebri.org Issue Brief • November ebri.org Issue Brief • November ebri.org Issue Brief • November ebri.org Issue Brief • November ebri.org Issue Brief • November ebri.org Issue Brief • November rg rg rg rg rg rg rg rg rg rg rg rg rg rg rg rg rg rg rg rg rg rg rg rg rg arc Is Is Is Is Is Is Is Is Is Is Is Is Is Is Is Is Is Is Is Is Is Is Is Is Ish su su su su su su su su su su su su su su su su su su su su su su su su su re e B e B e B e B e B e B e B e B e B e B e B e B e B e B e B e B e B e B e B e B e B e B e B e B e B pIssue ori ri ri ri ri ri ri ri ri ri ri ri ri ri ri ri ri ri ri ri ri ri ri ri ri rte e e e e e e e e e e e e e e e e e e e e e e e e from fffffffffffffffffffffffff • • • • • • • • • • • • • • • • • • • • • • • • • Brief N N N N N N N N N N N N N N N N N N N N N N N N N th o o o o o o o o o o o o o o o o o o o o o o o o oe E v v v v v v v v v v v v v v v v v v v v v v v v ve e e e e e e e e e e e e e e e e e e e e e e e e• mber mber mber mber mber mber mber mber mber mber mber mber mber mber mber mber mber mber mber mber mber mber mber mber mber B November RI E 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 duca 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 • N • N • N • N • N • N • N • N • N • N • N • N • N • N • N • N • N • N • N • N • N • N • N • N • N tio 2010 2010 • No. 350 2010 • No. 350 2010 • No. 350 2010 • No. 350 2010 • No. 350 2010 • No. 350 2010 • No. 350 2010 • No. 350 2010 • No. 350 2010 • No. 350 2010 • No. 350 2010 • No. 350 2010 • No. 350 2010 • No. 350 2010 • No. 350 2010 • No. 350 2010 • No. 350 2010 • No. 350 2010 • No. 350 2010 • No. 350 2010 • No. 350 2010 • No. 350 2010 • No. 350 2010 • No. 350 2010 • No. 350 2010 • No. 350 2010 • No. 350 2010 • No. 350 2010 • No. 350 2010 • No. 350 2010 • No. 350 2010 • No. 350 2010 • No. 350 2010 • No. 350 2010 • No. 350 2010 • No. 350 2010 • No. 350 2010 • No. 350 2010 • No. 350 2010 • No. 350 n o o o o o o o o o o o o o o o o o o o o o o o o o an . . . . . . . . . . . . . . . . . . . . . . . . . 35 35 35 35 35 35 35 35 35 35 35 35 35 35 35 35 35 35 35 35 35 35 35 35 35 d R • 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 e No. searc 350 h Fund © 2010 Employee Benefit Research Institute 18 48 29 12 53 14 32 46 45 43 38 42 22 19 39 36 51 28 40 30 44 11 47 37 54 23 27 17 21 33 25 41 55 58 16 56 52 57 7 9 8 20 62 63 60 49 59 35 64 66 13 10 15 26 65 67 61 50 24 34 31 4 2 6 3 5 F Fig igure 33 ure 33 A As sset set A Alllo loc cat atio ion n D Dis ist tr rib ibu ut tio ion n 4 of 01 401( (k) o k) P f Pa ar rt tic iciip pa an nt t A Ac cco cou un nt t B Ba ala lan nc ce e t to o Figure A13 Co Com mp pan any y S St to ock i ck in n 401 401( (k k) ) P Pllan ans s W Wiit th h C Co om mp pan any y S St to ock, ck, b by y A Ag ge e a, a,b b 44% 44% 44% 44% 44% 44% 44% 44% Figure A11 Percentage of 401(k) Participants, Changes in Consistent Participants' Investment in Equity Funds, 2008–2009 Percentage of 401(k Figure A9 ) Participants, 2009 2009 a Average Asset Allocation of 401(k) Accounts of 1999–2009 Consistent Group, by Participant Age P Per erc centage of entage of A Ac cc coun ount t B Bal alanc ance I e In nv ves est ted ed iin C n Com ompany pany S St toc ock k Average Account Balances Among Figure 24 401(k) Participants Present Percentage of participants Figure 32 a A Age ge a b 40% 40% 40% 40% 40% 40% 40% Percentage of account balances, 2009 From Year-End 1999 Through Year-End 2009, by Age and Tenure Average Asset Allocation of 401(k) Accounts, by Participant Salary and Investment Options G Gr roup oup Z Zer ero o 1–10% 1–10% 11–2 11–20% 0% 21–30% 21–30% 3 31–40% 1–40% 41 41–50% –50% 51–6 51–60% 0% 61–70% 61–70% 7 71–80% 1–80% 81 81–90% –90% 9 91–100% 1–100% Asset Allocation Distribution of 401(k) Participant Account Balance to Balanced Funds, by Tenure Figure 38 Percentage of Account Balance Invested in Equity Funds b b a d Age Group Tenure (years) 1999 2000 2001 2002 2003 a,b 2004 2005 2006 2007 2008 2009 20s 20s 60.3% 60.3% 11.0% 11.0% 7.2% 7.2% Percentage of account balances, 5. 