After a decade marked by two severe bear markets, 401(k) plan participants have adopted a more balanced approach to their portfolios, according to a report released today by the Investment Company Institute (ICI) and the Employee Benefit Research Institute (EBRI). Fears that younger participants in 401(k) plans would abandon stock investing are not borne out by the data, which suggest that greater use of target-date funds is helping workers keep their investing on track.

THE BULK OF 401(K) ASSETS CONTINUED TO BE INVESTED IN STOCKS. On average, at year-end 2010, 62 percent of 401(k) participants’ assets were invested in equity securities through equity funds, the equity portion of balanced funds, and company stock. Thirty-three percent were in fixed-income securities such as stable value investments and bond and money funds.

SEVENTY PERCENT OF 401(K) PLANS INCLUDED TARGET-DATE FUNDS IN THEIR INVESTMENT LINEUP AT YEAR-END 2010. At year-end 2010, 11 percent of the assets in the EBRI/ICI 401(k) database were invested in target-date funds and 36 percent of 401(k) participants held target-date funds. Also known as lifecycle funds, they are designed to offer a diversified portfolio that automatically rebalances to be more focused on income over time.

MORE NEW OR RECENT HIRES INVESTED THEIR 401(K) ASSETS IN BALANCED FUNDS, INCLUDING TARGET-DATE FUNDS. For example, at year-end 2010, 44 percent of the account balances of recently hired participants in their 20s were invested in balanced funds, compared with 42 percent in 2009, and about 7 percent in 1998. A significant subset of that balanced fund category is target-date funds. At year-end 2010, 35 percent of the account balances of recently hired participants in their 20s were invested in target-date funds, compared with 31 percent at year-end 2009.

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 more than a percentage point (to 8 percent) in 2010, continuing 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 BALANCES DECLINED SLIGHTLY IN 2010. In 2010, 21 percent of all 401(k) participants who were eligible for loans had loans outstanding against their 401(k) accounts, unchanged from year-end 2009, and up from 18 percent at year-end 2008. Loans outstanding amounted to 14 percent of the remaining account balance, on average, at year-end 2010, compared with 15 percent at year-end 2009. Loan amounts outstanding declined slightly from those in the past few years.

THE YEAR-END 2010 AVERAGE ACCOUNT BALANCE IN THE DATABASE WAS 3.4 PERCENT HIGHER THAN THE YEAR BEFORE, BUT MAY NOT ACCURATELY REFLECT THE EXPERIENCE OF TYPICAL 401(K) PARTICIPANTS IN 2010. To understand changes in 401(k) participants’ average account balances, it is important to analyze a sample of consistent participants. As with previous EBRI/ICI updates, analysis of a sample of consistent 401(k) participants (those that have been in the same plan since 2003) is expected to be published in 2012.

Figure 48 401(k) Loan Balances Figure 1 Figure 30 Figure 5 8 401(k) Plan Char acteristics, by Number of Plan Par ticipants, 2010 Asset Allocation to Equities Varied Figure 17.1 Endnotes References 14 Year-End 2010 Snapshot of 401(k) Plan Loan Activity attribute As partici in company st se Distributio perc no. p t Alloc p e 27, ants ent rcent 3 d . 24 . to Asset Allocatio 20 o a 20 i (D fn tn to ion t h ock, partici 11b. 09b. ftheir ece of Participants’ Bala ose particip o m inclu fu Eq “ Tr 2 p ber). T0 nds. ants ends he s uity ants din ear Em nAvaila A w g F D a n n e ployment had 49 nd unds ing i stribution re accou perc Ex ble i$8 n a ccount per plans nced 0,0 n at ent t ienc bala 00 Situ w of wh ww.ici. Fund t h b to eatio 4 nce at alances o in 01(k $1 hel off n, 40 Allocat 00, for org/ d ) e 1(k Octob r Partici 000 none ecom great pdf ach ) iPla ons ha /e p p (Figure part p re any ns er1 d a 20 r by Age n . a me th t 4 icipant 11, Lincolnshir stock but Account an -03. ” 3 dian $ Econo 3 pd .............................................................. 100, ). is th f On acc an Bal 0no e, m 00 e d the o ic ance sum o IL: He unt www.ebri.org/pdf/bri stable (Figu News oth bto a e r fwitt lanc e r valu th Equity Rele h 10 e an e A e ). participant ssociates ase, d of pro , The Fu a $b 46, d Novem nds, out ucts, variatio 872, 6 efspdf/EBRI_IB LLC. Available at by ’s w per b as w hile Par e nr hile sets cent in 4, ticipant th account 20 te in al hose h ad 11. remai 24 l mor f_12a- e unds. a ba ning w r e ning ww. lances than 401(k) Participants Represent a Range of Ages Jack VanDerhei is director of research at the Employee Benefit Research Institute (EBRI). Sarah Holden is senior 401(k) Plan Asset Allocation, Account Balances, and Loan Average Median About Changes in Account Balances $7,495 20 Figure 25 $7,346 $7,292 among 65th birthday. percentages About half of t participants in their 60s with two of The equity salary; therefo raditional po IRA assets resulted rtio re, n was estimated using the i one would or fexpect ewer from rollovers years of tenure, the aver the ratio of account balance to sa ndust from ry a employer- verage equity perce age spon account ba sored lary retir $7, nto rise with salary. However, tax tage for the a 191 lance ement increased plans. See Brady, Hold ssigned target 17 percent with the date en, Widely Among 401( Figure k) 21 Plan Participants partly 80 25 more Plan perc perc Washin retireme 200 Age, bala than re ent ent 8.p flects nces Tenure, or Salary $ d o o gton, 1 ff fntma 00,0 their partici are the DC: desimpl 0 construct effects of partici 0 ac p had ants count U.S. e awere r.org/Library/He De ........................................................................................................ e median balanc d pa as th rtment offer es p accou e ant einves sum d of a bo g nt Labor, Bure e, of th ted wba it ten all compa tilance _ n Researc u part com re, n icipa of sala y pau an st $37, Figure h_Tr Figure Fig ry, n ock y ot fstock. ba 16 Labor u contributio ends_i an rlances 8. e 12 d 43 4 Amo stable Statistic n_in ng 401k n the value lo behavior, sng _High . plan. Available er-te pro lights. Plan d nuct rol ured ls overs at size pdf , in a parti is dditio from ot estimated cipants n .............. t her o in t the as plans, heir base the 60 27 sum ass s opt with e t iof ons. director Distributio of reti nrement of Participants and investor ’ Company researc Stoc h at t k Allocations he Inves Figu tment ....................................................................... re 27 Company Institute. Luis Alonso is director of. 24 infor mation Aon Hew Number itt. of 2 011. Plan P Nav articipant igati sng th Percentage e Path T ot to al Retireme Plans of active 401(k) nt: Total Figure 2011 Partic ipant Universe plan 45s participants Benchmarks Total and Asset . sLincolnshire, * Av er IL age : Aon He Account witt. Balanc e The year-end 2010 EBRI/ICI 401(k) database shows tha Figure Figure t, on aver 10 14age, 42 percent of participant account balances were $6,946 $6,856 $6,846 Activity in 2010 $6,815 Average Asset A $6,839 llocati Figure on of 401(k) A 18 $6,821 ccounts, When analyzing the change in participant account balances over time, it is important to have a $6,717 Figure 7 Availability 1 and Use of 401(k) Plan Loans by Plan Size $6,644 $6,659 co code fund calculated and nso Short (2010); and Copeland (2009). contributi lidation of their multiple acco on using the limits and nondiscriminatio Tenure Composition Morningstar Lifecy Asset unts. alloc Among participants ation cle Allo n rules, which aim di of strSelected 401(k) catio ibution n Index. of F in their 50s or 60s with more than 30 i gur 401( to e ensure that employees k 40 ) par Accou ticipant nt Balance Categories account of bal all anc income ranges attain the es years of tenure, the 1–10 Percentage of 401(k) Plans Offering Loans, by Plan Size, 2010 allocation, $20, active For data on 401(k) plan asset ww 00partici 0 w.bls.gov to wit $4 ph ants 0,00 drawals, /news.rel 0 in t A in 401(k) Loan v hsalar e e loan rpla ag ease/ yn e activity, an in s, an A e participants, 20 d, sse mpsit.t17. E 10, as suc Balances as BtR tA he 14, 401(k) I/IC d llh 738 o employer median , ht cat I does and m 401(k) D plan io plans t n not a accou o cont Percentage of assets fn h e 401 81, a rough 2008, see nt c ribu tabase e 271 ssarily ba (by k) tion lance A age, cco rates. repr R wa e 2010 401(k) u esent presents Wide s n This $53, U.S. Department ts, $5, b the total number research 293, A 25 y ccou P 0. 614, ar For 819 n t i t report c long Balances ipof a er-t n Labor, Employee Benefits exami t of enur Ag employees ee nd es $65, partici the relat 135 p at t ants ih oe nin ship their 401(k) Distribution Account of Balances 401(k) ALess Than $10,000, by ccount Balances, by Size Participant of Accoun Agt e Balance and Tenure technology and resea A rch sse dat t A abases llocaat E tion BR D I. iSteven stribu Bass tio Fn i gur is oassistant f e 4 901(k)ec P onomist articip at ICI ant A . Spe cco cial untt h anks to David Smith, allocated Asset Allocatio to equity n fun of Rec ds (Fi ently gure Hired 21), Participa which is on nts ............................................................................... e way to hold equities. However, individual asset allocations ...... 26vari ed Ratio of 401(k) Account Balance to Salary Figure 36 for Participants in Their 20s, by Tenure Fig Holden, Holden, ure 28, Sarah Sarah Perc , , entag Jack Va Steven e of Bass, nDer 401 hei, and Bri (k) a Pl nan d an Carol Parti Reic d Quick. ipants . 2011. a 2000. “ Witho Comut m 401(k) itment Equity Pla to Fund nRe As tirement Balan set Allocation, ces Secu Wh b o rity Have Eq Account : Investor uity Bala Attitudes Expos nces, ure, an 35 d an Loa d Actions n . Domestic by Plan Siz Stock and e and Investment O Bond Market Indexes ptions Barclays conCa sispit tent al U.S. A sample. ggre Com gate pa Bon ring d ave Inde rag x. Sa e accou n Francis nt bala co, CA: Barc nces acla roys ss Globa different year-end l Investors. snapshots can lead By Jack VanDerhei, EBRI; 11–25 Sarah Holden, ICI; Luis Alonso, EBRI; and Steven Bass, ICI a Asset Allocation of Recentl Target-date Recen funds were avail tlPercentage y Hired 401( able of participants w in y k) to Hire 70 per Plan equi 14,d Participants ti 400 Part es cent , by icip of 40 age, per ith an 1account ( tk) 246, s T pla 571 e centage nns d t balances in o Be L the of par year-e ess L $15, ti in specified ranges, 2010 cipants 292, nd ikely 20 228, ,10 t 356 2010 o databas Hold Co e (mp Figure an $62, y22 St 020 ).oc k These average benefits of the account balance incr 401(k) plan, constrain thes eased 5 percent wi e high-income individuals’ ability t th the consolidation of their multiple a o save in the pl ccounts. an. See Holden and VanDer Future joint research with this hei Fifty-nine percent of the Percentage 4for Participants 01(k) pla of participants ns for Per which cent With 401(k) Plan Loans, wage iloan th account of dat aca count wer balances less e bal ava anc ilable esby than ,in 2010 Plan Size, th $10,000 at e 2010 EBRI/ICI y 2010 ear-end 40 2010 1(k) database offered Security Administration Percentage (2010b). For total retirement assets, in S of participants w napshot of Cross- YSect ear-E ith account ind on of 401(k) A cluding 401( balances those in 401(k) plans, through the k) ccount Uni in specified ranges, 2010 verse Balances second quarter of between 60s sponsoring earnin acco g firm. munt ore balanc than $es 10a 0n ,000, d partici the p me ant di san ’ age, accou ten ant ure, bal and salary. ance was $ 299,460. EBRI, who helped prepare the figures. This Issue Brief was written with assistance a from the Institute’s research and Balance to Equity Funds, Percentage, by Participa 2010 nt Age, Tenure, or Salary widely 21 across participants. For example, Month-end lev about 47el, perc Decem ent of ber 1996 participa to n Septem ts held ber 2011 no equity funds, while 16 percent of Year-End 2010 Snapshot of 401(k) Recently Hired 401(k) Participants Now Hold Plan Loan Activity ............................................................................... 37 26–50 Percentage of account balances, 2010 36 U.S. Washin by Activity DeActive Partic partm gton, in ipa e 401(k) nt 1998.” nt of DC: Age Labor, Plan Participants Investme In or vestmen T Employee enurnt et, Compa Company 2010 Be 10, .................................................................................................... nn e 708 y fits I Ins nstitute Ste itute curity (Janu Pe Figure 39 Administration 388, rspect 807 ary). ive Availa 9, no. .ble 20 5 (J $23, 08a. at anuary), 153, ww Privat 272, w.ici.or 398 e an Pe g/ d nsion pdf EBRI /ppr Plan Issue _11 Bull _ $59, Brief com_ret.p etin, 550 , n o Abst 27 . 21 df ract 8 of Dece April At year-end 20 m m Acco ber 2011 • 2011 • to unt balan false co No. 356 N N 10, on average Po. 366 cncl ees are net o rcentage of recently usio ns. Fo f, participants in their 20s had unpaid lo r example, hired participants offer an bal the addition of ances. 42 ed and holding company 74 a la percent of their 401(k) plan assets invest rge number o stock, by f new plan participant age,1998–2010 s (arguably 93%ed a go in equities— od event) Percentage of Account Balance Inv a ested in Equities b 92% plans offered target-date funds to 68 percent of the participants in the 60s database. Among participants who were feature (2001c) will explore the longitu 10 for a complete discussion of EBRI/IC 0% dinal 401( aspect k) plan s of this consolidation in more detail. I par findings a ticipant nd ac others count ’ research on the relationship balances, 1996–2010 between contribution rates and a Comp planaring loan 30 snap pr 0 ovision shots to of part newly icipants hired (Figur 401(k) e 4 plan 3). partic The ilo pants’ an feature was more asset allocations common provides ly fu associated rther insight with into large recen pla t ns (as 2011, see Investment Company Institute (2011). For a discussion 20s of trends between defined benefit (DB) and defined Bloomber 70% g Data. New York, NY: Bloomber Pger L.P. cent age of participants, 2010 a editorial staffs. Any views expressed in this report are thos5% e of the authors, and should not be 29 ascribed to the officers, partici 51–100 pAge ants Group held more t 1998 han 1999 80 perc 401( 2000 ent Non- k ) of 8, T pl 504 ar their 2001 an get-c dat har ba elances 2002 acter 601, is in t2003 i793 cequity s by num 2004 funb der s (Fi 2005 $34, of g par 300, ures ti 674, c 2006 i2 p6 711 ants and : 2007 27). Furth 2008e$56, rmore, 2009 997 the 2010 88% 88% 4% Non-Target- The Availability 200 (Februa ratio o 5 Form 55 f rparticipant y). anAv d 00 Use o ailabl Annual acco e f 401 at unt www.ici.org/pdf Re (k) ports balanc Plan Higher Concentrations in Balanced Funds . Loans Washin e to salary is /p by gt er09 on, Plan -0 DC: posit S5.p ize U.S. d .......................................................................... ively f an Departm d corre www.e late eb nt d ri. w o of irg/ th Labor, Em age pdf/ b an rie d fs plo te pdf nure. yee /020 Be0ib. ne Parti fits pd cf ipants S ecurity 37 in their Age Average A Group sset Zer A ollocation of 1–20% 401( >k) 20–40% Account >40–60% s by Parti> c 60–80% ipant Age and >80–100% through equity to the databa funds, se co would ten mpany sto dc k, to pull down the aver and the equity portion o age f balanced f account bal unds; participa ance, 86% which co nts in their 30s uld then be m , on average, istakenly had 39.2%(Median Age: 45 Years) offer Relationship of Age and Tenure to Account Balances Withie n d th target e yea-date r-endfun 201 ds, 0 E 53 perc BRI/ICI ent 2% data hel ba d ste hem it isat pos year-end sible to 20 link 10. indivi Tar cduals get-dat across e fund plans assets across a majority c represented 17 of th percent e of salary. For an analysis of 401(k) participants’ contribution activity during the bear market of 2000 to 2002, see Holden and Holden, investment me Figure asur29, e Sarah d b Average Asset a yl lth o , cations. Peter e numb Bra er Bala d All of y, nced o and pcation artiM c fu ip ichael nds, a for nts 401(k w in th H hich adley. T) e ai rget-date Pl n pclu lan an 2006. d )Parti .e N lif ine “401(k) Pla es cipants ty tyle -three an With d n perc tar s: og uA et-date t ent Equ 25-Yea of plans with ity fu Fund Balan r nds Ret,rospective.” have more than ces, increas byIn Participa ed vestment 10,000 in popularit n partic t Com y i p p ants any contribution 101–250 20s (DC) plans, see Po E 60. qu 8% ity Ta 61. rget- 1% terba, date 60. Venti, and Wise (2007) and 5% Bal 7, a389 n58. ce1% d 53. Bond 9%1,170, 49. M 655 6% oney Holden, 49. G 8% ICs Brady, and Ha /S45. t$63, ab 4% le- 010, C562, 40. om 0% pany 582 dley 35. (2006). 4% 15% 32.9% $53, 32. 825 3% 30.3% 22 EBRI/ICI 401(k) E quity database in 2010 date vs. B 2008 alanced D OL BF ond orm 5500 Money for alGI l 401( Cs /Stabl k) e- plans Company trustees, or ot 280 her sponsors of EBRI, EBRI-ERF, or their staffs. Neither EBRI nor EBRI-ERF lobbies or takes positio ans on Percenta10% ge of Account Balance Invested in Equity Funds perce 10 ntage of 16% participants holding no equity funds varie 82% d with age, with 63 percent of participants in their 20s, 42 per- At year-end 2010, 2.0 percent of the participants in the databa 11 12% %se were missing a birth date entry, were younger than 20, or $70,000 20s 9.4% 1.7% b Figure 16 2.8% 5.8% 19.9% 60.4% Bogda 60s—havin Administration n, 90 Mic % g hhael, ad more Sar (Fe ah b time ruary). Hol dto en, accumulat A and Da vailableni at e el as ww Sc se hrass. w.dol. ts—tende 20 gov/e 11. d b to "Ow sahave /p ndf ershi /20 high p 0 5e of p r e ratios, Mutua nsionplan l whil Fubul nds, e those letSha in.pd rehol in f thei der r 20s Sentim had the ent, and lowest 73 This system of 401(k) percent inv descri Inv Pla est bed n ested ment Lo a classification d s an an in equities; participants in their 40s h O Activity indi ptions A cation Var oes ies m that not consid With ong 401( balan Partic ce er k) ip s the number ant Pl are de an Part Age, a clin d Tenure, Acco 69 of in ic g percent distinct investment options i,p but actually woul ants invested in equities; pa Wi unt th Balance, Two or Few d tell us and presented to a Salary nothing e rticipants r Y ................... ears of about in their 50s had given participa Tenure 37 n 22 t, 30s 61.9% 12% $4, 62. 400 3% b 61. Percentage of recently hired participants holding 6% 60.0% 57.2% 53.3% 52.3% 47.6% 43.6% 40.4% 37.4% 36.2% 33. a 6% 251–500 Funds 3,514 Funds 1,243, Funds 600 Funds $63,343, Funds 209,885 Value Funds $50, Sto 935 ck the recordke assets of Age epers Group plans . This Fu onds improve ffering F such s unds the i fud nds entifi F in unds ca their tion 79% iof active partici nvestme Funds nt Flin uneu dspps. ants Value anF d unds resulted Stoc in kthe O reclassific ther Unkation now nof nearly Total 1.2 VanDerhei 60%(2004c). For summary statistics on contribution activity in 2010, see The Vanguard $65,454 Group (2011) and Aon Hewitt Investment among There incluInstitute Age ded is a 40 or a 1(k posi loa T Co e ) P n nur mpany e tive partic rspective provision, e ............................................................................................................................... correl ipants. Institut atio 12, coRecently n mpared e. no. 2 (Novem between Quart w hir erly i th age an ed 3 Spartic 4 ber u ppl percent d ).ementa acco ipants Availab unt of ry i n le pl bala ans Data 2at 010 w nce with . ww.ici.or te Washin amo nde 10 or d n g to be mor gton, g/ fewer partici pdf/ DC: per p partic ant e 1 Inves 2 lik s -0 ipants. ely covered by 2.p tment to df hold Th Com ere bal th p was e anced an 2010 y modest vari Institute. fu ... database. nds 28 ation $4,167 15% Zero 1–20 a% >20%–80% b >80% specific policy proposals. EBRI invites 15% comment on this research. $4,089 cent of participants in their 40s, and 49 percent of participants in thei br 60s holding no equity funds. The percentage of older than 69. They were not 40s260 59.8% 30s 60. included 6% 59. 9.6% 5% in this analysis. 58.8% 2.9% 55. a,b 9% 52.6% 4.1% 52.0% 8.4% 47.3% 43.6% 20.9% 40.7% 37. 54.2% 9% 37.0% 34.4% $3,972 2 ratios 501–1, (Figure 000 Plan 17). Size b In $3, y Nu 902 additio mber o nf, Pfor aMedian Account Balance rticip any ants given 2,120 age and ten 1,494, ure 659 com Among Long-Tenured bination, $81, the 507, ratio o 444,900 f account balance $54,to 532 salary varies Use of the Internet, 2011." ICI Per Resear 74% centage of ch Perspectiv acc$3, ount balanc 832 e 17, n $3,893 o. es 5 (,O 1998 and 2010 ctober). Available $3, at 889www.ici.org/pdf/per17- but 59 percent invested in equities; and participants in rather the t consistently ypes particip of options presented. Pre ating balanced fund assets, workers. Simila $3,824 liminary rly, their 60 rese t1998, 2006, 2007, 2008, 2009, and 2010 he ar aggre s ch analy had 49 p gate zercent ing 1. avera 15% 4 million participants drawn fr invested in e ge account quities. balance would om the 2000 tend to be Introduction Average 20s Loan Balances 36.9% ......................................................................................................... 27.0% 10.4% 7.2% 2.6% 4.4% 6.7% 1.6% 3.............. 3% 100% 37 million Prior to 2005, participant the accou U.S. Department of Labor nts that were multipPrivate Pensio le accounts on Plan Bulletin wned by sing lupdates e individuals. reported a count of a This procedure ctive allows 401(k) plan EBRI and (2011). $3,700 Average compare Examination in partici p d . ant wit 20 oh lfo 08b. an rec thee activity a Privat nt ge hires in com e by Pp e osition pla nsion thn e size, ran past. Po lan f acc $3, Si Bxty-thre ulletin, 659 o ging unt 14% balanc from Abstra e perc 19 es ct ent pe finds of rcent of 20 rec that 06 of pa e $3 For ntly 51 ,661 m r percent ticipants hire 5500 d partici Annu of with $61,346 parti p aants l loan Re cipants ports s in outstanding in 20 . with 10 Washington, h e ald ccount bala 401(k nce balanc DC: d ) f U.S. unds, plans es of 50s 57.6% 58.8% 57.4% 57.9% 53.9% 51.2% 49.5% 45.2% 42.3% 39.6% 37.8% $3,37. 619 6% 34.4% 80 A %ll 4750s .0% 6.8% 30.4% 15.8% All Plans b $60,329 1,001–2,500 40s 10.5%1,656 4.0% 2,620,385 5.2% 9.7% $142,917,466,974 30.1% 40.4% $54,541 401(k) participants holding n S&P 500 o equity funds also varied with tenure, with participants with five or fewer years of tenure Holden, Figure 30, Sarah . Asset Allocatio 20, 10. and Da “America niel n S tno chrass. s Equities Var Committed 2011. Participants, by Age and Salary, 2010 itDefi ed o Savin Widely ned gContri for Am Rong bution etirement: 14% 401(k Pla)n ICI Plan Participa Pa rticipants’ Year-End Acti n Dat ts .................................. a vities: .” News First rel Ha ealf se 2(A 01pril 1. ICI 26 29 ). 69% 26% Asset Allocation b somewhat 05.p 30s df wit 24 Plan 0 h salary. A 47 sset .5%y For example, s Inv 15. estment Options and Age, Salary 8% amon 7.5% g partici 8.8% pants in 3. th 1% eir 20s, th 4.9% , 30s e and Plan Size ratio ten 7.0% ds to increase 2.3% slightly wit 3.2% 1h 00% salary for EBRI/ICI 401(k pulled do)wn database sug if a large nu gests that the mber of olde sheer number r participan ts of in retired and rolled vestment 24% options over presented does not influence participants. their account bala $58,351 nces. In 50% Figure 23 $58,328 14% participants that had bee 60s 1–100 54.1% n ad 55. justed from the number of acti 5% 53. 45.1% 6% 55.7%16.6% 51.0% ve 49. 6.1% 5% participants 47.8%13.8% that 43.9%was actual 6.8% 40. 13% 4% ly 38. reported in the Form 5500 f 4% 5.3% 38.7% 0.1% 40.5% 36.8% ilings Refer 23 ICI 4 401( to ences begin K ............................................................................................................................... )to P P consolidat LAN A e S S account SET bala AL ncL L es OCATI for individu Percentage of Account Balance Invested in Balanced Funds O ON als , across dat ACCO Oa UNT providers BA A to LANCE provide a mor S S,e AND ............. >5 accurat –10 Years L 42 e estimate OAN Over the $60, pas 000 t three decades, 401(k) plans have grown to be the most widespread private-sector employer-sponsored compare less with Departm than 26 2,501–5, to d $1 Awit 100 g000 0, e eh 000 G nt partic 6 rou 1 o fw p perce Labor, Em eipants re in nt t o h to 23 perc feir rec plo 2 B e y 0 alanc ntly ee s or Bent ed F hire e 30s nefits 707 o unds d f(Fi partici participants i g Sur ecu e p rity 1ants 1). 2, A Si 474, d in mini n milarly, 2 605 401(k) pla 0stration 09, 60 59$56,878 pe per n (Dece s rcent cent with $141, mo 671, of ber). 10 or f rec partici 469, e Availa fewer 879 ntp hires ants ble partici with in at20 pacc 08 an, ts o $57, 53 unt or 5,001 to 250 percent balanc es of 38 At year-end 2010, 9.7 percent of the participants in the d 50s20% 12.8% 6.1% ataba 7.3% se were missing a date of 19.1% 29.1% hire entry an 25.5% d were not included in 27% more likely not to be invested in equity funds. The percentage of participants holding no equity funds tends to fall as 31 For year-end 2009 data, see Percentage of plan Holden asse $55,502 , VanDe ts rhei, and Alonso (2010). Research Available 40s All 101–500 at Report w48 ww.ici.or 60. .0% 5% (Octob 61. g/ 1er 1. pre 0% ). 4% ssroom/news/ Av 60. ailable 45.4% 0% 6.9% 58. at 7% www.ici.or 10_ 16.8% 55. 9.8% news 3% g/pdf _trow 51. 3. 5.6% 6% 5/_ % ppr_1 am_saves 51.0% 1_r 14.2% 6.7% ec_s 46. Te 3% urvey-q2.pdf nure6.0% 42. 7.9% 0% 38. . 2. 7% 8% 5.9% 36.2% 2.9%0.5% 35.5%100% 33.0% low-to-moderate salary groups (Figure 18). However, at 9 high salary levels the ratio tends to decline somewhat. A 1 30% Participant Age Group 1998 On At year-end 2 average, pa addition, 70% 20s rticipants cha 010, 64 percen nges have in the sample of re 10.4 t of balanced distinct op 63< .0 100 % mutual fu tions cordkeep but, on nd as ers 8622 average, choose only 2.5 (Hold sets 4. an 5d % were 0.19153 change invested in equities (see Investme s in 19.1532 the 20set of pla .2% en ns and for Vawhich nDer 12.3 nt % hei, Company In they kee 2001b). In p stitute, As d iAverage Asset Allocation of 401(k) Accounts, by Participant Age and Investment Options scussed 5,001–10, 220 000 above, asset allocation vari371 es with partici2, p610, ant 260 age. Thus, Figure $170,372, 23 981, presents 833 the analy 12% s$65, is of asset 271 to of exclude: (1) individuals eligible to participa average account balances per individual.te in a 401(k) plan who had not elected to have their employers make retireme Figure 100% 31, nt Asset Allocatio plan in the Unite n D di stribution States. In of2 4 010, 01(k an ) Partici estimp aa ted nt Account 51 millio Bal n America ances to n w Balance orkers dwer Fue nd as, ctive 4 0 1 ( k) pl an Endnotes 10,0 C recent greater opww y 0right Inf 0 hires partic w.dol. than ...................................................................................................................... in $ ip gov/ 100, ants 20 ormation: 07, ebs 00 (Fi 0 33 ag /w ur p perc e de re f / 44). 200 This in ent th 6 Loan re of p eir ens port rec 50s ion rati eis nt plan or o copyright hires s—the 60s. buNon-T lletin. in The amou 2e0 d arget pdf 0 posi 2 by the Em nt , and tive -of the 29 correl ploye percen loan atio outstandin en t Be b of r e nef twe ecent it eR n g e ag di se hir vided arch e es an in d Institut by 19 acco ........................ 98 the unt (Fi e re(EBRI g mainin bala ure nce 3 )59% 4 g a). n bala is e 46 d At y by xnce— pecte ethe ar-e d nd Brady, S Peter. ource: T a 200 bulatio 8. ns“Measur f60s rom EBRI/Iing CI PaRetir rticip 17.9% ane t-D men irectet d R Resource etire8.2% ment Pla nAdequacy. Data C12.4% ollection” P Jour roject.nal 23.3% of Pension16.8% Economics an 21.4% d Finance. (Published this A ACTIVIT analysis. 501–1,000 Y Y IN 201 10 44.9% 15.3% 5.9% 13.7% 5.4% 6.9% 2.2% 58% 30 Age Group >0–50 percent Figure 37 $51,569 >50–90 percent >90 percent salary increas 50s es (Figure 40.3% 27). 10. 0% 7.1% 12.2%Figure 47 4.6% 11.2%a 8.7% 3.2% 2.7% 100% 30s 46.6% 5.9% >30 Ye 30 ar.4 s % 17.1% >10, 40 000 % 348 10,508,579 $673,316,270,459 $64,073 similar total N patt ote: Salary Range Tern h2 e an occurs amon alysis includes 401(g k) p partici lan particp ipants ant20s 100- s wiin th t500 wth o or eir few60s er year (Fi 30s s 6971 of g ture enure 19). i0.15486 n the year in40s dicat15.4856 ed and in a plan off50s e ring compan dy stock as an 60s investment Quarterly Supp addition, records the preliminary analy can lementary Data also influe). sis nce found th the chat ang 401(k) e in aggregate av participants are not n erage acco aïve—that unt balance. Thus, to asce is, when given “n” options, rtain they do not what is allocation by investment options and also by Percentage of account balances, participants’ age. Salary information 2010 is available for a subset of contributions; 1,001–5,000 and (2) nonvested former employees who had no 44.4% 13.6% 6.2% t (at the time the Form 5500s were submitted) 12.9% 4.6% 8.2% 4.4%incurred the 39 Holden, by Age Sarah E . quit ........................................................................................................................ 20 y, 11. and Jack “The U.S. Van Retireme Derhei. T2001a arget nt Ma -dat . rket, “401(k) Pla e dat Secon e balan- dn Quarter Asset Allocatio B20 ond 11” (S n, eptem Account Money ber ). Bal Availab ances, GICs le an .................... at and Ot d Loan her Activity i 29 Com n 1999.” pany Investment participants. 