5.3 3% % 3 3. .5% 5% 4.9% 4.9% 2.1% 2.1% 2009 1. 1.0 0% % 0. 0.7% 7% 0.5% 0.5% 3.4% 3.4% Equity Target-dateNon-Target-date Bond Money GICs /Stable- Company Percentage of Participants, Percentage in 2009 2009 37% 37% 37% 37% 37% 37% 37% $11,547 $14,280 $17,106 $18,177 $27,708 $35,439 $42,870 $54,331 $65,438 $47,030 $64,688 30s bAll c Asset Allocation Distribution of Account Balance to Balanced Funds 30s 30s 49.0% 49.0% 14.3% 14.3% 9.7% 9.7% 7. 7.8 8% % 5 5. .0% 0% 4.5% 4.5% 2.6% 2.6% 1. 1.5 5% % 1. 1.1% 1% 0.8% 0.8% 3.6% 3.6% Age Group Funds b Funds Balanced Funds Funds Funds Value Funds Stock Other Unknown Total Total in 2008 >10–20 None 1–20% 21–40% 41–60% 61–80% 81–99% 100% d $12,480 $15,081 $17,793 $18,714 $28,337 $36,082 $43,477 $54,944 $66,085 $47,387 $65,099 GICs /Stable- Equity Target-date Percentage of Account Balance Invested in Balanced Funds Non-Target-date Bonds Money Company 40s 40s 4444..99%% 1155..99%% 1100..11%% 88..00%% 55..33%4 %4..44%3 %3..00%1 %1..99%1 %1..44%1 %1..00%4 %4..22%% 30s 57.2% 7.0% Among Recently Hired 401(k) Participants, by Age 5.5% 9.5% 3.6% 4.9% 9.9% 1.5% 0.8% 100% $41,975 $43,067 $44,014 $41,796 Figure 29 $58,198 $70,253 $80,883 $98,697 $115,498 $82,813 $108,716 40s All b None 38.5 0.6 0.3 c 0.3 0.2 0.1 0.2 40.2 Tenure (years) Salary Zero 1–10% 11–20% 21–30% Funds 31–40% 41–50% 51–60% 61–70% 71–80% 81–90% 91–100% 50s 50s 4422..99%% 1177..33%% Funds1100..11%% 77..99%% 55..22%4 %4 Balanced Funds ..11%3 %3..00%2 %2 Funds..00%1 %1 Funds..55%1 %1 Value Funds ..11%5 %5..00%% Stock >10–20 $32,686 $34,448 $36,248 $35,070 $49,956 $61,140 $71,431 $87,981 $103,876 $74,214 $98,743 40s 51.5% 6.0% 6.0% 11.2% 4.2% 7.6% a,b 10.9% 1.9% 0.7% 100% Average Asset Allocation for 401(k) Plan Participants Without 1–20 1.0 6.2 1.5 0.3 0.2 0.1 0.1 9.3 >20–30 Percentage of Recently Hired 401(k) Participants, 2009 $68,305 $67,302 d $65,785 $60,471 $81,162 $95,596 $107,154 $128,495 $148,020 $106,423 $136,379 0–2 39.1% 4.0% 3.7% 3.5% 2.2% 2.3% 3.3% 1.7% 1.7% 1.6% 36.8% 60s 60s 46.6% 46.6% 16.1% 16.1% 8.8% 8.8% 7. 7.0 0% % 4 4. .4% 4% 3.5% 3.5% 2.7% 2.7% 1. 1.8 8% % 1. 1.4% 4% 1.1% 1.1% 6.5% 6.5% Plans Without Company Stock, GICs, or Other Stable-Value Funds 50s 40.9% 6.3% 6.4% 14.0% 5.0% 13.8% 10.6% 2.3% 0.6% 100% 21–40 2.2 Equity Fund Balances, by Participant Age or Tenure 0.8 6.3 2.1 0.3 0.1 0.0 11.7 50s All $73,784 $73,989 $73,058 $68,467 $90,506 $106,235 $119,489 $142,640 $164,565 $123,273 $153,344 >2–5 45.4% 5.5% 5.0% 4.7% 2.9% 2.7% 2.8% 1.8% 1.9% 1.7% 25.5% A Allll 47.7% 47.7% 15.2% 15.2% 9.4% 9.4% 7. 7.4 4% % 4 4. .9% 9% 4.3% 4.3% 2.7% 2.7% 1. 1.7 7% % 1. 1.2% 2% 0.9% 0.9% 4.5% 4.5% $20,000–$40,000 41.6% 21.9% 6.3% 19.0% 8.7% Percentage of Account Balance Invested in Balanced Funds 60s >10–20 $40,480 31.4%$42,8635.5% $44,640 6.1% $43,220 17.0% $59,740 6.1% $72,598 22.9%$84,379 8.6% $102,9242.0% $120,673 0.4% $90,063 100% $116,009 41–60 0.8 0.3 1.0 Figure 26 8.2 2.1 0.2 0.1 12.7 >5–10 So So ur urc ce: e: T Tabul abul 52.6% at ati io o ns ns f fr ro o m m EB EB 7.4% R RI I/ /I IC CI I P P ar art ti ic ci ipan pan 6.1% t t- -D Di ir rec ect te ed R d Ret et5.5% i ir rem ement ent P P l la an D n Dat at3.4% a C a Co o l ll le ec ct ti io o n n P P r r2.8% o o j jec ect t. . 