20Co 0 Bmpany y year- AlI end lnstitut 2010, e (I40 CI). 11.8% 1(k It may ) pla $49,024 n be assets ha 4.5% used with d gout rown 6.1% permission but citatio to represent 17 12.6% percent n 24.9% of the of all source retirement assets, 40.0% is required. vary 201 because 0, online only sli 48 perc youn 20s by gh ger ent Cam tly wh workers of b rid en rec ge parti ently Univers arcipants e hire liked ity ly 40 ar to Press on 1(k e hav gr ) 84.9% ouped e partici low See ptem p r based ants incom ber hon e es 8, ldth and to target 2e 008. size of ) -dat hav Avai 7.3% e their elabl fha unds, d e 401( lat ess whi ktim ) le p le ans 17 to acc percent (as u m mula e asured he 7.8% te ld no a bala b n-tar y the nce get numb w -date ith er the of ir 40s 41.8% 6.7% 33.2% 18.3% See Holden et al. (2008); Holden, VanD op 60s tion. 34.1% 9.1% 6.9% erhei, and Alonso ( 14.7% 2009); 6.2% and Holden, Van 16.5% 7.0% Derhei, an 2.9% d Alonso (2010) for data f 2.5% 100% or All 64,455 23,441,185 $1,414,179,196,794 $60,329 B By Jack Van $50, 60%000 De Derhei, EBRI; S Sarah Holden, n ICI; Luis Alo onso, EBRI; a and Steven B Ba ass, ICI >5,000 401(k) Loan Activity Varied Across 401(k) Plan Paticipants $47,004 Many Recently Hired 401(k) Participants Hold 40.1% 8.5% 7.8% 10.4% 3.8% 12.5% 11.5% .$20,000–$40,000 20 99.9 10a. plPrivate an ass ets Pension Plan $6,299 501- Bulletin, c 1000 Abstra $16,910 3481 ct of 20 0.07733 07 For $46,555 m 55 7.73281 00 Annua$64,342 l Reports (Version $53,250 1.4). Investment Options >20–30 Years 24 3 28% 4 divide happ their ass 30s ening ets to among all “n.” Indeed, less than 1 p 401(k) participants’ a 86.0% ccount balan ercen cet s, of participants followed a “ a set of con 7.6%sistent particip 1/n” ants asset allocation strategy. must 6.4% be analyzed. Age participants Funds 50s in the 2010 EBR TotI/ICI al 401(k 43 funds ). 1database. % ced f Beca undsuse 8.2asset alloc % Funds ation is i 33 F.7 n unds fl %uenced Sby table-V th $45,519 e 15 ain lue F .0 ve % stment unds optiS otn oc s k break in service period established by their p Source: Tabulations from EBRI/IC lan I Par (see U.S. Depa ticipant-Directed Rrtment etirement of Labor, Employe Plan Data Collection Proj eect Benefits Security Administration, . amountin The positive correlation betw Investment ww 80% Source: w.ici.org/in g Tto abul$3.0 ations Co fo/ret mpany from trillio EBn. R _1 I/ICI I 1_q2_ n In an Pstitut aeen rticipant-Di data.xls ongo e tenure Pers rected ing pective and Reti collaborative rem account balance is expected because ent 7, Plan no. Data Col 1 (Jan effort, th lection uary), Proje ect. Em and ployee EBRI B Issue Br ene long-term fit Rief esearch , no. employees have 230 Institute (Febru(EBRI ary). had )Avai mor anlabl d e th time e e plan balanc current Epartic Bed R employer. In I Efu m ipa nds, ploye nts). eand Be Amon ne2 additio fitperc Rg esparticipants ee an nt rc , hthey he Instit ld ut are les bo e I th in ss ue B plans target-date s likely to rief with (ISSN 100 or hav 08 an87 d e ? no rollo 1 3 fewer n-tar 7X) vers is g pu parti et-date bli fro sh m cipants, ed a mont ba previous lance hly th by e d the E lo employer fan unds m ratio ploy (Figur ee was ’sB pl ee na e 16 3 n fit5 in R ). percent e s thei At ear year ch r curr In of t -en stitent ut hd e e, plan Asse http://journals t Allo All catio All n of 401(k) Plan 42 .cambridge.or .0% 11.1 Particip %g/ac 42.0% tio7.1% n an /dts W isplayAbstract?aid 11.1% itho 11u .6% t Equity F 4. 7.1% 4=219 % unds 70 36 10. 11.6% 3 % 4.4% 8.0% 2.10.3% 9% 2.c6%8.0% 100% 32 earlier years. 180 a a 10 30% $43,215 GICs /Stable- Figure 32, 40s Asset Allocatio >$40,000–$60,000 100 Plan As ns D ets istribution --Percentage of Eligible Participants With 401(k) Loans, Equity $13,447 of 1001- 84.1% 401(k 500 Target-date ) 0 Partici $28,757 9054 panNon-Target-date t Account 0.20113 $64,237 8.9% Balanc 20.1128 es Bonds to Balance $89,151 Money d Funds, 7.0% $85,486 Company Year-End 2010 Snapshot of 401(k) Asset Allocation Other research suggests th Washington, DC: Equi U.S. ties incl De at ude pa most 401(k) participants do no equi rtment ty funds, of com Lab pany or, stEmployee ock, and the equi Bene t make activ ty por fits tion Se of bal cur e anced changes to t ity Admin funds. “F istration unds” heir incl asset allocations during a ude (June mutual ). funds, Availabl e at ny InvesN tment ote: The m o 60 edi ps tions an account bal are grou ance at year-end 2010 w ped into ei 49 ght . c a2% s $17,686. broad categori 20s es 8.7 .% Equity funds consist 29.1% of pooled investm 13.0%ents primarily High Concentrations in Target-date Funds 5 Deloitte/ICI 11 Future 00 13th De research Stfined . NW, S Contributi uite will exami 878, W on/401(k) ashingt ne on linked dat , D Fee Study (2011) d C, 20005a -40 to analyze t 51, at $30a 0ta per he indicate th year consi or is s intent at clu in 2010, the >10–20 de sample of pa d asY p ears art of a median numb member rticipants ship sue bs in the EBRI/ICI r of investment cription. Periodi- Group Recommended C availabl 1998 e to Ppa lans W 2010 rticipants, ithout C itation: 1998 oFi mp gure any Jack 2010 Stock, 24 presen Van GD IC erh 2010 s /Se ts tabl i, asset Sara e-Valu h 2010 e Funds alloca Holden, tionLuis A 1998 by salary lonso, 2010 range and Steve 1998 and by n 2010 > iBass, n 2–5 vestment Years “4 1998 01(k) optPlan i2010 ons. Asset Al Partici 1998 plo acation, nt 2010 2008a an Sourd 200 ce: Tabul 8b for further atio ns from $41,156 EB RIdetail). This change in metho /ICI P articipant-Directed Retirement P lan dology Data Cresults in a dramatic in o llection P ro ject. crease in the number of individuals to accumulate an account bal at ww 50w %.ici.org/pdf/per0a 7- nce. 01.p However df and ,w a rollover from a previous e ww.ebri.org b /pdf/briefspdfmployer’s /0201ib.pdf plan could interfere with this positive Investment Company 13.2%Institute (ICI) collect annual data on millions of 401(k) plan participants as a means to remainin 200 accounts. 9, 47 perc g 50s asse ent ts in of 20 rec 10, ently while hirein d plans 401(k ) w 81.1% partici ith more pants than held 10,0 target 00 partic -dat 10.7% e ipfunds, ants, th 17 e loa percent n ratio h e was ld no 12 8.2% n- perc target ent -date (Figu balance re 45).d * The assets do not add to the total bank collecti v because of roundi e trusts, life insur ng. ance separate account $39,885 s, and any 40s pooled investment product primarily invested in the 32% Funds Funds Balanced Funds Funds Funds Value Funds Stock by Participant Age, Tenure, Account Size, or Salary, Selected Years MacDonal Participa cal by a sTenur po nd, ts sta >$60,000–$80,000 16w B g 0e e 100 o i th ..................................................................................................................... ra nnie te no Par pai -Jean equity d tiin c iW pants ne, asf h und and in- gt -o bala n Kevi , DCnces n ,$29,585 an D. > d 5000 a may Moore. dditiostill hav nal 2 mail 011. $52,663 in 16888 e g “Moving o exposur ffices. P 0.37516 O e Beyo S T to t MAS $110,116 h nd e TER stock marke t37.5156 h: e SLimit end ad adr ti$146,503 es ons t s through com ch of anTrad ges to: ................... itio EBRI nal p $144,240 any Is R su estock or pla e Brie c 30 eme f, 11 00 nt given year. For example, an I Tenur 1–100 e (years) CI survey of re 45.0% cordkeepers 18.0% coveri 4.1% ng nearly 2 17.0% 4 million DC plan participant 7.6% accounts found that Figures Brady, ww RPeter, ow.dol. w perce nt gov/ebsa/P Sarah ages mHol ay nod t en, add t DF/2 oand Erin 100 00 7pe percen n sionpla tShor becaus t.e n 2010. obulletin. f ro undi“The ng. P pdf ercU.S. entage Retirem s are do llae r-nt weigh Market, ted average 2009.” s. Investment Company Institute When invested the instoc stocks, including equity k market rises in value mutual (Figu res funds, 7 and bank 8), t co hllective e percetrusts, life insurance ntage of 401(k) asseseparat ts investe e acco d in unts, equities t and eoth nds e r to 40 Percentage of recently hired 401(k) participants Account options offered among the 52 data $40, Ba 60s coll lan 000 ectio ces, $37,323 and Loan Activity n effort from 2003 throug 5 plans in the in 20 77.0% 1 su 0rvey was 14 ,” hE 2010. BRI Issue (see Brie Deloitte and Investment C f, no. 36 12.4% 6, >5–10 and ICI YearsResearch ompany Perspecti Institu 10.6% tve e, 2011). Plan Vol. 17, no. 10, AL asset L allocation also vari securityes indiwith cated. plan size (Figure 25, top panel), but much of the variation can be explained by reported as active participants in 401(k) plans; in 2004, the number of active participants increased to 53.1 million (new correlati accurately Investment Options, All Ages For 13t 60% year-end 2009 data, see h on St. because a rollover could give por NW,tray Suite how thes 878, Washe ingto Holden part n, icipa DC, VanDe , 20 n a sh 00 ts 5-4 manage orr 0hei, and Alonso (2010). t- 51 tenured emplo . Copy their right 401(k) 2011y by ee a high a E accou mployee nts. B cco enefit unt bala Reseance. rch InThere is some discernible evidence stitute. 34% All right 9.5% s reserved. No. 366. funds, and 2 percent held both. Fi27% gure 41 Barclays Capital U.S. b 20% 0–2 34% 101–500 46.6% 62.1% 17.7% 4. 4.7% 0% 17.4% 21.0 7.3% % 12.9% A target>$80,000–$100,000 -date fund typically rebalances its po rt$46,872 folio to beco me less f$88,455 o cused on growth and $166,882 mo re b, c fo cused on inc$209,809 o me as it appro aches$216,922 and passes the balanced A fu llnds, 100 which Part ic inc ipants lu 8.1% de -tar - get-date 84.5% funds. Indeed, 75 percent 8.2% of participants with d no equity 7.3% fund allocation had Rates.” . 20 So01b. ciety b “of Actuaries (September). The Impact of Employer-Se Available lected Inat ves www.soa.org/research/resear tment Options on 401(k) Plan ch- Participants’ Asset 10.3 percent of DC plan participants cha 40% nged the asset allocation of their account balances in 2010 a Aggregate Bond Index nd 8.0 percent changed 7.6% rise; pooled Fun follo inv damenta win estments. 140g this ls pattern, 19, Similar no. 3 lassets y, (Ma 1996 boynd ). invested in Availa fund2000 s ble are ae any tq ww uitpoole ie w.ici.or 2002 s ind creased accou g/pdf 2005 n /fm as the t pri -v1 m 9n3. arily stock market went 2007 pdf investe d in2008 bo nds. up inBa 2lanced 0 2009 10. At funds year-end 2010 are Figure 20s 66. 1, 401(k) 9% 32.8% Plan 7. Ch 4% aracteristics, 43.9% by 34. holding the type of fund indicated, Number 9% of 9.0% Plan Participants, 5.1% 8.3% 2010 2010 4. .................................................. 0% 2.4% 3.7% 2.4% 10.7 5% 5.4% Sponsor T THE BULK Equity, bond, money, and/or Council of America 2011 indicates th OF 401(K) Participant AS S s iSETS C nclude the 23. ON 4 m T TiIN lliat on UE in 2010, the 401(D TO k) plan par B BtE I ici av pant erage n Ns V in EST the u yE E ear mb D IN -end er of investment fund 2010 EBR STOC I/K K ICS. I 401( On avera k) dat options available for abase.g ge, at year-en nd 2010, In Decem dif There fthe 15 year ere nces is a ber lso 20 in 501–1,000 1 athe s 1positive correlation between account . that the dat investmenatbase options ha 46.9% s obeen trackin ffered by 15.3% plan g bala loa spn ons n ac c5.5% e otivity rs an . d For e t amo enur x 18.1% n ample, e g among 401(k the )7.2% partici pla per n cpart entag pan icipa ts erepresented by t of nts, plathere has been n assets inves he 2010 ted little in method) Figure 33, from 44.4 million (old method; see Asset Allocatio >2–5 n Distribution 5 2 of .6% P U.S. articipant Department of Acco5. unt 0% Labor, Employee Benefits Security Ad Balances to Company >2–5 26 Years .9% Stock in 401(k 1ministration, 5.)4% Plans 2 008b and of rollover assets among the p tar ge t . dat 20 e o fNe 10b. the w fun Privat d, 401(k) which e is P u P se a ua a nsion rticipants lrti ly inc cliup P ded an lan i n with account balan t ts B he Te ulletin fund’ n sd nam Historic Not e. to Hol al ces Ta Fid gu greater tha bles Hi re gh C and Graphs 2 on nce $100,000, ntrati (200o 8 as ns Data 2 percent of them had two or fewer in Com Release pany Version 1.0 Stock ). 5.7% >$100,000 $37,168 $117,035 $251,001 $306,840 $299,460 100 19 Pl 98 ans-19 - 99 2000 20s 01um 2002 2003 45016 2004 2005 2006 2007 2008 2009 2010 41 investments Allocations: projects/pension balanced funds in eith Preliminary er Not/d e: com efau Rowp per a lt.as Fi ncent y ndi stock or p ages x ngs.” m48.6% ayWorki not ba add t lanced 4.3% ng o 100 per pa 14.2% fper unds cent pre a because of tp year- ared 6.3% end for roundi th 2ng. 0 e 10 C e(Figu nter 17.8% for re 28 Pension an ). 6.5% For exam d Rple, etirem 85 percent ent Research of the 30sAll asset allocation of their contribution c 67.8% 1001–5,000 39.7% 8.0% 35. 18% 0% 48.6% s during 2010 (see 28.18% 2% 14.2% 6.8% 17%Holden and Sc 6.5% 5.1%19% 10.17.6% 2% hrass, 2011). 4. 18% 1%6.3% 2. Covering a year 8%18%3.2% 21% earlier, the ICI survey 3.1% 9.21% 4% 4.1% >5–10 44.3% 6.6% 2006 33.0% 16.1% 201 pooled 0, GI 42 accou Csperc are gua nent trs a ninves tof eed 4 in0 vted e 1 s( tk) m P in ee nt plan rboth c cen ont trage partic as cttsocks . ofipa r e an nts’ ced ntbonds laccou y hired .nt They par batlanc i care ipa es nclassified ts was offeinvested red into comp two in eq anysub st uity oc categ k fun holories: d ds, ingon th te a arget-dat verage, compared e funds and In the database, there has been a downward trend in 401(k 3.4% ) plan participants’ holdings of and concentration in company This participant 6 62 percent of report contributions was 18 among the 12 is 0 an 401(k) 401(k) updat Plan Assets parti e of c EBRI cipants’ and as IC set I’ss s 820 ongoi were invest plans s ng research into urve e eyed; d in equity Hewitt 2010 401(k) plan s Associates (200 securities partic thro oi9b) p uants’ gh indicates an average equity f activity through u unds, the year eq num u uity -end ber of 20 variation. comp Among database. With any those Compa stock rises with Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. Fro A participant m who 19 ny 96 hel Stock, by throu d ’s bala tenure pg lan nced h D Part 20 size. ist with 08, fu icipant r nds, iT but o his an n a riemployer serv tAge v o e rend erage, cently n ........................................................................................ of emer 401( h less th ire ges, d k) participants es an in P 20s as one-fifth part, lans, a 2.8% proxy beca P in of 401(k a for u 201 rste ithe len c 0 fe ip were w )ant small partici g th s mo , of plans offered company re a pants n time a work like d A lwith y sto se hol acc ts er d e ss a has hi to loans h gh partici .... stock 31 pated ad as an in Year-End 2010 Snapshot of 401(k) Participants’ Account B 2010b). 10 As the Department of % Labor notes: “In a purely Percentage of Account Balance Invested in Balanced Funds economic sense and 0–2 for research Years a purposes, individuals in thes lances e years of tenure Choi, Was 40% James J. hington, , , and 6 percent David Laibso DC: U.S. De n, of them had b pa Bri rtment gitte C. of Madrian, Lab etween two and five years of or, Employee and Andre Bew ne Metr fits Se ick. cur 2.4% tenure (see Figure 12). 20 ity 01. Admin “Defiin stration ed Contri (Dec buti embe on Pe r). nsions: Available Plan at Equity, bond, money, and/or 2.0% Figure 2, Distribution $30, 30%000 > 100 5,000Plans of -401(k) - Plans, 51.5% Participants, 9.5% and Assets............................................................... 8.2% 18.6% 4.9% 1.7% ...... 7 40s 64.5% a 41.6% 9.7% 29.5% 23.7% 5.7% 5.9% 11.5% 5.1% 2.9% 4.4% 4.7% 8.0% 4.2% >10– S20 ource: Tabulations from EBRI3 /IC 7I.0 P% articipant-Directed Ret8. irem 3% ent Plan Data Collecti36 on .7 Pr% oject. 18.0% partici Np oants tAge Group e: “ Fui nds n their ” include 2 0 ms utwit ua per l fh unds cen out , t ba aege nk quity coof llec >0–50 percent tfun h tivei e r td rus acc sthel s, o lifd u e n i ns equitie t ur ba anc la en ss c epar e th irough at nd e i ac ca >50–90 percent cot e un com d tsi,n and p c any o any m p po stock, a on le yd ist nvba ock estlanced m, en 1t998 pro du f–20 unds, >90 percent ct pr10 imar or ily inv both. ested iIndee n d, Age Group (CPRR 6 Account balances are based on administrative records and cover the account balance at the 401(k) plan participant's current emp ) Current Pension Policy Issues Conference, at Miami University, Oxford, OH, June 8–9, loyer. Retirement 2001. Report availability: of recordkeepers covering nea 23 This r c erport ly 24 million DC plan participan is available on the Internet 2% t accounts fo at www.eb und ri.org that 1 and 1.8 atpercent of DC plan participan www.ici.org ts with non-tar 41g p et-dat ercent e at ye balance ar-e dnd fu nds. 2009, A tar 37 g perc et-date ent at fun year-en d pursues d 2008, a lon EBR 48 g-t I/IC percent erm I investment at year-end strategy, 2007, usin and g 40 percent a mix of asset at year- Percentage of plans, participants, and assets by number of plan participants, 2010 investment stock. 201 p portion 0. In the wake of the collapse of Enron in The of bal options in 2009. D reAp a a llo nced rt is divi funds, ded and into eloitte four compan C 48.6% o snsulting ectio y y stock ns 2001, participan : LLP, Interna 14.2% the . Thirt first y yd-three etsional 6.3% ts’ aware cribes perc Foundatio the n e ees 17.8% n EtBRI/ICI s of the need t were in fi n of Employee Benefit Plans 4 6.5% 01 x x(ed k) o -income diversify may databases;e e th cu e have increase ,rities and the secon suc d pres h h as ents d and stable a investment loans concentration the 40 balanced funds; and GICs outstanding. At 25 1(% k) pl op an tion. of Age Group .Note: the In For A idee r v er year acco exam age d, -e and u 62 and/or n nd ple, ts m perce edi 20 in fewer an 09, bala n 401 t t >0–50 percent of (nce h ktha )e lpa oan perce dn r f t aunds 1 percent icipants mon unts tage compared are with of c al of partic cp ul artici at account ed wi a >50–90 percent m p th ipants ants ong pbalan ast parwho ti icn years. At year ipa ces small nt were s w of ith plans less 401( offer k)tha e (100 part l-en oans d nloans with l d >90 percent .$ 10,0 2010, icipa 0070 ha n o ts perc d ans five or fewer ent outstandi or ofew f ) r ewere cently en r g years Morningstar. groups should 2not 011. be included in the count of Ibbotson SBBI The Em 2011 Clplo assic active part yee Yearboo Benefiicipants.” t Research Institut k: Market R However esults e, (EB the form schedule needed to for RI) was founded in 1978. Its Stocks, 0–Bonds, 2 Years Bills, and make the Inm flat ission is to ion 1926– ww the w.dol. sec savings held in plans at previous employers or rolled over into IRAs are not included. Account balances are net of loan balan u10 ri> t 0y2 gov/ebsa/pdf/h in 0– dic30 ated. istoricaltabl 35.8 es.pdf % c 10.8% 30s 37.3% ces.16.1% 50s Rules, 60.5% 20s Participant 37.0% 11. Decisions, 3% 27.3% and th 22. e 0% 40.1% Path of Least R 5.3% esistance.” 6.6% 14. N 13.7% 5% BER Workin 5.9% g 3.P 4% aper, 6. no. 7%865 46.2% 5 7. (D 8% ecemb 6.e 5% r). 4.0% 23. 23. 23. 23.8% 8% 8% 8% 20s c 12% Russell 2000 Index 11% 10% 11% 10% 10% 13% 13% 60s 31 Factors That Affect 401(k) Participants’ Account Balances Figure 34, Many Recently Hired 401(k) Plan Participants Hold Balanced Funds ............................................ 31 25 50 percent b of participants in their 20s without equity funds held target-date funds—which tend to be highly changed the other stable-value funds P as lans W set allocation of their a ith GICs /Stabl23. 23. 23. 23. e-V2% 2% 2% 2% alue Funds ccount balances in 2009 and 10.5 percent changed the asset allocation of their 2008 Figure 3, 401(k) Plan Characteristics, 43.0% by Plan Assets, 2010 13.4% ................................................................... 9.2% 8.2% 2.5% 18.2% ....... 7 end classes, 2002 or asset allocation, that the (Fi Long-tenured participants are used in this analysis to capture the longest possible work and savings history. The tenure varia gure 20s 20). Altogether, equity contribute to fund s 14.8% provid ecurities—e , to encourag er adjusts qui Figur ty e, an to b fun e 31 e d d to enhanc com s, 10.0% the e less fo equity e the developmen cuse portion d on g of rbalance owt of sound empl 75.2% th ble tends to be years and d fun more ds, foo and company cuse yee ben d on efit some plan sponsors changed Because 401(k 0% 20 30s % >30 ) plans were introduced about 30 years plan design (se 41.7 47.7% % e VanDerhei, 2 ago, 002) 11older and longer-tenured employees would .7. % In addition, some of this movement m 12.8% 33.1% 13 39.5% .5 ay % not be the res have ult of International snapshot v value investm of participant Society of Certified Employee Benefit Specialists ents and acco bon nunt d and mone balanc 22. 22. 22. 22. es 7% 7% 7% 7% y ya tfunds. year-end 2010; 21% (2010) repor the third looks t that the aver at participage number ants’ asset of funds offered allocations, inclu b din y the g offer ticked of hired 60s ten 201 e pa 50. u d up re, compa 0 rticipa 0% . to 21 percent . whi C 20 hicago 32. ln 01c. n ets y 4% 76 stock as an hold , “Contri percent IL: Mornin 12. ing 1% anba b d u o remained lanced t 23. finvestment ion gs participants 4% tar Befhavior Inc. unds 18. at 8% to h had p of with at tion, 4 lev mor 0account 1e whil (l k) 4. eat 6% th Pla e ye a6n n 0 ar-en ba 9 Partici percent 0 lanc 8. perce d 7% es 2010. However, not all pants gr nt of participants 17. eat o .” 7% f er 30s the Investment tha ir 7.acco 8% n $1 in unt 00 3.Co plans ,7% 000 bala mpany partici ha nce with 13. d 3% 17% p more than I inves ants n mo stitut re ted 11. have tha e 8% Pers in n 10 years 60s access balanc 5,pective 000 5.7% e to d of 7, 4.2% adjustment 30s is no longer required. Using Na 20% 19% tional Compensation Survey 18% 20% data and historical relation 20% 20% ships and trends evid 23% 23%ent in Cambridge, 20% MA: Natio 30% nal Bureau of Economic Research. 16% with the current employer rather than years of participation in the 401(k) plan. Particularly among older participants, job te 801–100 45.2% 13.8% 9.9% 7.6% 5.1% 15.3% nure may not reflect length Equity, bond, money, and/or 12% Who we are 11 Form 5500 concentrated 40s Deci-n 96 Jequity sec un-97 Dec-97 Jun-98 Decu -98ri Jun- ties 99 Dec-99 for Jun- 00that a Dec-00 J46.0% un-01ge Dec-01grou Jun-02 Dec p—as -02 Jun-03 Dec their -03 Jun-04o Dec nly -04 Jun-e 05q Dec 13.1% ui -05ty Jun-investment. 06 Dec-06 Jun-07 Dec-07 Jun- Another 08 Dec-08 Jun-09 Dec 1 -09140.9% J un-percent 10 Dec-10 Jun-11 of Dec-11participants . 20 21. 21. 21. 21. 10c. 3% 3% 3% 3% 30s Private Pension programs and so Plan B21.2% ulletin, und public policy AbstraFigure ct of 2049 08 through objective 11.3% Form 5500 Annu resear al Re ch and ports 67.5% educati (Version on. EBR 1.0I is the only ). contributions In any given y du ering ar, the cha 24 2009 (se nge e Holden and Schrass, 2011). Utku in a participant’s account balanc s and You e is the nsum g (2010) reported that 13 pe of three factors: rcent of DC plan stock—represented income All 64.over $20, 8% Sa000 l a time. 38. ry 0% a No b 9. out n-tar 1%62 g 30. e pte -date 7% rcent ba of 24. lance 401(k 7% d )f unds plan 6.0% par inclticipants’ ude 5.asset allo 7% assets. 12.4% cat ion 4.or 9%hybri 3.1% d funds, 4.6% in addit 5.i8% on to li 6% 8. festyle 6% 4.3% 40s of participation in the 401(k) plans; the regulations for the 401(k) plans were introduced about 22% 21% 20% 22% 30 years ago. 22% 22% 26% 26% 534 analysis regulations participated Figure 401(k) pla 35, of Ma put in place by the 401(k in 401(k) plans for their enti 101–500 ny n sponsors responding to that Rec ) partici ently pan Hired ts A Pension Protection Act of 2006 (PPA ’ s use o 40 se1(k t44.3% A f )tar llo re careers. The Re Plg a c et-dat question in th na Partic tio 14.8% n e, D ipants or is lif treib eir survey was venue Act of 1 cycle, Hold Target-Date u 6.9% tiofn unds; ), o which resulted in reg f 48.0% a 978 cont 0 21 in 2010. n1 d (k tFun h )e Pfourth ained d a 3.1% s r ........................................ tica provision that became Inter ip fo ua cuses lation nt 17.2% s on that limit the length par ticipants’ 31 4 01 n(al of k) time partici 401 tenure funds, (k) p compar (Fi plan ants gure lo we ans—factorin ed 12 re ). with offer Examining the interaction of bo 6 e1 d per co g mpany c in ent all i40 n stock a 2 1(k 009 ) , partici s 56 perc an inv pants estme ent thwi in 200 age an th nt an opti 8, d d o 48 perc without n tenure in 2010. ent with loan iTh n account access 2 us, 007 to , 4 in analyze 3 balanc the percent data es the reveals that, for base, in po 2tential 006, only an 18 ef d fect 7 pe per ao ce rcent given f n pt lan in the Form 5500 data, EBRI and ICI estimate the number no. balanced funds; and company stock 4, and EBRI Issue Brief, no. 238 37.0% (Octob11.4% er). Availa of acble tive at 401(k) participants to be 4.8% www.ici.org/pdf 13.9% /per0 S S S Shar har har hare e e e 7 8.9% about 51 million in 2010 an -0 of of of of 4.pdf P P P Par ar ar arttttiiiic c c ciiiipant pant pant pant and ''''s s s s A A A Ac c c cc c c co o o ount unt unt unt 18.8% d the Figure 4, EB 50sRI/ICI 401(k) Database Repr43.3% esents Wide Cross-Section o 13.3% f 401(k) Universe ................................. 43.4% 8 40s private, nonprof 22.7% it, nonpartisan, Washington, DC-b 10.7% ased organizat66.6% ion committed exclusively to This re 12 port 10%is bein $20,000 g –pu $40 blis ,000 hed simultan 53 eou .8% sly as an EBRI Issue Br 7.5% ief and ICI 27 Pers .0% pective and is avai 11.7lable % on both Plan Sponsor Council of America. 401(k) Loan A 2011. d 54th m An ounts Vari nual Survey ed A of Profit cross 401(k) Parti Sharing and 401(k cipants ) Plans: Reflecting 2010 Plan in thWas eir 50s20s hington, wi 501–1,000 thout DC: eqU.S. uity De funds 17% partment had 44.3% equi of17% ty Lab ex o15.7% posure r, Employee 17% Figure through 6.8% Be22 ne non 19% fits -tar Se 8.1% g cur et-date ity 19% Admin ba 2.3% lan istration ced 19% fun 17.4% (Dec ds, an embe 22% d anot r). her Availa 5 22% percent ble at participants Congressional Sources: B traded in their retirement accoun Budget loomberg, B Offic arclay es. Global Inv 20 11.e stors, Frank CBO’s43 2010 ts Russell C in 2009, ana Lon ompany g-Term , and S lyzing the plan tandard & Projections Poor's. s administered for Social B B B B Sec al al al alanc anc anc anc uby Va rity: e e e e H H H Hel el el eld d d d Addition nguard. A iiiin n n n Co Co Co Com m m mpany pany pany pany al nalyzing 2 In S S S S formation tttt50s oc oc oc ock k k k 010 data, Equity, bond, money, and/or PL funds. S S AEV NSE W N IT TY P Company HOUT E E COM RCENT OF stock PANY S is T e4 4 OCK, q01(K) PLA uity GI inCs, the OR OT plN N an’s S INC HE sponsor R S LT UD ABE E (t LE D TARGET he -VA em LUE ployer FUNDS - -). DATE FUN Money funds D DS I consist N THEI of thos R R IN e VEST funds M designed E ENT to participants Revenue 20% Code 60scould be required Sec. 401(k). The law went into effect on Janu to hold co Accou mpa nt 39.5% B ny astock contributed to their accounts by lances to B ary ala 1, 1980, bu nced 12.6% Fu t n it was not until November 1981 that proposed ds, b y their employer; specified rules regarding Age 47.9% 2% loan activity. size, had 199 age 8 ww grou ath (Figur loa e w.ebr p, rema n out av e i.org 36). erage ining standing /Conc pdf panels o accou /b entr at riefs n ye ation tf p ar-en bala Fi dfgure /100 is nces d highes 20 1ib. 25 te 10. gro pd nd tf u among rec to incr On avera p plans ease by gee, n wi in t over the past ly vestment th 6% hire tend u re. partic opti For ipants ons 15 exampl years, amo and pl with e, an th tar e sn g iaverage ze. g et-date partici accou fu pants nds;n with t at year balance loans -enof d 2010, number ? of 401 Ne a w contr (k) plans to be about 550,000. The estimate ibutions by the par public ticipant polic y r or eem search ployer, and of or th edu e bot cat number h; ion on of econ active 401(k) plan participants is based on omic security and employee benefit issu es a . 0% >$40,0 50s 00–$60,000 44.122.4% % 9.4% 10.1% 33.3% 67.5% 13.2% All index 1,001–5,000 es are set to 100 in December 1996. 42.6% 15.6% 6.5% 8.4% 1.9% 18.3% 60s 9%401(k) Loan Balanc 9% es as9% a Percentage 10% of 401(k) Acc 10% ount Balances 11% 12% 13% 11 organiz Figure balanced funds, company stock; 36, ations’ Recwebsites ently Hire at d 40 www.e 1(k) Part bri.org/publicatio icipants Now ns/i Hold H b and igher www.ici.o Concent rg/research rations in Bala /perspective 40s nced Funds ................ 32 Changes in Asset Allocation Betw Experience. Chicago, IL: Plan Sponsor ee Cou n Year-End 2009 and Year-En ncil of America. 1.d 2010 5% 13 held compa AllDi nystri stock as thei bution of 401(k) P r only equity lans, in 43.9% vestment. ParticipNin ants ete , and A en percent ssets, 1.4% 13.3% a, held b by I some co nvestm mbination ent Opti of ons, 42.8% target-date 2010 funds, Figure 20s (August). ww 77. 5, 401(k) w.dol. 8% 36. gov/ebsa/P Was 8% Part hington, icipa 7.8% DF/2 nts DC: 43. Represent 00 9% Congressional 8pensionpla 38. a 8% Range nbulletin. Budget of Ages 5.1% pdf Offic ....................................................................... e7. . 7% Available at 11.2% w4. ww.c 9% bo.gov/ 3.2% ftpdocs/123xx/doc12 ...... 