2.6% 1.6% 1.6% 1.5% 15.0% Percentage of account balances, 2009 >$40,000–$60,000 >20–30 $100,811 $98,78645.0% $95,466 19.4% $87,492 $114,502 6.6% $133,098 18.2% $148,369 8.3% $176,236 $202,645 $150,400 $186,580 All consistent group 61–80 41.5% 0.3 5.9% 0.2 6.1% 0.2 13.9% Figure A5 1.1 4.9% 7.9 14.9% 1.3 10.1% 2.0% 0.2 0.6% 11.3 100% Age Group Zero 1–10% 11–20% 21–30% 31–40% 41–50% 51–60% 61–70% 71–80% 81–90% 91–100% a a T Th he anal e analy ys si is s i in nc cl ludes udes t the he 9 9. .5 5 m mi il ll li io o n pa n par rt ti ic ci ipan pant ts s i in pl n plans ans w wi it th c h co o m mpa pany ny s st to o c ck k a at t y ye ear ar- -en end 200 d 2009. 9. >30Asset Allocation Distribution of 401(k) Account Balances to Equity Funds, by Participant Age $92,742 $92,303 $90,043 $84,717 $109,274 $125,899 $138,865 $163,297 $186,200 $141,919 $170,384 >10–20 55.8% 9.0% 6.5% 5.8% 3.5% 2.7% 2.4% 1.4% 1.3% 1.2% 10.4% >$60,000–$80,000 e 47.6% 17.5% 6.7% 17.4% 8.2% 20s EBRI/ICI 401( b b k) Databas 35.9% 81–99 e 3.4% 0.2 3.1% 0.1 2.8% 0.1 1.8% 0.2 1.9% 0.9 3.8% 4.8 1.6% 0.31.6% 1.5% 6.5 42.5% 40.6% 9.5% 7.2% 11.4% 5.3% b 12.6% 9.2% 2.7% 1.6% 100% R Ro o w w pe per rc cent entage ages s m ma ay y no no t t add up add up t to o 1 10 00 per 0 perc ce ent nt be bec cau aus se o e o f f r ro o un undi ding. ng. a,b 60s All $111,143 $108,789 $105,986 $98,664 $123,175 $138,114 $148,873 $169,525 $186,030 $142,944 $162,522 Target-Date Asset Allocation to E Non-Target-date quities VBond Money aried Widely Among P GICs articipants in /Stable- Company the 2003–2009 Consistent Group >20–30 58.9% 9.8% 6.5% 5.5% 3.4% 2.5% 2.1% 1.2% 1.1% 1.0% 7.9% Percentage of participants, 2009 >$80,000–$100,000 49.6% 16.8% 5.4% 17.7% 8.0% 30s >10–20 38.8% $44,268 4.3% $47,663 4.2%$49,586 3.8% $48,312 2.4% $65,305 2.4% $78,708 3.3% $90,389 1.8% $107,823 1.8% $123,142 1.6% $93,082 $111,689 35.7% Source: Tabulations from 100 EBRI/ICI Participant 0.2 -Directed Retirement 0.1 Plan Data Collec0.1 tion Project. 0.1 0.2 0.4 7.2 8.4 a c Funds Total a Balanced Funds Funds Funds Value Funds Stock Other Unknown >30 >$100,000 >20–30 63.2% $116,356 9.2% $114,222 50.4% 5.6% $111,017 13.7% 4.7% $102,307 3.1% $129,615 6.6% 2.3% $147,416 19.0% 1.9% $160,701 1.1% 7.3% $184,876 1.0% $203,783 0.9% $154,149 7.1% $176,281 Row percentages may not add to 100 percent because of rounding. Percentages are dollar-weighted averages. a b, c 40s 40.7% c 4.2% 4.0% 4.0% 2.4% 2.4% 3.1% 1.8% 1.8% 1.5% 34.0% Percentage of Account Balance Invested in Equity Funds F Fiigur gure 34 e 34 Asset allocation dis Total in 2009 tribution at year-end 2009 of 401(k) participant account balance to equities, by age; percentage of participants >30 $159,293 43.2 $152,169 8.2 $145,806 $134,548 9.4 $163,137 12.3 $177,483 11.8 $186,0187.0 $206,956 8.0$223,003 $173,795 100.0 $192,032 b Age Group All All 50.0% 6.9% 48.4% 5.5% 13.2% 4.9% 3.1% 7.0% 2.6% 18.6% 2.6% 1.5% 8.5% 1.5% 1.4% 20.1% Age group is based on the participant's age at year-end 2009. Asset allocation by age group among the consistent group of 1.6 million 401(k) plan participants with account balances at the end 50s 41.3% 4.2% 3.8% 3.9% 2.5% 2.5% 3.0% 1.7% 1.7% 1.6% 33.8% a a a b b All Age Group All Zero $67,420 1–10% $67,282 11–20% $66,734 21–30% $62,695 31–40%$81,809 41–50%$94,95651–60% $105,82361–70% $125,09371–80% $142,718 81–90% $106,563 91–100% $131,438 M Mo or re e R Recen ecentl tly y H Hiired red 401 401( (k k) ) P Pla lan n Pa Par rt tic iciip pan ants ts Te Ten nd To d To H Hol old d B Ba alla anc nce ed F d Funds unds Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. d of each year from 1999 through 2009. 