9 375/08- The The ass Vanguard et b allocation path that the target Group (2011) reported that “despite the ongoing -date fund follows to shift its focus from market volatility of 2010, only growth to income over 12 [percent] of participants time is typically maintain a stable share price. Stable value products, such as guaranteed investment contracts >90%(GICs) and other stable L LINEUP AT >$Y Y 60 EAR-E ,000–$N 80D ,000 2 2010. At yea 36.2r rP % -end ercent 2010, 1 age of 1 P 10 percent of ar .3t% icipantsthe , 2010 assets in 38.6% the EBRI/ICI I 14 4.9 01(k) data % b base were the regulations notification Twere issued (see Holden, Brady, he S&P 500 is ><100 Participants 5of blackout periods; and ,000 an index of 500 stocksEBRI’s member chosen f N 42.0% umrequired 100–500 boer r mark and Hadley, 200 of et siz Pl11.0% an quarterly s eship includes a , liquidity , and industry tatements 6; 11.5% 501–1,000 Employee Benefit Resear cross-section of group representation. that 8.2% must pension funds; businesses; trade associations include n 1,001–5,000 2.4% ch Institute, 200 otice highlighting the impo 19.0% 5; and U.S. Int >5,000 rtance o ernal ; f outstandin 74 partici perc pants ent g, oif cn a recently b their out 60s 14 60 s hire perc witde h n partici up t of to t the pants w for o rema yea Par h 22.3% oining trs ldin icipants of te g accou tar nure Wg ith et n Loans -date t wbalanc as , $2 by fun 6,64 Par e dwas s t9.2% ic 9, hipant elc tdaken o mpared more than Age, T out enur as a we, i th 90 percent loan $202,3 (Fi 68.5% 29 gur of t for e 4 hpartici 6 eir ). U.S. account pants Depar balance in ttheir ment combination 0% of data from U.S. Department of Labor, Bureau 4. of Labor Statis 2% tics, 2007, 2008a, 2008b, 200 4.1% 9, 2010a, 2010b, $10,000 Less Than $10,000 >$40,000–$50,000 More Than $100,000 Tenure (years) and GICs and/or other stable-value c 16. 16. 16. 16.7% 7% 7% 7% 30s 77.9% 1443.9% 8.4% 33.4% 29.5% 3.9% 7.2% 13.3% 4.8% 3.7% Investment . T he R 20 pe >$ A80 l02. rformance u l ssell 2000 Index ,000 “Can –13. $10 5 4 0 0 measures the perf like ,1 00 (k) l0 y Accum explai 43.0% ons P rmance of ulati 3 a0.5 rtmu icip % ons ch a the 2,000 smallest nt sof Ge 13.4% the nerate chan Siz U Signi .S e 10 ges . companies (based on total mark of9.2% .7 Acf% cicant in ount 401(k) Balanc Inc8.2% e ome partici for 42 p et capitaliz F ants’ .4 2.5% utur % e a ation) inc sset Retirees luded in the R 18.2% allocations ?” 16 Investment u .3 ssell 3000 Index %over time. Co mpany Much of non-tar ? gTotal et-datie nvestment balanced ret funds, urn on or com account 11.6pany balan stock as their ces, which eq de uity pen inve ds on stment. the performa As a result, nce many of financia participants l markets wit and on h no made referred As with 05-Lon one or more portfolio tr previo to as the “glide path.” Since discussions of asset alloca g-Term us EBRI/I SocialSec 0–2 CI uurity pdates, ades Por exchan rojections.pdf labor un > analys 2–5 ions; h is ges of a during th ealth sampl 25 car >5–10 e prov e e of year, consistent iders and insur tiodown from 16 [percent] in 2008.” Aon Hewitt (2011) f n usually fo >10–20 2007 401 ecus o rs; (k) government org pa n the p rticipants >20–30 ercen(f atage nizations; or eof the portfoli xample, and service firms. >30those o investe that ohave und d in Distribution of Equity All Fund Allocations and Participant Exposure to Equities 12.9 19.7% Account Size, or Salary, Selec 10.5% ted Years 69.8% value Figure in nvested in ta fun 37, d s Ma , ny rg rare et-dat Rec reported as ently e fun Hired ds one category. Th and 36 pe 401(k) Par rcent ticipants e of 401 other Hold ( (cat k) High participan egory Cois ncentr the residual for tts ations held tar in Tar gettot -d gher et-dat ate investments, fund e Funds s. Also ............. known such as real 33 a as diversification Revenue Service, 1981). Inves (see U.S. Join tment Options Of t fCommittee on ered by Plan Taxation, 2006). Plans Participants Assets Poterba, funds 0–2 James, Steven F. Venti, 6% and 37.7% Davi 5% d A. Wis 6.6% e. 4% 15. 15. 15. 15. 209% 9% 9% 9% 07. “Rise 7.3% 5% of 401(k) Pl 7% 7.5% ans, Lifetime Ear 2.0% 6% >50nin -90% gs, 18.3% 9% and Wealth 7% 15.8% at of U.S. in 60s tar Labor with Gover get-date data mor (w n hich track m e e indicate that funds than nt sAccou the 3,000 largest U 30 (Figure years ntability lo 37). an of t .S. companies). amounts Of enur Fifty-t fice. e w (Fi 1o 9tend to g 97. perce ure “4 13 01 n be a t ).(k) of Simila rec Pe ne Snsio e gligibl antly larly, ryn Ra h Pla e the in 29% red portio gn e s: avera par Lo n tan icipants of ge Provisions pla accou n asse holdi nt bala ts n Enhanc g and t non-tar nce ho e at f Ppartici g ve arti etry -date cipation little pants bala gets in t but M nced heir ay fun 40d s s 2011a, Figure Ag 6, 401(k) and 2 e 011b; Part and U.S. icipants Department Represent Pe of a rcLabor, Range entage of Employee of Job Siz Acc e ount of Tenur Ac Benefits Ba clount anc es ................................................................ e Balanc In Sec ves utrity ed e in Administration, 2008a, 2008b, 2010a, 2 Balanced Funds .. 9 010b, 40s 74.0% P> lans W $1 45. 00 2% ,i00 th C 0o 9. m 9% pany S 29. tock 3% 26 25. .5 8% % 3.5% 10.8. 8% 3% 15.0% 6.44 0% .9%3.7% 17.9% Age Group >0–50 percent >50–90 percent >90 percent d 1–100 101–250 251–500 501–1,000 1,001–2,500 2,501–5,000 5,001–10,000 >10,000 All Plans Institute Perspective 8, no. 3, and 1– 1996 c 25 EBRI Issue Br 2000 ief2002 , no. 251 2005 (November 2007 40s ). Availa 2008 ble at 15ww 2009 w.ici.org 2010 /pdf/per08-03.pdf the equity moveme futhe nds nt al hlocation ad in t eh xe posur largest of assets in e tocomponent, equity-re an individu late ed quity inv al’s estments fun acd count; s, tethrou nds and 14. 14. 14. 14. to g6% 6% 6% 6% h recom flect poverall any stock or equity balanc market ed pr fuices, nds or both which gen (Fie gral ure ly 29). Formerly 177.7 12.4 the Lehman B 0.10847 rothers U10.8473 .S. Aggregate Bond Index, the Barclays Capital U Years .S of . A Tenure ggregate Bond Index is composed of securities covering government and that equities, been14.2 percent of participants traded in the in 15 the % the glide path gener Equi saty me , bond, m dplan oney sinc , e and/or a200 lly reflects 3) balanc is plann ed the funds e declining percentage of equities in th ir d. accounts in This additi 2010, and 14.6 40,638 onal analysis ispercent change exp 8,177,054 ecte e portfolio as it approa d to 44be d th pue $405,510,024,541 blishe asset allocation of their d in ches 2012. and p asses the estate Plans Without Company Stock, and GICs, >2–5 funds. Part The icipant final cat s egory, 15%unknow and/or Other Stable-Value Funds 14% n, consists of assets 12% that co 14% uld not 15% be identifie 15% d. a 17% 18% liifecycle funds s, they are de esigned to offe er a diversifie ed portfolio th hat automatic cally rebalance es to be more e focused Participa Retireme nts in nt.” 401(k NBER ) plans Working may Pape hold e r, qno. uities 13091 throu (May gh a ). vC ariety ambrid of gopti e, MA: ons Nati inclu onal ding B equity ureau fu of Economi nds, company c Researc stock, h. and converted with had 50s mor up G 70. roup to t e 3% Sth into Source: ow ua r1–100 o 39. n c e distri years of tenure was :9 T T 5% Z abulations 0 a e bulat rperce obutions 11. iofrom ns 3% n 1–1 t fr EBR o o 0% m ifn 28. I/IC the E any B I 3% Participant-D Ri1 r I/1–20 IC given acco $16,337, compa 34.2% I P a % 25. runt tiric ect year (m 1% ipant 21– ed bala Retirement -D 30% 14.7% irec nce eanin tNum 3. ed Plan 3inves 2% red 1–4 R ber e g Dtata i0% rem with t ofh ted C Part at ollection ent 4.3% 10. 41 icipant most loan i$132,209 n P 0% –50% lnon-tar an Project. s Din a 19. tPlan a 13.0% C 4% 51– s g o for et-date llec are r 60% partici ti6. on 5% eP pai 61 r9.4% ba op j–70 d ec an lan ). 4. t.3% % ts c ed in th 71– fun eir 80% ds 40s at8 year-e 1–9 with 15.6% 0% mor n91– d e 20 100 th 10. a% n 20 and 2010c; a Copelan Affect d, Sour 20s C Income Secur rai n ce: d analysis of sa Ag. T llabulations 2009. f“Indi rom ity EBRI/ICI for mples of cons vidual So Par me.” Account ticipant- 16% Letter Dir 36.3% istent Percentage of Account Balance Invested in Target-date Funds ec Retir ted Report 14% Retir plans in th ement ement , GAO-H Plan Pl 16% e ans: Data EBRI/ICI database. E Collec HS-98 An An 13% tion - aly Pr 14.7% 5 oj(Oct s ec is t.12% of the ober). 2 Was 0 16% 07 hin Surv gton, ey 15% of DC: 49.0% Consumer U14% .S. Gov Fina ernment nces, corporate bonds, mortgage-backed securities, and asset-back a ed securi 41% ties (rebalanced monthly by market capitalization). The index's total return consists of price 24.8% Figure 38, Asset Allocation Distribution of Account Balances to Balanced Funds Among Recently Hired 26 42 Source: Tabulations from EBRI/ICI 401(k) Participant-Directed Num Retir ber em ofent Par Plan ticipant Data s Collec in Plan tion Project. Age Group Of which: target-date funds EBRI’s work advances knowledge and unders 26– an 100 option 27. 27,212 9% 5,679,434 tanding of emplo $275,050,452,512 yee benefits and their rose Figure and from >5–10 7, Dom ww 19 N169.9 ote: w.e 9 $0 7 e At stic b throu year-end ri.oStock 0 rg/ .10371 g 2010, h pdf 1the a 9 /n 9 b av d 9 rie erage 24% , Bo 10.3711 before fsnd pdf account Mark /1 fa balance 10llin 2ib. 23% et g among Indexes pd thro f all ugh 23.4 million .............................................................................. 21% 200 401(k) 2, risin particiants 22% g a g wain as $60,329; from 23% the 20 median 03 account thro23% ugh b alance 20 w07, as $17,686. th 25% en Percentages droppin .... 11 do 27% g in Note: Per Percc entages entage mayof not par add to 100 per ticipants cent because of rounding. The tenure variable is generally years working at current employer, and thus target date, contributions. Table of Contents Plan-specific information on loan provisio There are two appreciation/depreciation plus income as a which is usually in 101–500 Hewitt Age possible expla Group Associates (2009a) repo dicated in the f nations 35.4% percentage of for the ns rted und’s is available for the majority of the pl low the original inv 14.3% that 19.6 percent of par account ba name. estment. The lances 5.3% target among t date 13.2% tgenerally icipants his grou ans in t made asset transfers 9.9% is the p: (1) their employer’s 401(k) plan ha hda e sample ( te at which including virtually al in their account the 14.7% typical investor l s of 30s Note: Row percentages may no t add to 100 40.9% percent because of rounding. "Equit 12.6% y funds” include mutual funds, bank46.5% collective o o 60s n income 59. Sour 4%cov e: T 35. e e abulations r 4% time. 11. from 8% EBRI/ICI 25.Par 2% ticipant- 22. Direc 1% ted Retirem3. ent 1% Plan Data 13. Collec 5% tion Pr 24. ojec 7% t. 12.2% 4.8% Note: The tenur45 e var .2% iable is generally years working at current employer, and thus may overstate years of participation in the 401(k) plan. balanc 20 ed s fu not nds. add to 100 percent Age Group 33.2 This sectio % because 3.8% n focuses of rounding. 3.2% fi>0–50 percent rst on 2.9% the investing 1.9% pattern >50–90 percent 2.0% of 401(k) 2.7% plan 1.5 participants % >90 percent 1.6% with 1. respect to 7% 45.4 equity % years ? Accountabi of t With enur drawa e. lity Office. ls, borrowi Availa ng, ble anat d loa www. n repaym gao.gov/archiv ents. e/1998/he98005.pdf W 20s ith m Market Ad aySour over cs e: tate Tabulations yjustments ears of par from tici pation EBRI/ICI to June in the 401( Par42.7% tic 2009.” ipant- k) plan. Dir ec E 8. ted B 429.6% RI Retir Issue ement Plan Brie Data f, no. 7.1% Collec 33 tion 3 Pr (Au ojecg t.ust). 10.7%Availabl 4.1% e at Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. Participa 100% >10–20 nts, 20s by Age 1996 1997 .......................................................................................................................... 27% 1998importance to 1999 30%26% 2000 30% the nation’s econo 2001 26% 28% 2002 2003 my 26% 24% among policy 2004 25% 2005 26%makers, 2006 29%the news 26% 200726% 2008 media, and 29% 2009 24% the public. It 2010 34 29% Asset Allo Note: Equi catio The 501–1,000 tytenur , n bond, m to e Equ variable oney ities is, gener and/or ally bal year anc 38.8% s 101– w ed orkfing unds 2,500 at c , ur11.1% rent employ 7.er 5 , and 3.1% thus may over13.2% state years of par 8.7% ticipation in the 401(k) plan. 18.1% Russell 20 40s t00 rus t86.2 In s, lif de eins x. u 0 Tacoma, ranc .05262 e separat W 5.26187 e A ac : cF oruan ntsk , and any Ru 40.1% sse po ll o Clo ed mp invany. estme nt product pr11. 11. 11. 11. 12.9% im2% 2% 2% 2% arily invested in sto cks. 47.0% Distribution of Plans, Participants, and Assets by Plan Size 3 2008, and rising in 2009 and 2010 (Figur 50s es 8 and 20). At year-end 2010, equity funds were 42 percent of the assets in the only All small plans recently been establishe 75.0% 41. ). 4% Some plans without this in 9.3% d 30. (83 percent of all 401(k) 6% 27.0% formation are classified as 3.6% -type plans in exis 8.2% 16. having a loan provi 6% tence 5. in 2008 7% 4. were 0% sion if any part established after 1989 icipant in the plan has fo balances durin 401(k) Plan Loan Activity Introductio r whom that fund is design n.................................................................................................................. g 2008, which was “up only ed wo Va uld reach retirement age and sto ries With Participant Age, Tenure, Account Balance, and Salary marginally” from 2007 (although, they tend p making new invest edments in the f to move larger portions of their ......................... und. 5 Balanced fund, target 20s b -date fund, and non11.2% -target-date balanced 6.4fund u 10.6% se varied somewhat78.3% by age group among See Inv 30s estment Company In 30s stitute (2011). 52.5% 22% 20% 18.3% 22% 5.9% 19% 19%12.6% 25%4.5% 22% 20% funds. 30 Th s e . ass 2003. e43.1 t allocat “4 %01(k) ion 6.Pl 0% oan f participan Asset Alloc 5.1% ts ation, without 4.4% Account equity 2.7% Balan fund2.4% s ces, is ex an plo d 2 red Loan Activity .5%next,1.7 beca % in use 20 1.9% 4 00 21 .” (k) Investment pa 1. rticipants 9% Company 28.2 holdi % ng no Figure >20–30 8, Perc 1,001–5,000 ent Change in Total 25% R does this b e 41.6% turn26% Indexes y co 8.1% nducting ..................................................................................... 