20s 50.1% 20.6% 5.4% 5.4% 8.2% 7.1% 1.1% 2.1% 100% 60s 46.4% 4.3% 3.4% 3.5% 2.2% 2.3% 2.7% 1.4% c 1.5% 1.5% 30.8% Plans With GICs and/or Other Stable-Value Funds a 7% 7% 7% 7% 7% 7% a Source: Tabulaa tions from the EBRI/ICI Participant-Directed Retirement Plan Data Collection P Percentage of Account Balance Invested in Target-date Funds roject. Percentage of Account Balance Invested in Equities 20s 60.0% 2.9% 2.3% 3.1% 3.1% 3.7% 4.2% 4.0% 4.1% 3.8% 8.8% A target Sample of 16.7 million participants with account balances at year-end 2008 and year-end 2009. -date fund typically rebalances its portfolio to become less focused on growth and more focused on income as it approaches and passes the target date of the fund, which is usually included P Per erc cent entage age of of r rec ecent entlly y hi hired red 401(k 401(k) ) part partiic ciipant pants s hol holdi ding bal ng balanc anced f ed funds unds,, 1998–2009 1998–2009 a All 30s 39.1% 41.7% 4.0% 15.2% 3.7% 8.0% 3.5% 8.1% 2.2% 11.7% 2.3% 10.0% 3.3% 1.7% 2.8% 1.7%2.4% 1.6% 100% 36.8% The analysis is based $20,000–$40,000 on a group of 1.6 million participants with accou35.4% nt balances at the end16.4% of each year from 1999 th 9.5% rough 2009. 9.2% 3.3% 23.2% b d Tenure (years) Percentages across the row may not add to total because of rounding. Zero 1–10% 11–20% 21–30% 31–40% 41–50% 51–60% 61–70% 71–80% 81–90% 91–100% Age Group b in the fund's name. Zero 1–20 percent >20–40 percent >40–60 percent >60–80 percent >80 percent 30s A Age ge 43.8% 3.5% 3.2% 4.1% 4.4% 5.6% 6.0% 6.0% 6.3% 5.2% 11.8% 40s 30.4% 12.2% 10.2% 9.5% 17.9% 13.3% 4.3% 2.1% 100% Age and tenure groups are based on participant age and tenure at year-end 2009. c >$40,000–$60,000 39.0% 14.2% 11.0% 8.9% 3.1% 23.5% d c Percentages in column may not add to total because of rounding. 0–2 GICs are guaranteed inv53.4% estment contracts2.6% . 2.3% 2.3% 1.5% 1.6% 2.5% 1.2% 1.4% 1.3% 29.9% G Gr roup oup Percentage of Account Balance Invested in Target-date Funds 1998 1998 199 1999 9 2000 2000 2001 2001 2 2002 002 2003 2003 20 2004 04 2005 2005 20 2006 06 2007 2007 200 2008 8 2009 2009 20s 13.1% 4.7% 6.1% 10.6% 20.4% 45.0% 40s 50s 39.7% 21.3% 4.1% 9.9% 3.6% 12.5% 4.5% 10.9% 4.8% 6.2% 25.8% 6.5% 13.6% 6.4% 4.4% 6.6% 1.6% 5.1% 100% 12.6% >$60,000–$80,000 43.8% 11.8% 10.2% 8.9% 3.1% 22.3% e Sum of shaded areas: 86.1 percent of participants. The year-end 2009 EBRI/ICI 401(k) database represents 20.7 million 401(k) participants. >2–5 62.9% 3.3% 2.6% 2.5% 1.7% 1.7% 1.8% 1.3% 1.4% 1.4% 19.4% Age Group 20s 20s Zero 27.0% 27.0% 1–10% 28. 28.3 3% % 27.1% 27.1% 11–20% 2 27. 7.3% 3% 21–30% 32.7% 32.7% 31–40% 35 35. .1% 1% 38.9% 38.9% 41–50% 43 43. .5% 5% 51–60% 48.5% 48.5% 61–70% 51.1% 51.1% 63. 63. 71–80% 6 6% % 64.1% 64.1% 81–90% 91–100% 60s 14.6% 7.7% 14.6% 13.1% 34.2% 10.6% 4.0% 1.2% 100% 30s 50s Note: "Equity funds” include mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investment 41.3% 5.2% 8.2% 4.3% 5.1% 4.3% 5.3% 5.3% 6.6% 6.4% 10. product primarily invested in stocks. 5% 6.0% 20. 5.5% 7% 3.7% 50.8% 10.6% >$80,000–$100,000 44.5% 11.1% 9.7% 9.5% 2.5% 21.6% Note: "Funds" include mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investment product primarily invested in the security indicated. >5–10 d 70.7% 4.4% 2.9% 2.6% 1.8% 1.6% 1.5% 1.1% 1.2% 1.1% 11.2% 20s 30s 30s 51.5% 29.0% 29.0% 31. 31. 2.1% 0 0% % 28.3% 28.3% 1.9% 2 26. 6.5% 5% 1.8% 33.1% 33.1% 1.2% 36 36. .2% 2% 39.8% 39.8% 1.3% 42 42. .8% 8%3.0%47.9% 47.9% 1.2% 54.2% 54.2% 59. 59. 1.3% 6 6% % 61.2% 61.2% 1.3% 33.4% All 24.2% 10.6% 11.9% 10.7% 24.8% 12.1% 4.0% 1.7% 100% 40s >$100,000 8.4% 45.8% 5.9.9% 7% 9.2% 6.4% 9.9%11.8% 2.9% 23.5% 21.3% 44.3% 60s 47.8% 5.6% 4.4% 5.0% 5.0% 5.8% 5.3% 4.3% 3.9% 2.6% 10.3% >10–20 75.4% 5.2% 2.9% 2.4% 1.6% 1.3% 1.1% 0.8% 0.8% 0.8% 7.6% 30s 52.7% 2.8% 2.6% 2.5% 1.6% 1.7% 2.5% 1.3% 1.4% 1.4% 29.4% 40s 40s 30.5% 30.5% 33. 33.6 6% % 30.8% 30.8% 2 27. 7.9% 9% 33.7% 33.7% 35 35. .7% 7% 39.8% 39.8% 42 42. .1% 1% 46.6% 46.6% 52.8% 52.8% 57. 57.8 8% % 59.3% 59.3% All 42.3% 10.0% 10.1% 8.5% 3.3% 21.6% Tenure (years) 50s All 44.8% 4.2% 11.5%3.6% 4.4% 8.8% 4.6% 8.8% 5.7% 5.9% 16.4% 5.6% 22. 5.6% 6% 4.3% 32.0% 11.1% 40s >20–30 54.5% 78.9% 2.8% 5.5% 2.5% 2.8% 2.5% 2.2% 1.6% 1.4% 1.1% 1.7% 1.0% 2.3% 0.6% 1.3% 0.6% 1.4% 0.6% 1.3% 5.3% 28.0% 50s 50s 30.9% 30.9% 34. 34.9 9% % 32.1% 32.1% 2 29. 9.2% 2% 33.9% 33.9% 35 35. .5% 5% 40.3% 40.3% 43 43. .3% 3% 47.8% 47.8% 53.4% 53.4% 58. 58.0 0% % 58.7% 58.7% 0–2 49.0% 15.5% 8.9% 7.1% 11.7% 5.5% 1.0% 1.4% 100% Plans With Company Stock Figure A14 Source: Tabulations from EBRI/ICI 401(k) Participant-Directed Retirement Plan Data Collection Project. 60s 18.4% 12.1% 11.5% 17.2% 5% 5% 5% 5% 5% 5% 15.3% 25.6% 50s >30 54.8% 81.4% 2.9% 5.2% 2.4% 2.3% 2.5% 1.8% F Fii1.6% 1.2% gur gure A e A1 12 2 1.0% 1.7% 0.8% 2.2% 0.5% 1.2% 0.5% 1.3% 0.5% 1.3% 4.7% 28.0% 60s 60s 28.4% 28.4% 34. 34.9 9% % 33.2% 33.2% 2 29. 9.1% 1% 30.2% 30.2% 30 30. .7% 7% 36.3% 36.3% 41 41. .6% 6% 45.5% 45.5% 50.1% 50.1% 53. 53.9 9% % 53.6% 53.6% a >2–5$20,000–$40,000 b45.5% 14.8% 32.8% 8.4% 13.5% 9.2% 3.2% 11.9% 13.3% 6.6% 12.9% 1.8% 1.9% 20.8% 100% The analysis includes the 20.7 million participants in the year-end 2009 EBRI/ICI database. Fi Fig gur ure A e A1 10 0 Changes in Consistent Participants' Investment in Bond Funds, 2008–2009 60s All consistent group59.0% 2.9% 2.1% 2.2% 1.5% 1.5% 1.9% 1.0% 1.2% 1.3% 25.4% All 67.4% 4.1% 11.5% 2.7% 7. 2.4% 6% 1.6% 7.8% 1.5% 1.6% 13.7% 1.0% 21. 1.1% 2% 1.0% 38.1% 15.8% All 28.9% 31.3% 29.1% 27.4% 33.0% 35.4% 39.3% 42.8% 47.6% 52.7% 59.9% 60.9% A As ss se et t A All lloc oca at ti ion on t to E o Equit quiti ie es s V Va ar ri ie ed Wide d Widely ly A Am mong ong P Pa ar rt ti ic ci ipa pan nts ts i in t n the he 1 19 99 99 9– –2 20 00 09 9 C Cons onsiis ste tent nt G Gr roup oup b >5–10 34.1% 12.0% 11.4% 11.3% 17.1% 9.1% 2.9% 2.2% 100% >$40,000–$60,000 37.8% 11.3% 4.8% 15.3% 9.9% 17.2% Row percentages may not add to 100 percent because of rounding. e a All 53.4% 2.6% 2.3% 2.9% 1.5% 1.6% 2.5% 1.2% 1.4% 1.3% 29.9% P Pe er rc cen ent C t Ch han ange i ge in n A Av ve er ra ag ge e A Ac cc count ount B Ba al la anc nces es A Am mong ong 4 40 01 1( (k k) ) P Pa ar rti tic ci ip pa an nts ts So urce: Tabulatio ns fro m EB RI/ICI P articipant-Directed Retirement P lan Data Collectio n P ro ject. EBRI/ICI 401(k) Database Percentage of participants 13.1% 6.0% 7.1% 12.4% 8% 8% 8% 8% 8% 8% 22.8% 38.6% >10–20 26.5% 9.6% 11.6% 11.2% 21.6% 12.9% 4.4% 2.1% 100% >$60,000–$80,000 Asset alloca39.9% tion distrPercentage of Account Balance Invested in Non-Target-date Balanced Funds ibution 9.9% at year-end 200 5.3% 9 of 401(k) pa 14.1% rticipant acco 9.4% unt balance 17.6% a a a