25% and p 4.8%ublishing policy re 24% 14.8% 24% 7.4% search, analysis, 25% and 27% special reports on 16.8% 11 26% www.ebr 50s and GIC i.orgs /pdf and/or /briefs other p d stfabl /Ee BRI_IB value funds _0 38.1% 8-2009_No3322,334 3_SCF.pdf 13.0%6,125,588 $338,032,949,859 48.8% The tenure variable is generally years working at current emplo yer, and thus may overstate years of participation in the 401(k) plan. What we do 2,501–10,000 271.3 0.16561 16.5609 d40s 16% 15% 16% 13% 13% 18% 16% 15% The chanAbout the EBRI/ICI Database ge in any individual participant’s account balance is influenced by the magnitude of these three factors relative U.S. Among The the EBRI/ICI 20 Interna 40s 10 10 i% n divi EBR l dual Revenu 401(k I/ICI partici )40 data e 1(k Sp ebase, rvi ant ) database ce. s, the al compar 1981. “Not locatio co a53.9% ed ntai with ice ns n of account of Pro informat a 13.9% 41 p perc osed ion en ba on R lances t ule shar 64,4 Making, Certain 6.1% e 5 to at 5 equ 4 year-e 01i(k ties ) nplans 14.4% d (equity f 20 Cash 09. wit Balan h u or Defer 5.1% nds, $1.41 ccompa ed 4red tr fuillio nA d nrrangem s, y n stock, in wh assets an ich e and t inve nts Under st h d ein 2 3.4 >5,000 30s 34.0% 17.2%12.2% 4.7% 11.7% 13.4% 9. 9. 9. 9.3% 3% 3% 3% 9.2% 71.1% 19.1% 9. 9. 9. 9.2 2 2 2% % % % PLA an o acco [tabulations NS W u unt balanc tstanding ITH Gof U.S. Department of La IC lo es) s A an balance. . Fidelity Investments ( ND/OR OTHE This may R STAB bor L unde E20 -V Form 5500 data A 08) rL state the num UE reported that overall only 6.6 percen FUNDS for ber o 2008]), or (2 f plans offering loans (or participants eligible for loans) ) the employee t of participants in their recordkeeping only recently joined the plan The recently Figure M MORE N distri >30 39, hire butio 60s EW Average Asset d OR REC partici n of account pants, EN All T T a balances u o HIR n 13% cation d reES IN cently emplo of 401(k) Accounts nder yV V hir 16% ee benef 36.4% ESTED THE s ed cores partici its issues; holding educational br the 15% pant eff I Iby R e scts 401(K) in Part th of a ici eir 17% g pe ant 20s A A an 12.8% SS A were d gte ETS I e nure a 17% nd more iefings for EBRI memb N Inves on B B lik ac ALANCED ely tcount ment 18% to be O balanc p hi tions F F ghl 50.8% UNDS, INC ers, congressional and e 19% y s Among . concentrat In a give L L 19% n e UDING d a g in e S&P About 500. 40 the EBRI/ICI s New Of York, 48.1 w% hDatabas iNY: Sta ch: tar 6g .8% et- e n date dard ................................................................................................... funds 5.5 & % Poor an opti ’s. 4.8% on 3.0% 16,9192.5% 2.4% 4,466,445 1.6% 1.7% $235,136,454,086 ............... 1.7% 21.9 5 % equity In thInstitute e 20 funds 10 $70, EB c 000 Pan e R 50s rspective I/ hol ICI d 40 equ 1( 9, ik) ties no. da in t tab 5, hand a e se form 12% , EBRI 87 p of com eIssue Br rce 11% np t any ofief p stock a , 12% rti no c. 26 ipor ants 1 throu ( 10% S wer epgte e h mb in ba 10% pl lance er) ans . Avai d offering fu 13% la nds. ble at loans. Finally, ww 12%w.ici.or Ho thwever, e overa 11% g/p d as has ll f/iper nve0 stment been 9- 12 50s 933.1 0.56959 56.9589 37 > 47.4%  10,000 13.4% 6.5% 18.6% 6.8% 4 80% All 37.0% 11.4% 4.8% 13.9% 8.9% 8. 8. 8. 8.1% 1% 1% 1% 8. 8. 8. 8.18.8% 0% 0% 0% 0% All 40s 38.8% 18.1% 10.8% 13.3% 71.0% 47.9% Figure Lifestyle funds 9, Snapshot maintain a pre of Year-End determined risk level and ge 401(k) Account Balances nerally ........................................................................ use words such as “conservative,” “moderate,” .. 13 or to million 20s the starti Employee 73. partici 4% ng p 32. ants Plans.” account 4% (Figure 7. F 3% bal eder an 1a)ce. 49. l . R Most of 2% eFor gis texample, a er 34. the 46, 0% plans no. 217, contri in 15. th Nov 2% e buti database embe on3. of 9% r 10, a ar given 1 e 6. 9s 4% 5. 8 m 1 5 dollar amount all: : 55 2. 4 544 5 9% perc –5554 1. e1% n 7. 7. 7. t 9. produc 9% 9% 9% of the 9.1% es plaa ns lar 5. have g 8% er growt 25 or hfe rat wer e equiti equity The Employee e s portio an The .d 20 n fi EBRI/ICI Partic xed-incom 11. of Benefit Research Institute (EBR 60s ba “Tar lance get e d- se D fua curities, nds te ipant-Direc Fu) federal agen nvaries d also 10% Use i t ed in wi nc dely r 4 Retirement Plan cy e I) 0a 9% is a no s 1se ( taff, and th a k) d roun Plans in npro sha d 10% th and r e news fit, e e , avera no a the c Data cnpartisan, media; o 8% un P ge eti Collec rsistence of ng and sponsoring public opinion survey 6 f2 public po o 8% r tpercent ion 18of p Projec e Trc hei 11% licy for ent r research o t Use, 2 all is of the assets in the partici the larges 10% 007p r-2 ga ants 009. nizatio t, 9% in t mos ” s on emplo EBRI h n that d e tdatabase 2010 Isso y uee es no e at t because some (whether o Account Size n his o plans may r her owhav n or e offered a pla through automatic enro n loan, but no llment) participant . In either event, job tenure would had taken out a plan loan. It is likely that this o 22. not 1%accurately reflect actual mission system T TARGET-DA 401(k) made e Equi Pla ty T T x n , changes E FUNDS. bond, m Participants oney durin , and/or F F or g Wit September, ex h bal ample, Tw anco ed or fcunds Fewer Years of Tenure at October, , year-end and November 2 2010, 44 per ............................................................... 2008, a time of stock market volatility. Furthermor c cent of the ac ccount balances of recentl 35 y y hire, ed Choi group, such fu 50 shorter nds. s Fo r tenur 50.7 exam %e ple, tends 6 52 .9% to percent mean 5.3 % of rec that a e 4.9% hi ntly gher hi red perce 3.1% par nttage icipants 2.6% of partic in thipants 2 eir .4% 20s h will e 1.5 ld hav % me o re accou than 1.7% n t 90 bala percent 1.nces 6% of of t 19.3 less th heir % an 60s 40.8% 12.2% 6.3% 23.8% 9.1% in EBRI/ICI the eq case for 05.p uitied s 401(k) Data f acr an P the 15 yea lans W d oss www.e all 4 ith Cbase o0 m b rs 1ri.org p(any k) tha ...................................................................................................... S plan t/ tock and GIC p the df/ partic data briefsp ba ipa s df se /n Stabl ts /0 has tracke 903i is pr e-Valb.p u esent e Funds dfd e d. 401(k ) plan participants, relatively few parti ................. cipants ma 5 de use of 21.7% Tenure 50s (years) 17.9% 10.0% 72.1% Median 4.5 U.S. 30s De 73. partm 5% 36. ent 1% of Labor, 8.1% Bureau 42.2% benefit issues. of Lab 31.4% or Statistics. 2 EBRI’s Ed 10.7%007. ucation and Re 4. Nat 1%ional 7.1% Compensation sear2. ch 8% Fund 1.(EBRI-ERF) performs 6% Survey: 7.9% Employee 7.8% Bthe char enefits itin able, <$10,000 c 12% 11% 11% 12% 11% 12% 16% 16% “aggressive” when adde and c d in their name to indicate th to o a smalle mpany stoc r ac k count. On the e fu n other d’s risk level. hand, in Lifestyle fund vestment 626 retu s g rns enerally are inc 3,357,767 of a given perce luded in the no n $214,577,115,186 tage produce n-target- larger 5. date 1 dollar database. partici year-en Brief pants, d ,20 no. Fort 10 a36 n y . d Despit perc 1 30 (August). percent ent e th ofe participants i ncreases Avai have lable 26 to in at ha 100 sh ww d ares more than w. participants ebri.or of equity g /80 pe pd (Fi and f/b g rcent riefsp ur bala e 2). nced df of/EBRI_ In contrast, t 2008 heir funds ac IB_0 count an8- d only 201 th balances i e 2 1_ decreases percent No361 nvested _T of in t DFs.p thhe e in plans have more d shar equ f es ities, of GICs while lobby or take positi repre 1–100 sentativ ons on e repo legislative proposals. sitory of information 35.4% 14.1% about indi 6.5% vidual 401 8.3% (k) plan 5.4% participant 14.5% accounts. 7.6% As of is et al. (2001) found that 4 401(k) Plans With GICs small, as U.S. Government Accountabili plan participation. and/or Other Stable-Value Funds 01(k ) participants rarely made cha ty Office (1997) found that more than 95 nges after the initial point of e percent of 401(k) plans that offer l nrollment. (For household sur oans vey $10, account p participant 00 60 0. sbalan Fos r ie n n cx es 54.4 their 20s w 0–2 ample, in %bala 88 nce 6 .pe 3% e ed re rcent funds, invested i 4.4 of compared % partici 27% n n p 4.2% balanced f ants 24% with in th 4 2.0 eir 8% u u 27% percent nds, 20s cwith 2.4% o mpar of r 23% tw ece e e o d nt or 2.with 42 p 2% 21% hir fewer es in years 1.4 thei e e 25% % rcent r of t 40s 1.6% e in 200 nur and 3 22% e ha 9 9 8, d percent 1. and 5% account 19%abou of r 18.6 t bal 7 e% ce apercent nnt ces of 3.9 Figure Source: 10, Dist Tabulations ribution from of 401(k EBRI/ICI ) Participant-D Account a Ba irect lances, ed Retirem by ent SPlan D ize of a ta Account Collection Balance Project. .......................................... 4.3 14 U.S. this borro Joint Co win 1638.2 mmittee g privil 60sege. on Ta At y xation. ear-en2006. d 2010, Techn 18.1% 21 percent ical Expl (mid-point) of anation those e ofligibl 9.0% H.Re . 4, th for loans e “Pension had 401 Protect (k) 72.9% plan ion lo Act ans of outstandi 2006” asn g 40sSources 69.0%and 38.Type 8% o 9.f4% Data 33. ...................................................................................................... 4%educa 25. tiona 3%l, and scientif 8.1%Fig ic func ur 5.e 0% ti 28 ons of the Instit 7.7% 3.4% ute. EBRI 1.5% -ERF9. is a tax-ex 5% 13. ............. empt organizatio 0% 5 n $10,000–$20,000 26% 11.1 23% 22% Figure Figure Figure 46 17 15 26% 25% 4.026% 28% 29% Figure 40, Age Group Rec e Of ntly whHir ich: etar d g 401(k et-date ) funds Plan >0–50 percent an opti Participants on Tend to 430 Be Less Like >50–90 percent ly 2,471,571 to Hold Company $136,656,195,629 Stock >90 percent ................ 36 Private In 101–500 dustry in the United Stat 33.9% es, Marc15.4% h 2007. Washi Figure 8.6% ngton, 44 DC: 7.7%U.S. Department 3.3% 16.8% of Labor, Bu 6.9% reau of Labor 20s 60% >2–5 10.3 10.3 37.0% 24% 25% 29.1% 25% 14.6% 21% 22%5.2% 26%1.5% 23% 7.8% 20% balanced fu 5% .nd 20catego 04a. “4 ry. 01(k) Plan Asset Allocation, Account Balances, and Loan Activity in 2003.” Investment Company than increases 2,500 (or padecreases rticipants. ) Ho wh wever, en com partic pounid ped ants onan a d larger asse ts asse aret co base. ncen Atrated sset allocation also influences investment r in large plans. For example, 67 perce en turns t of 12 and perc other ent December sta hel bd le no valu e31, 2010, the EBRI/ICI database in q e uiti fun es ds, at money all at th fun e edn s, d and compa of 2010 (Fi Figure n gy ure cluded stoc 30 11 k, ). statistical most 401(k information ) participants about appeare : d not to have made had at least on All $60,000 e 46.6 plan particip % 6.2% ant with an outs 4.9% tanding 4.4% loan. 2.8% 2.4% 2.4% 1.6% 1.7% 1.7% 25.2% results in n 1998. A si from late 2010 reflecting households’ g8. nificant 9 All subse et of that bala a 15.6% nced sentiment toward fund cFigure a ategory and 19 is tar confid 10.8% g gence et-dain 401(k) te fund ds. plans, At yea 73.6% see Holden, Bass, and r-en nd 2010, 35 p perce Reid, nt of less hires than in th$1 eir 0, 6000 0s in in 20 2010, 10 (Fi cg oure mpared 38). w Con ith c55 entrate percd ent tarog f et-d partici ate pfun ants d iu ns e their ranged fro 20s witm h bet 41 percent ween five of and rece 10 nt years hires in t of heir 50s >$20,000–$30,000 63.6% 20s 36.0% 10.2% 28. 26% 9%supported b 21.25% 2% 26.1% y 8. co 3ntributions 7.7% 22% 8. Figure 20 4 and g 5.9% rants. 27%9.11.8% 3% 4. 26% 6% 1.8%26% 11.9% 62.2% 28% 19.0% 29% (Figur Passed e 46). by A 501–1,000 s the > in 5–10 previous House on J years, uly 28, loan 35.1% 23% 2 006, activity and 21% varies 15.0% as Consid wit 23% h ere age, te 6.2% d 8. 2by 19% nure, the 6.9% Se account nat 18% e on 3.1% ba Aug l24% anust ce, 3, an 13.9% 20 d 20% salary. 06. JCX-38 Of t 19% 14.2% h -06 ose (August 3). Deloitte 5 30s Consulting LLP, Inte Few rnational 401(k) Participants Had 401(k) A Ratio of 401(k) 47.8% Foun ccou dation n 19.2% t oBalances Greater f Em A Figure 8 ccou ployee Outstanding nt B 9.7% Balance enefit P Than $100,000, lans, to Salary 401(k) Loans; 6.4% and th, e I 1.9% nternational 9.4% Society of Certified 27 Equity, bond, m Percent oneyage of , and/or bal 401( Percentage anced k) funds Pl , an Part of Eligible icipant 401(k) s Wi Plan Participants thout Equity Fund Bal ances Investment Options ............................................................................................................................ 6 32 Figure The Investme Statistics. 11, AgeAvailable nt Composition Company Institute (ICI) is at www.b of Selecte ls.god v/ 40 ncs the national ass 1(k /ebs/ ) Accou sp/eb ns t m0006.p Balance ociation of U.S. invest df Cate gories ................................................ ment companies, including mutual f 14 unds, It is possible t Institute Peh rspective at these older, longer-t 29 A.g 8% e 10, Composition no. 2, and enured workers accumulated DC pla EBRI of Selected 401(k) Issue Brief, no. 272 Accou (August nt nBalance ) assets . Available (e.g., possibly in a profit-sharing plan) Categories at www.ici.org/pdf/per10-02.pdf and changes in assets. For example, stocks (as measured by the S&P 500 total return index) increased 15.1 percent partici dramatic pants sh 30sift arse in th >in 10–20 pleir ans asset with allocations more t b h15% an in 2, 33.5% 500 2010. 14% part icipa16% nts, and t 13% hese 13.3% same 13%plans 17% account for 16% 70 53.2% percent 14% of all plan Figure 41, NeRatio of 401(k) 1,001–5,000 w 401(k) Participants Accou Ten 37.2% nt d Balance Not to Ho 12.7% to Salary ld High Co 6.0% ncentrat for Participants 5. i7.2% o 7ns in Com 2.8% in Their 60s, pany Stock 15.8% ....................... by Tenure 12.0% 36 2011.) 60s 40s >$30,000–$40,000 52.7% 32.8% 11.2% 26. 25% 4% 49.3% 19.25% 1% 13.9% 7.3% 23% 6.8% 8.8% 26% 11.8% 7. 26% 2% 7.2% 2.4% 2.2% 26% 19.2% 12.5% 28% 22.3% 28% tenure 20s t the acc hol (Fi d oin unt g g ure m bo alance 14 re ). than Os lder of r 90 wo percent ec crkers ently Average displ of t hired heir ay Asset Allocation of 401(k) Participants p p a articipa account similar nts bal patter ia n nn their 20s w cn es . Fo in t r exampl arget e e-date re e, invested i 61 funds percent to 3 n n ta of 0 rpercent g pa et-d rticipants ate of fu rends, in t cently heir cohire m 60s with p pare d d with and company stock, and GICs and/or by Participant Age and Tenure 13 Age CHE ECK Percent Change P Loans T erO O centa by UT ge Participant ended to of AccE E oin T unBRI’ t be B o a A tal lSmall, ag ne cReturn Indexes e and Inve 1996–2010 S S sTenure ted WE in Ta4. rg 8et-dB B ate SI Funds TE TE! partici Washin Employee pants gton, in Ben plaDC: nes fit offerin U.S. Joi Specialists. g loans, th nt Committee 20With 401(k) Plan Loans, 10. e h Annua ighest on lTa percenta 40 xation. 1(k) Benc ges Availabl h of m pa arking by e rticipants at Plan Size, www Surve .jct.g with y 20 o 2010 10 outs v/x- Edition 38- tandin 06. .p g New dlo f an York, NY: balances Deloitte were among • 23.4 million 401(k) pla Percentage of Account Balance Invested in Non-Target-date Balanced Funds n participants, in 2010 43 >20–30 11% 10% 11% 9% 8% 12% 3.9 11% 4. 9% 1 4.1 GICs are insur 40s >5,000 ance company Who Hav products that guarantee e Equi 37.6%ty 33.9% Exposure, 5.7% a spe by c 7.4% Part ific rate ici of ret p 13.5% 7.5% ant u A rn g on the inve e or T 1.8% enure, sted 18.6% capital over the life of the 3. 2010 8 52.6% 16.3% Distributio Distribution n of Participants’ Balanced Fund Allocations b of Plans, Participan Percentage of participants w ts, and Assets iby Plan S th account ize balances .................................................................. y in specified ranges, 2010 Age .. 6 closed-40% end funds, exchange-traded funds (ETFs), and unit investment trusts (UITs). ICI seeks to encourage adherence to high prior A llThe percenta and 50s to the intr >$40,000–$50,000 69.7% www.e 36. oduction gb e 2% ri. of 401(k) participants with 401(k) loans outs org/ 7.pdf 9% of 401(k) plan /brie 35. 24% f0% spdf/0 42.2% featu 80 25.4ib 25% 8% res. However, 1.pdf 12.2% Percentage, 9.2% 23%such DC plan 5. tanding 0% 9.3% 2010 25%8. acros a 3% rrangements g s all participants both with and 3. 26% 5% 8.9% 1.7% enerally did no 2.6% 25% 10.1% 19.3% 27% t permit employee 13.4% without 401(k) 27% durin assets. g 20 Becaus 10, while e most of bonds the (as plans measure have d a by sm the all Barc numlay ber s o Capital f participants, U.S. Aggre the gate asset size Bond Ifor ndemany x) inc rp elased ans is mod 6.5 per est. cent About 60 other stable value funds EBRI Issue Briefs is a monthly 857 periodical with 5,780,776 in-depth evaluation of em $456,059,107,209 ployee benefit issues 3 3 1 percent at . 2008a. year-end >30 “Employ 200 0 e9. e Benefits 7% in the Unit 8% ed Percentage, Stat 10% es, March 2010 8%2008.” 7% News relea 9% se, August 9% 7, 200 7%8. Available at two partici Figure or G pr12, fe ants oup wer Tenure Com i nyears of t their Zero 60s wit e pnur 1–1 osition h e 0% that co had accou of Selected 11–20 ncentr Percentage %nt 21– balanc ation. 401(k 30% of es In ) Acco participants 3 of addit 1–4 leunt 0% ss ion, than $ Bala 41 at y w –50% nce ith e 10, ar-end account Cat 000. 51– egories 60% 2010, In balances contr ........................................... 61 44 –70 ast, percent %only 71– 18 of t 80% perc he 8account ent 1–90% of those 91– balan 15 100 in ces % their of 50s All 37.7% 32.8% 6.6% 7.3% EBR 13.5% 7.5% I/ICI 2.0% 18.3% 53.6% 15.8% participants in their Age Group 30s, 40s, or 50s (Fi >0–50 percent gure 47). In addition, pa >50–90 percent rticipants with five or fewer >90 percent years of tenure or with Consulting 400% • 64,455 LLP. Availa employe ble at r-spo www. Pernso c aentage delo red of itte.com/assets/Dcom- 4 el0 igibl 1(e k) 401( plan k) part s, icipant holdi s ng with outstanding 401(k) loans Figure 60s 42,10 Asset Allocatio 0% 23% n Distribution 34.7% of Recently 10.7% Hired Particip 8.9% ant Account a 9.8% Balance to Company Stock 3.3% 27.9% in contract. 33 >$50,000–$60,000 24% 24% 22% 24% 25% 24% 25% 26% Asset Allocation and Participant Age 0% ethical standar $50,000 ds, A Of ccount promote public understand wh iS cih: zetarget-date funds an optiing, on and otherwise advance S&P 50 th0e interests of funds, their shareholders, directors, plan Utkus, contributions Relationshi loan acces Stephe and often were p n s o P., a was similar in earlier f EBRI nd /ICI Jean 40 designed A. You 1(k) and trends Data nyears. g. to 20 be base 10. For example, in 2009, this m supplemental , as Percentage Plans Resilie well as to the U nce crit to in of Participants W 636 ic other employer plans. Vo niverse al latile analys Mar of All es of easure kets: 401( iem thout 3,239,383 plo 40 was 19 k) y 1(k Equity ee b The Plans ) s P epercent; in 200 e participants’ nef articipant ................................. Funds it polici $259,567,917,586 eBse and pro hacco a 8, 16 percent; in vior unt balanc pos September als 6 . EBRI es that ( Indivi F ig For the age distribution of 401(k) plan particip urdual es 7 an 401 d (k) 8). participants’ asset allocation ants and to balance ass dets at year-end funds varies wi 2010, see Figu dely aroun 26d an re 5. average of 18 percent (Figure PLA 17 Nperc S WIent TH 60s C oO f M the PAN plans Y STO have CK assets of $25 32.1% greater 0,000 than $100,000 at or less, and another year-end 12.8% 30 p2010 ercent have plan assets 55.1% between $250,001 Our Source: Tabulations from EBRI/ICI P 401(k) Plan articipant-Directed A Rsset etirems ent Concentrated in PFigure lan Data Co6 llection Projec Equity t. Funds 23% 300% 8% 47.6% 2008 60s recently with ww 20s w.bls.gov hire morde partici than 51.0 / 20s news.rel % 20 pants years 1.ease/ i8% n their of t archives/e e nur 1.6 20s % e was ha32.3% d bs2 investe 1.6% account _0807 d 200 bal i1. n 47. 1% b a 8.p 3alanc nces df e of 1.1% d less fun 7.9% dtha s, 2 compare n .0% $10,000. d 1.1 wit % h 42 1.2% perce 59.8%nt i1. n 4% 2009, 3 36.1 6 pe %rcent in Plans With Company Stock . 2004b. 50 “Appendix: Additional Figures for the EBRI/ICI Participant- bDirected Retirement Plan Data Collection >$60,000–$70,000 53% 1998 <$10,000 1999 20 23% 00 Loan 20 39% as 01a 24% percentage 2039% 02 of 22% t20 he 03 r37% emai 44.8ning % 20 10% 04 401( 23% 35% k) account 2005 36% bal 24% 20 ance 06 39% 2007 23% 39% 2008 25% 20 35% 09 2025% 10 more UnitedStat than 3 a 0 years es/Local%2 of tenur 0Assets/Documents e were less likely to /us_consult use the lo in an g_20 provision than 10annual401kbenchmar other participants. kingsurvey_ Sixte1 e2 n 151 perce 0.pdf nt of 401(k) Pla • $1.414 trillion in a ns With Company s Stock, by sets. Participant Age ......................................................................... 36 Non-Target-dat Russel e l 2000 Index Combination of Figure 13, A Al ll401(k) Account lMinor investment options Balances I are not sNotes hown n; crea ther is a monthly 31.0% efor se e, rWit ow per h cParticipant A entages period 64,455 wical pr ill not add to 100 per oviding curr ge and 12.9% cTenur ent. 23,441, ent in Perce entages formation on a variety ........................................... 185 are dollar-w aeighted 1,414,179,196,794 av 56.1% er ages of emplo . yee ben 15 efit EBRI’s s website is s easy to us se and pac cked with u useful info ormation! 22% Look for As and 20sin ad previous 51. 20% visers. 10 8% 0% Members of IC 29. years, the dat 5% 6.1% I abase 401(k) manage total 41.8% for plan average 36. year 8% assets -end 2010 of $12.5 trilli asset 5.0% sho allocati ws 5. on on, that 0% and ser percentage of partici 9.1% ve pants’ more than 9 5.4% total asset 21%2. assets, al 9% 0location million shareholders (see Bogdan, 16% varied considerably 29.5% with 11.5% 2007, 20). pre-date 200 For 16 percent; and in 2 7– e the 401(k) plan are xDecem ample, $10, b47 er 000– 2 percen 0 $20, 09 006 000 . V not t , alle of 15 percent. included in this y partici Forge, PA: 32% pants held no T32% analysis, he Vanguard bal which 31% anced Group, focuses on fu29% nds, Va while ng401(k) u 30% ard 27 C perc balance amounts. enter 33% en t for of Retir partic 31% ement ipa nts 28% Rhel esearch d mor(Marc e than h). and The $1,Typical 250,000 401(k (Fi 30s gure ) Pl an 3). Parti 401(k) Participants Represent a cipant ...................................................................................................... 42.1% 21%Range of 9.0% Job Tenures 48.9% Form 5500 6 20s 31.9% 34.7% b 5.2% 7.6% 3.5% 12.4% 14 4 401(K) PAR >$70,000–$80,000 b T TICIPANTS CO 26% NTINUE23% D D TO SEEK 22% D DIVERSIF 22% ICA ATION 23% OF T THEIR I 22% NVES STMENT 24% 21% S. T T 24% he share 30 Sour s 350% ce: 90 T %abul 60.7 ations % from EBR 3.3% I/ICI Part2.6 icipant % -Direct2.3% ed Retirement 1. 6% Plan Data C 1.4% ollection Proj 1.ect 7% . 1.2% 1.5% c 1.6% 22.2% 2008, 28 percent in 2007, 24 percenta in 2006, 19 percent in 2005, and about 7 percent among that age group in 1998 34 Project f Ao tar r get- Year- Com date En fund typic pany d 20 sat03 lly ocrk .” ebalanc Investment es T arget its portfolio -DatCo to bec e funds mpany ome less I foc nstitut used on gr e Pers owth and m pective ore foc u10, sed on inc no. o2A me as (A it appr ugust). oaches Ava and ilable at partici Other stable v pants wi 48% th alue fun account ds include synt balances topics. EBRI of hetic GICs, less than F $10, which consist undamen 000 h tals balanc ad of Employee Ben loa of ed na portfolio s funds outst Barclaysandin Capiof talCom e Ug. fit Pr fixed-inc .S. A pany ggreg ogr ate B sams o toc ond me k I n offers a straightf dsecurities ex com “wrapped” pany orward, basic stockwith a and/or 33 Of 40 >$20, wh 000– ich: $ tar 30, get- 000 date funds 28% an option 28% 28% 25% 2009 20% 26% 29% 27% 25% 30s 56.0% 40.6% 6.6% 29.2% 23.7% 20% 5.5% 45,159 5.3% 11.5% 15,856,833 Age 5. G 2% roup 3.7% 906,411,019,813 24.6% 10.4% Definition of 401(k) Account Balance See end publications . note 2008b. 11 for additional detail on target-date funds. National 22.8% Compensation Survey: Empl selected oyee yB ears enefits in Private Industry in the United States, March 30s Note: The analysis incl 20% udes 401(k) plan part44.8% icipants with tw15.9% o or fewer 20% years of tenur 4.7% e in the year indi9.9% cated and in 4.6% a plan offe ring company stock as an 15.2% age. Holden, Younger and Schrass, 2011). partici 40s pants tended to favor 44.2% equity funds and balan9.4% ced funds, while older partici 46.4%pants were more likely Available >$80,000–$90,000 at https://institutio Percentage 23%nal.vanguard. of 23% active 401(k) com/iam/pdf/CRRRES.pdf 21% plan participants, 21% 23% by tenure, 21% 2010 23% 23% b 80 Deloitte perc these s ent Consu The o pas 39 f 2010 EBRI/ICI database covered 46 p p stheir l eting ecial s the tar ac and get counts f date of the fund, w eat Inveu u stment in res: balahnce Compa ich isd us fually unds ny incInstitute. luded at the in the fund’s percent of the universe of 401(k) plan partici en 2 d 011. of nam 2 e. 0 Inside 10 (Fith gure e Struct 31). ure At yo efar-en Defin d ed 20Contri 10, 53 pant bution perc s, ent more /401(k) of 401 Plan (k) In Figure a give 43, n a Per gecentage grou 33.p, 4 lo of 401(k nger tenur ) Plans e tends Offering Loans, by to mean that a Plan high er Size, perce 2010 ntage ................................................... of participants will have accoun 38 t balances About o of 401(k) acc Changes o ounts > in Account Balances $30,000– investe $40,000 d d in compan ............................................................................................. 23% 19%y y stock contin 24% 25% ued to shrin 22%k k, fallin 23% g by m m 26% ore than a p 25% e erce........... 23% ntage p 10 oint (to Figure 40 14, s 401(k) Account 66.1% and/3 o .r 8% Balances 2.6 explan Less % ation Than 2.3% of $10, emplo 000, 1.y 6% ee b by ePartic nef 1.4% it progr ipant ams Age 1.5%in anthe pr d Te 1.1nu ivat %re e and .............................. 1.3% public target sec 1.3% -dat tors. e The funds 17.1 16 ,EBRI %and/or (Figure 3 Age Group 90 9). % At year-end 2010, amon 18% >0–50 percent g rec as e only ntly hired par aticipants s only equit >50–90 percent in y their 20s, tar as only get-date funds >90 percent accounted for 79 per- 28 44 ww inw.ici.org vestment opt /p ion. df/per10-02_a 19%ppendix.pdf guarantee (typi 40s 40s 54.4% c 42. cally by an ins 5% 8.2% u24. rance company 8% 43.6% 20.1% or a bank) to pr 11.6% 4.7% ovide 6.5% 4.6% benefit payments 12.8% 6.11.1% 4% according to 4.0% 5.8% the plan at book val 22.6% 18.3% ue. 12.0% $40,000 In plan-year 2 Social Security replaces a mu >$90,000–$100,000 GICs 008 are 50s guar (latest data available), anteed 28.6 inves22% tch ment higher fracti contracts. 22% 44.1% only on 2.2 percent of the $2.2 of pre- 21% retirement 20% earnings 9.1% trillion Per for c22% in 401(k) plan asse entage lowerof -income 20% workers. 46.8% ts were 23% For example, th participant loans. 22%e 38 first- In As Relationship of EBRI/I a cross section, 2008. 25 Washin 0% 1.7%>$40, gton, or sna 000–$ DC: 50, ps 000 CI 401(k) Database Plans to the Universe of All 401(k) Plans h U.S. ot, a of t Deh partment e 22% entire population o21% f Labor, 28.7 Figure 13 Bur 22% of ea 40u 1( of k) 20% Labor plan pSta arti 21% tc istics. ipants, Available at 24% the datab 22% ase incl 20% udes 401(k) 80% 30 42% 27.2 to invest i 0% 300% n fixed-income securities such as bond funds, GICs and other stable 60 svalue funds, or mon 26. 21% 9 ey fu 21% nds (Figure 21). partici Fees: pants 20s A h Stu eld d41% y bala Assessing nced funds, the Mechanics up from 20.4% the of 50 the percen ‘All-Int ’ Fe of e partici . Washing pan 13.3% ts ton, holdi DC: ng Investment balanced 26.5 fu nds Comp 66.3% atan year-en y Instit d u20 te 09 an.d Ne At w greater than than d $10 percent of plans, and 47 100, balanc 000. ed Fofr unds example, Databook on E equit 16 ype inves rcent percent tm m ent o ployee Benefits f partici of 401(k) plan assets pinves antst m is in Y a ent ear th statis eir 60s tical r . equit The EBRI/ICI project is uni with eferen y five inves ce work on em ttm o ent 10 years o non-t ploy arget fee ben tenure -dat que efit program e ha balanc d acc ed os funt unds 50s 50s 68.7% 3.9% 2.5% 34.4% 2.2% (Median 10.1%T 1.enure: 5% 8 1.4% Years) 5.1% 1.4% 15.0% 1.0% 9.2% 1.2% 1.3% 60s 15.020.3% % Average Loan Balances 35 8 8 percent) in 40% 2 2010, continu uing a steady 0.5% decline that s started in 199 99. Recently h hired 401(k) participants Year-End 50s 53.2% 2010 Be37. caus Snapshot o 1% e few plans 9.8% fall into this f 401(k) 24.1% categor Partic y, 19. thes 7% ipants’ e percentages Account 4. m 4% ay be heav Balances ily 6.influenc 9% ............................................................ ed 16. by a few 5% outlier 8.6% s. 5.6% 10 19. 4% 12.4% 6 cent of their Invebalance stm >ent $50, Opti 000– d f ons u $n 60, d Of 000 assets, fered by Pl or 35 an 19% perce19% nt ofPer the centage i20% r account of plans 18% balances par 19% overall. ticipants 21% The inP crease er 21% centage in of asset 19% assets allocation to VanD>$100,000–$200,00 erhei, Jack L. 20 60s 02. 0 Company 22% Stock20% 41.4% in 401(k) Plans 19% : Results o 18% 8.9% f a Survey 19% of ISCEBS 18% Mem 49.7% bers. 19% Washington 19% , DC: Figure This represent • 44, EBR Percentage I I’s entir s a decline from 77 percent of plans in the 22.4of Eligible e library of rese 401(k) Plan Participa a arch publica ntt ts ions starts y With 401(k) Plan ear-end 2009 E a at th Be m RI/ICI Loans, ain 401(k) database (for W W byeb page. Plan Size, C C 2010 lick on year-end 2009 .......... EB38 R RI data, 29% Figure This upd 15, 30s a te 401(k) Account ex <100 Participants tends previous findings from 401(k) Account Balances Increase With Participant Age and Tenure Balances 21.3 Great 27.8% e r the projec Than $100, t for 000, 1996 through by Partici 13.9% p2009. ant Ag For year-e e and Tenur nd 2009 res e ........................ 