b b Note: "Equity funds” include mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investment product primarily invested in equities. The analysis includes participants with two o r fewer years o f tenure in the year indicated. Sf Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. /C P Pr re es se en nt t F Fr ro om m Y Yea ear rC- -E En nd 1 d 199 999 9 Thr Throug ough h Y Yea ear r- -E En nd 2 d 200 009 9, by by A Age ge a and Te nd Tenur nure e a b,c >20–30 >$80,000–$100,000 16.9% 8.4% 43.5% 12.1% Percentage of Account Balance Invested in Non-Target-date Balanced Funds 6.7% 10.4% 5.0% 29.6% 11.7% 15.4% 9.7%5.5% 1.7% 20.2% 100% Tenure (years) Zero 1–10% 11–20% 21–30% 31–40% 41–50% 51–60% 61–70% 71–80% 81–90% 91–100% a b to equities, by age and percentage of participants "B alanced funds” include mutual funds, bank co llective trusts, life insurance separate acco unts, and any po o led investment pro duct primarily invested in a mix o f Equities include equity funds, company stock, and the equity portion of balanced funds. “Funds” include mutual funds, bank col Percentage of Account Balance Invested in Bond lective trusts, life insurance separate accounts, and any pooled investment product. Funds b b >30 10.4% 6.8% 12.5% 12.3% 37.9% 14.5% 4.6% 1.1% 100% >$100,000 Age Group 40.3% Tenure (years) 7.8% 1999–2002 2002–2007 5.7% 2007–200 13.8% 8 2008–2009 7.1% 2007–2009 1999–2009 20.3% Age Group Zero 1–10% 11–20% 21–30% 31–40% 41–50% 51–60% 61–70% 71–80% 81–90% 91–100% 0–2 equities and f83.5% ixed-income sec2.7% urities. 2.1% 1.6% 0.8% 0.7% 0.8% 0.4% 0.4% 0.3% 6.7% a primarily invested in the security indicated. Percent Percentage in 2009 age of Account Balance Invested in Equities d 30s All 57.4% 260.0% -28.1% 37.5% -1.1% 460.2% b 20s All All 82.3% 2.7% 35.9% 1.8% 1.2% 9.9% 0.6% 4.4% 0.6% 14.7% 0.8% 10.0% 0.4% 0.4% 0.3% 19.7% 8.8% 24.2% 10.6% 11.9% 10.7% 24.8% 12.1% 4.0% 1.7% 100% Participants include the 4.3 million 401(k) plan participants with account balances at the end of each year from 2003 through 2 >2–5 d 79.6% 4.0% 3.4% 2.7% 1.3% 1.0% 009. Asset allocation is as of year-end 2009. 1.0% 0.5% 0.5% 0.4% b5.6% Age Group NoneZero 1–20% >10–201–20 per 21–40% 50. cent 0% >20–40 per 253. 41–60% 1% cent -28.61–80% 3%>40–60 per 37.4% c81–99% ent > -1. 60–80 per 5% 100% c4 ent 21.6% Total in 2008 >80 percent d c Figure 35 30sSource: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. 83.6% 3.0% 2.4% 1.7% 0.8% 0.7% 0.7% 0.4% 0.4% 0.3% 6.0% Plans With Company Stock and GICs and/or Other Stable-Value Funds Row percentages may not add to 100 percent because of rounding. >5–10 78.6% 5.1% 4.1% 3.4% 1.7% 1.2% 1.1% 0.5% 0.4% 0.4% 3.4% 30s 40s 7.9% All 4.0% -0.4% 176.4. 3% 9% -28.3% 9.9% 31.3% 11% 11% 11% 11% 11% 11% -5.9% 19.3% 159.0% 54.0% a None 62.0 1.5 0.5 0.2 0.1 0.1 0.2 64.6 a d 40s A target-date fund typically rebalances its portfolio to become less focused on growth and more focused on income as it approac 83.9% 2.7% 2.3% 1.9% 0.9% 0.7% 0.8% hes and passes the target date of the fund, 0.4% 0.4% 0.3% 5.7% Age group is based on the participant's age at year-end 2009. >10–20 $20,000–$40,000 77.3% 6.0% Many30.9% Recen 4.5% >10–20 tly Hired 3.8% 8.2% 401( 7.3% k) Pl2.0% an1 Part 96. 7.1% 2% icipan 1.4% t-28. s Ho 6%ld 5.5% T1.2% arg 33. et1% -date0.5% 1.8% Funds -4.9% 0.4% 24.0% 202.1% 0.3% 20.0% 2.5% 40s 7.8% 5.7% 6.1% 11.6% 22.7% 46.2% 1–20 3.7 11.9 1.1 0.2 0.0 0.0 0.1 16.9 e which is usually included in the fund’s name. 50s 84.5% 2.5% 2.2% 1.8% 0.9% 0.8% 0.8% 0.4% 0.3% 0.3% 5.5% The year-end 2009 EBRI/ICI 401(k) database represents 20.7 million 401(k) participants. >20–30 -11.5% 144.8% -28.1% 28.1% -7.9% 99.7% >$40,000–$60,000 33.4% 7.1% 7.9% 6.1% 2.6% 21.1% 19.6% >20–30 77.1% 6.5% Percent 4.5% age of recent 3.6% ly hired par 2.1% ticipants, 2006, 1.4% 2007,1.1% 2008, and 2009 0.5% 0.4% 0.3% 2.3% b 50s 12.0% 9.3% 8.5% 15.9% 21.5% 32.8% 21–40 0.4 1.7 6.5 0.5 0.1 0.0 * 9.3 GICs are guaranteed investment contracts. 60s 85.8% 2.3% 1.9% 1.7% 0.9% 0.8% 0.8% 0.4% 0.3% 0.2% 5.1% 50s All -7.2% 140.0% -25.1% 24.4% 11% 11% 11% 11% 11% 11% -6.8% 107.8% >$60,000–$80,000 36.4% 7.7% 7.9% 6.7% 2.6% 18.3% 18.8% c >30 79.1% 6.0% 3.9% 3.2% 1.9% 1.3% a 1.0% 0.5% 0.4% 0.3% 2.3% Row percentages may not add up to 100 percent because of rounding. Percentages are dollar-weighted averages. 60s 41–60 Holding Bal0.2 anced F 20.6% unds >10 0.2 –20 13.4% 6. 0.9 8% Hol 179. ding Li 10. 2.3 2% 9% fecycle F -25. unds 4% 0.2 15.28. 7% 8% 0.0 -3. Ho 9% ld14. ing N 3% on- * 1 Li 86. fecycl 6%e Balanced F 25. 3.8 1% unds All 83.5% 2.7% 2.1% 1.6% 0.8% 0.7% 0.8% 0.4% 0.4% 0.3% 6.7% d >$80,000–$100,000 39.0% 7.1% 7.8% 7.2% 2.5% 16.7% 18.3% All 79.8% 4.7% 3.6% 3.0% 1.5% 1.1% 1.0% 0.5% 0.4% 0.3% 4.0% b The analysis includes the 9.3 million participants with no equity funds at year-end 2009. >20–30 -13.2% 131.6% -25.8% 24.1% -7.9% 85.1% All consistent gr 61–80 oup 0.1 13.1% 0.0 8.7% 0.1 0.5 7.9% 0.7 13.5% 0.1 19.9% * 36. 1.5 9% Age Group 2006 2007 2008 2009 2006 2007 2008 2009 2006 2007 2008 2009 Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. >$100,000 42.0% 6.8% 5.5% 7.3% 2.4% 17.2% 18.1% Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. >30 -8.7% 119.8% -23.8% 20.1% -8.5% 83.7% Note: “Funds” include mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investment product primarily invested in the security indicated. a e 81–99 0.1 0.0 0.0 0.0 0.2 0.6 0.1 1.0 The analysis includes the 3.1 million recently hired participants (those with two or fewer years of tenure) in 2009. EBRI/ICI 401(k) Database 13.1% 6.0% 7.1% 12.4% 22.8% 38.6% a 20s 48.5% 51.1% 63.6% 64.1% 29.4% 31.7% 46.5% 48.5% 22.5% 21.8% 19.3% 17.7% The analysis includes the 20.7 million 401(k) plan participants in the year-end 2009 EBRI/ICI database. All 60s 36.6% All 6.8% -11.2% 88. 6.9% 5% -23.2%7.1% 13.7% 2.3% -12.6% 20.7% 46.2% 15.7% The tenure variable is generally years working at current employer, and thus may overstate years of participation in the 401(k) plan. b 100 0.1 * * 0.1 * 0.1 2.6 2.9 Row percentages may not add up to 100 percent because of rounding. b Source: Tabulations from EBRI/ICI Participant-Directed Retirement P lan Data Collection Project. 30s 47.9% 54.2% 59.6% >10–20 61.2% 9. 28.5% 1% 1 35.1% 54.9% 43.5% -24.4% 47.3% 20.0% 22.5% -9.3% 22.2%152.3%18.8% 16.4% Row percentages may not add up to 100 percent because of rounding. Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. c c a A target-date fund typically rebalances its portfolio to become less focused on growth and more focused on income as it approac Total in 2009 66.5 >20 15.3 –30 -19.1 2.1% 99.2% 3.8 -24.4% 1.4 hes and passes the target date of the fund, which is usually included 14.4% 0.8 -13.5% 3.0 51.5% 100.0 a Equi a ties include equity funds, company stock, and the equity portion of balanced funds. “ Funds” include mutual funds, bank collective trusts, life insurance separate accounts, 40s 46.6% 52.8% 57.8% 59.3% 27.4% 34.2% 41.8% 45.5% 21.3% 21.4% 18.3% 16.1% A target-date fund typically rebalances its portfolio to become less focused on growth and more focused on income as it approac Minor investment options are not shown; therefore, row percentages will not add to 100 percent. Percentages are dollar-weighed hes and passes the target date of the fund, which is usually averages. included and any pooled investment product primarily invested in the >30 security indicat -1 e5. d. 5% 65.7% -22.1% 10.5% -13.9% 20.6% in the fund’s name. b Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. Salary information is available for a subset of participants in the EBRI/ICI database. in the fund’s name. 50s 47.8% 53.4% a 58.0% 58.7% 28.1% 34.9% 42.2% 45.2% 21.4% 21.2% 18.1% 15.5% b a Participants include the 1.6 millio nAll 401(k) plan participants w All ith account balan -7. c0% es at the end 127. of e 6% ach year fr-25. om 1 3% 999 through 23. 2009 3% . Asset allo -7. cat 9% ion is as of95. year-e 0%nd 2009. c Note: “Funds” include mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investment product Sample of 16.7 million participants with account balances at year-end 2008 and year-end 2009. primarily invested in the security indicated. A target-date fund typically rebalances its portfolio to become less focused on growth and more focused on income as it approaches and passes the target date of the fund, Note: “Funds” include mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investment produc c t primarily invested in the security indicated. The tenure variable is Ro w b percentages may no t add to 1 00 percent because o f ro unding. 60s 45.5% 50.1% Source: Tabula53.9% tions from the E53.6% BRI/ICI Partic26.1% ipant-Directed R 32.1% etirement Pla38.4% n Data Collection 41.0% Project. 19.8% 20.3% 17.3% 14.2% Percentages across the row may not add–total because of rounding. which is usually included in the fund’s name. d a generally years working at current employer, and thus may overstate years of participation in the 401(k) plan. Age cgroup is based on the participa Thn e an t's ag alys e a ist y is b ear-e ased nd on 200 a 9. gr oup of 1.6 million participants with account balances at the end of each year from 1999 through 2009. d All 47.6% 52.7% 59.9% 60.9% 28.3% 33.8% 43.6% 46.6% 21.9% 21.7% 18.7% 16.5% Percentages in column may not add–total because of rounding. GICs are guaranteed investment contracts. b e The year-end 2009 EBRI/ICI 401(k A ) g dat e an abas d ten e re urpres e grou ent ps s 20 are .7ba 0 m sed illio on p n 40 ar 1t (ic k) ipa pa nt rt a icge ipa an nts d . tenure at year-end 2009. Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. * Less than 0.05 percent. a Sum of shaded areas: 88.5 percent of participants. A lifecycle fund typically rebalances to an increasingly conservative portfolio as it approaches and passes the target date of the fund, which is usually included in the fund's name. Note: "Bond funds” include mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investment product primarily invested in bonds. Note: The analysis includes the 2.8 million recently hired participants (those with two or fewer years of tenure) in 2006, the 3.8 million recently hired participants in 2007, the 4.0 million recently hired participants in 2008, and 3.1 million recently hired participantsin 2009. "Funds" include mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investment product primarily invested in the security indicated. Percentage Percentage in 2008 in 2008

Volume 350

Pages 68

EBRI Issue Brief

Jack VanDerhei

Sarah Holden

Luis Alonso

Retirement