58.3% ults, see Holden, >5,00016 The partici addition, year ww 20 replaceme p10 ants w.bls.gov only $663 million flowed out of 401(k) plans as th EBR who In /ICI 37% t / rate (scheduled Social Security benefits as are youn ncs/ebs 401(k)/g be dand anef 21. tabas 0 its/20 those e is0 wh a r 8 100–500 /own o epres are ership/private entativ new to t e h s e a eir a re mple /t 501–1,000 percentage o sult jo able bs, of t of converting a loan i 02a. as he well as o pdf esftimated average c lder 1,001–5,000 u pa niv are n rticipants ers to er a withdrawal/distribution e earnings) fo of 40 and 1(k)those r pla retired worke nswho . At year have -en r s been in d 80% and work force-related issues. For example, 60s . 20 among 04c. “Contri partici bp uants tion B in e havior th 27.7% eir 20s, of 4th 01 e 8.9% (k) avera Plan g e Partici allocation 4.6% pants tD o u equity an ring 19.4% Bull d an balance d 15.2% Bear d Mark fund ets.” s was National 74 perce T 19.2% a nxt of 15 Note: “> F$ unds 60,”000– include $70, m000 utual funds, bank c 16% ollective trus 17% ts, life insuranc 18% e separ 18.3 ate ac 16% counts, and any pooled inv 18.417% 19% estment produc 19% t primarily inv 17% ested Ayear-en ge 60sGroup Yo 47. rd k2% becau , 2010, NY: 31. De se bala 0% loi it includ tte nced 11. Con 1% fun su es d 21. lt d ing use by a 4% ta LLP pr . ovided parti 17. Ava 4% cipants ilab by a le at3. occ wide w 9% w uw rrvari .ed ici . 14. torg ety hrough 3% /p of plan recordkeepe df23. /rp tar 0% t_ g11_ et-date 6. d4% c_4 fu 01 nds 6. k_ 7% rs fe and non e_ and, stud therefo y.pd -targ f. et-dat r e, e balanc 19.3% ed 13.1% balanc 60 es s in excess 71.6 20 of $ % 103 0 .,0 4% 00 in 2.0 2010 % (Fig1.9% ure 15). How 1.3%ever, 1.2% 44 perce1 nt .2% of 50 partic s 0.9ipa % nts in t 1.2% heir 60 1. s 2% with bet 14.1 we %en 20 c contributed >$200,000 to o this trend: T They tended 18% 15% t to be less lik 13% e ely to hold e 13% 19% m mployer 13% stock. 12% 13% >20 Years 12% Some recordkeepers supplyi Equity, bond, m All oney, and/or ng data were u balanced funds 39.5% nable to provide comp 63.0% lete 8.7% asset allocati 19% 34.9% on detail on 51.7% certain pooled asset classes 28.7% balanced 40s funds occurred in Plans the targ c et-date 28.8% fund category Parti: cipa target nts -date 13.9% fund assets accountA es ds e fo tsr 57.4% 31 perc 50s ent of the Among Factors Employee partici That A pBen ants ffect efit with Research 401(k) outstanding Participants’ Institute. 401(Avail k) Ac 199 loans count 9 able at th Ba at 200 lances ww e 2e w.e nd.................................................................... b of 20 200 ri.org 7 10 /p 15. , th df 8200 /isc e ave 8ebs.pd rag 200 e f un 9 paid201 bal0ance was $6,810 46 , see Holden, VanDerhei, and A 70% lonso, 2010). The decline represents a change in sample of plans and 15.1 providers due to the Issu in the s 18% e e Briefs > e$ c70, urity 18% 000– indic and $ ated. 80,000 E EBRI Notes 18% 16% 18% for our in-d 15% >30 Years e e 16% pt 18% h and no 15% n npartisan pe 16%18% r r 18% 18% iodicals. 18% 17% 16% VanDer Plans With Company Stock and GICs, hei, and 250% Alonso (2010). Results and/or Other Stable-Value Funds for earlier years are available in earlier issues of Investment Company Institute the 1940–1949 (“deemed distribution of participant loan birth cohort (individuals age Average 401(k) account balance, by age and tenure, 2010 s”).d 61 to 70 in 2 See U.S. Department o 010) decreased f Labor,as income increased. The me Employee Benefits Security A dian dministratio replaceme n nt rate with 201 20s0, their all 401 curr (k) ent plans h employers 85.e 1% ld a for ma total ony f a$3.0 11. yea 6 49. r trillion s6% . Thes ine asse annual ts, and t u11. pdat 3% he e s da oftabase the data rebas pres 4.8% eents provide abo u st naps 47 perce hots of n 19. t 401 of 3% tha (k)t All Assoc 54.2% iatio 38. n 5% Procee 7.d 2% ings, N 27.i4% nety-Si22. xth 6% Annual Conf 4.8%erence 6. 3% on Ta 13. xa6% tion, 6. Novem 1% b 4.er 4% 13–15, 2003, Chicago, 24. IL: 1%44–5 11.3. 7% assets, compared with 50 percent of assets among participants in their 60s. Among participants in their 20s, the funds: Figure 45, 36 perc 50s 401ent (Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. k) Loan B of 401(k) partici alances as p ants a Perce h 28.7% eld ntage target of 10.-dat 3401( e k) funds, 10.9Accou 20 nt percent h Ba 13.7% lances efor ld no Parti n-target cipants -date With 57.6% balanced 401(k) fun d s, and and 30 Allyears portrays of Of 64.4 ten the a w% u hire c9. h: 7c wit tar tivity 3get- .h 4% their date of participa f unds curr 2.4% ent an opti nts employer 2.1% onin 401(k) ha 1.d 5% pla accou ns of n 1.3% t varying ba 0–2 lance Years 1.s 5% sig ze reate s—from 1.0 r than % very l $11.3% 00arge ,000. co T1. h rpo 4% e pre at rce ions 19.7 ntage % Figure Salary Range 16, Median >$80, Account 000–$90, 000 8. Balance 7 Amon 14% g Lon 14% g-Tenur 17% ed 15% 42.2% Particip 14% ants, by Age a 14% 24.2%nd 16% Salary, 2 16% 01019.4% .................. 15% 18 for one or mor $30, . 20 000 e 09. of their clients. The final EB National Compensation RI/ICI Survey: 8.4 401(k) data Employee base Bene includ fits ies n Privat only plans f e Induostry r which at least 90 percent of all p in the United States, March lan 20s 7020 %0% 33.4% 18.3% 13.1% 40 4.8% s 1.5% 8.3% 16.4% account balance 10assets of recently hired participants in their 20s at year-end 20 7.09 0 (non-target-date balanced funds compare Employee 16 d Ben wit Plan he a fit $7 s,34 Research 6 in th e Inyear stitute. -end 2 0 20 05 09 . “His data tory base of (Figure 48 401(k) Plans ). Th : An e me Updat diane.” loan FAC bala TS nce from outstandin EBRI 6.5 . W 6.ag 6sh was $3 ington,619 , DC :at cross-sect 30s Definition ional of nature 401(kof the data collecti ) 79. Acco 4% unt Balance o.......................................................................................... n, 45. ra 4% ther than the F removal igur 9.e 6% 42 of target-date funds f 8.1% rom ongoing plans. For an an ........ 16.3% 10 alysis 16% Contact EBRI d Publications, (202) 659-0670; 4.9 5.fax publication 5 5.2 orders to 5.16% 9 (202) 775-6312. Perspective 60s (www.i A target-date fund typically rebalances its portfolio to become less focused on growth and more focused on income as it ci.org/rese 16%arch/perspective 24% 29.4% ) 16% and EBRI 16% Issue Brief ( 4.www.ebri.org 6 13.3% /publications/ib). 43% 57.3% total. account (2010c). for the lowest Th S balan oe urce dat : household ces, Ta a > bbas $ ul90, aasset allo tion e 000– s als fro $lifetime earnin m o 100, E covers Bcation, 000 RI/ICI P 46 artian c ipercent p13% a gs d nt-D loan qiru eintile cte activity of t d 13% Rewas 71 percent; for the middl h tire e munivers eacr nt P13% o la 4.ss n 1 De a Tenure (years) wide ta of C 4. 3 oactive l l13% ecross-sections of ction P40 roje1(k c13% t. 4.3)e plan quintile, the median parti participants. Ho 15% cipants 15%and Social wever, m14% ore Security than the cro 10 ss- per- PL average AN S Washin W $40,000 or less IT alloca H . COM gton, 20tion 10. PADC: N “T to Y S he equ National TOCK A Im ity pafunds ct 18% ND GI Tof A ax >20–30 was Cs Association utomati A 37 ND/ 17% Years percent c OR OT Enrollme . HE of assets, compared with R S 13% nt TiA n B4 L0 E1 -V (k) A 19% L UE Plans FUNDS on Futur 20% 34 perc e Re ent tirement 19% of assets a Accu 24% m mulations ong partici : 22% A pants in Plan Loans, Equity, bond, m by Plan Size, oney, and/or 2010 balanc ................................................................................................ ed funds 2.5 , 2.4 >10–20 Years .......... 39 2 percent 30s to hsmall bu eld both.sin esses—with a variety of investment opti 43.3% 10.5% 8.8% ons. 40 6.1% 1.6% 9.0% 15.5% increases P PARTICIPA to 60 49 percent %N NTS’ 401(K for )partici LOAN pants BAL in A A th NCES D eir 60s wit ECL L hIN more t ED SLI han G 30 H HTLY IN 20 years of ten1 1 u0. re. In 2010, 21 percent off all 2009. Washington, 15% DC: U.S. Department of Labor, Bureau of Labor Statistics. Available at assets 40s could be identified. Percentage 74.8% of plans 39.3% 5% 8.8% 10.8% 15% 15.9% were • Ag 10 e 200% Not Visit percent Ae: ll PercEBRI’s blo approaches and passes the target date of the fund, which is usually included in the fund’s name. en >$at year-end 2009 t100, ages000– may $ n200, ot add t g g000 . P o e100 rcSubscriptions to enta an perd 10% cge en 9 percent t 25.9% o bec f A auc sc e 9% o of u n rEBRI at year ou t B ndi ang l Issue Bri a.n 10% c-en e Ind v e 2010). s efs te9% dare included in 13.6% N oThe n-T 10% apattern rge as part of t-date 11% of t BalEBRI anc arget-date ed membership, or as part of 11% Funds 60.5% and 10% non-target-date a year-end 2010, compare 17 d with $3,972 in the year-end Fi2 gu 009 re data 26 base. With acco 30s unt balances generally higher on tracking target-date fund us Employee Bene bA fit sset A Research e llocation Distributi and the persist Institute (Febr ence of uary). on of Recently their u Avai se labl from 2007 t e at Hired P www.ebri hrough a.org/pdf/publ rticipant A 2009, see ccount Balance Copeland (2011). ications/facts/0205fact.a.pdf Figure 17, Ratio of 401(k) Account Balance to Salary, by Participant Age and Tenure .................................. 18 Size >$40,000–$60,000 of 401(k) 0 Account Balances 20% ............................................................................................... 23% 21% 26% 28% 27% 30% .......... 1026% replacement 20s 40s 56.60 2% % ra 28. te 7% was 43 percent; and for th 8.2% 41.1% 14%43.8% 28.2% 14% e highest quinti 14% 7.1% 12.9% le it was 30 percent. See Cong 2.3% 7.4%5.0% 2.5% 6.7% 1.8% ressional 1.8%6.7%Budget Office (2011). 12.0% 5.1% 22.0% 16.1%14.6% ce sectional nt Orders/ of all a 40 n and GIC al1( ysis k) b Age Group s p is not w l an and/or s. other e Th ll 14% e suited to sdistri t0–2 able vbution alue addr funds of assets, particip essing >2–5 the que >5–10 stion ants, of tan he d >10–20 im pla pact ns in t of h partici e >20–30 data pbase ation fo in r 40 2010 >30 1(k) is plans over similar to 14% tth ime. e Simulation Study Based on Plan Design Modifications 34.7% of Large Plan Spo 26.1% nsors.” EBRI Issue Brie 23.9% f, no. 341 (April). their 60s. Younger >$200, parti 000cipants also ha 5% d higher5% allocation 5% s to balanced 4% fun 5% ds, particu 5%larly to tar 5% get-date 5% funds. A target- 50s The analysis includes the 2.0 million recently hired participants (those with two or fewer years of tenure) holding balanced f 70.3% 33.4% 8.2% 15% 13.2% unds in 15.4% 7 4 401(k) 100% particip pants who we ere eli -0.g 8 ible for loans had lo oans outstand ding against ttheir 401(k) a accounts, unchanged 45 $199 annual subscription to EBRI Notes and EBRI Issue -1.6 Brie 40s fs. Change of Address: EBRI, ww Group w.bls.gov Z/ encs/ebs ro 1–1 /be 0% nefits/20 11–200 -3. % 9 0 /own 21–30% ership/private 31–40% /t41 able –50% 02a.pdf 51– 60% 61–70% 71–80% 81–90% 50s 91–100% . 2005. “The In -2. fl 5uence of Automatic 10% Enrollment, Catch-U 13% 13% p$19,926 , and 13% IRA Contributions on 401(k) Accumulations at balanc The EBRI/ICI 401(k) databas 50s >$60,000–$80,000 ed fund use vari to Co ed wi mp th A e 18% an sset part environment y St icipa A o a36.2% ck in lln o t 23% cat ag is 401( e icertified to b o an n 5.7% d k) D lin Plan i 20% st eup ris W b of eu fully compliant with the ISO plan tiito h7.0% n 24% Co invest ofmp 401 m an ent (y k 24% St ) A o 8.1% p oc tions. ck, b coun y - 2.1% 27002 Information Security Audit Part 24% t icip an 19.2% 26% t A g e 23% 16.5% average Figure This pattern is 46, in Few 401(k) Participants Ha 2010 driven in part compared with by 20 restrictions 09,d the Ou ratio o tstanding placed on loan amounts. f the 401(k loan ) outstan Loans; Lo din 18 ans g to t Te $19,398 hnded e remai to ning Be Small, account 1996–2010 balance e ... d39 ged down 30s 56.3% 34. Sa1% lary Range 8.9% 35.7% 25.8% 9.9% 2.6% 6.3% 2010 3.3% $18,986 1.6% 5.9% 6.9% 20.6% 11.3% 20s $18,942 16 Of 2010, the 1.5 million recently hired participants holding target-date funds in 2010; and the 0.5 million recently hired partici which: target-date funds an option 26.2% 19.1% 16.6% pants universe Cross Target 60s Relationship sections chan -date of50 pl fu %ans nd ofas re use Age a ge63. vari porte in n 19% 7% co d es Tenure to mposition dwith partic by the D Account Balanc ove eip pa a 27. r n rtment time t 0% age a beca of n d Labor (Figure use te es nure. .......................................................................... the select 9. Youn 0% 4 ger ion ). partic of data ipants provi 14. 6% were ders an more d sam likely ple to of hold plans 13.1% tar 12 us ging et-date a Relationship Betw 150% 20s een Account Ba $4,250 $10,793 lances and Salary $16,132$17,909 12% 12% Fidelity date, Available orI li n$20, fecy vestments. 000 cle, at -10www.ebri.org/pdf/bri fund 20 pursues a 08. “Impact long-ter 1100 13th St. NW, Suite 878, Washington, of efspdf/EBRI_ Ma m rket investmen Volat IB ility _0 t 4- strategy, on 18% 20 Partic 10_No3 ipant usin 41 g _ Exchange Beh a Au mix to-Enrll.p DC, 20005-4051, (202) 659-0670; fax number, of asset dfavior.” classes that follow a Building$17,794 Futures: $17,686 Impact of 36 For 401(k) asset figures, see Investment Company Institute (2011). Figure 60s 18, 150% Ratio $40, of 000 401(k or les ) sAccount Balanc 29.8% 17% e to S 19% al 5.0% ary for 18% Participants in Their 6.7% 18% 17% 8.3% 20s, by 21%Tenure 2.3% 19% ...................... 29.4% -8.717% 19 14.1% ffrom •>$80,000–$100,000 20 yea sEBR r-end d I I ’s relia 80.2 2009, and % ble 3.2% u u h hp ealth an 17% from 18 p 2.1 -9.1% d re 21% e e etirement su rcent 1.6%at yea 17% 0.8% r r r r-end veys are ju 2008. L 1.0% 22% s so o t a c an 0.8% s lick a out 21% stan 0.5 wa d a d % y through ing20% amount 0.4% t te e he topic bo d 23% 0. to 14 perc 4% 9.0% x x 20% ees at nt of the 29 Age Group 50% >0–50 percent >50–90 percent >90 percent Target-date funds often are 16% used as the de Pefa rcentage of recently ult investment 17% Figure in hired participants in plans auto 3 matic enrollment plans and in plans’ investment lineups 40s Retireme Subscriptions 53.8% nt.” 36. holding non-target-date balanced funds in 2010. 2% Investment 11.0% 29. Co B2% a mpany lanc20. eIs n 6% stitut to Ee qPers u8. it7% ypective Fund 2. 11, s 8% , b no. y P 7.2, 0% a r an tic d 5. ip EBRI 0% ant16% Issue Ag 2.0% e Brief 7.8% , no. 28 10. 3 1% (July). 17. Avai 3%labl 11. e 5% at standard. in 2010 (Fi More gures over, 46 EBRI has obtained a and 49). In addition, legal as in opinion that the methodolo previous years, there is gy variation used meets aroun the privacy sta d this 19 average ndards of the that corresponds Gramm- A lThe ratio of 4 l 01(k) account balance (a 74.8% t the -11. 39. 9 3% current employer) to salary alone 9. 33% 4% is not an indicator of preparedness for 10. >5–10 3% Y 15% ears 15. 60s 9% Equity, bond, money, and/or balanc $15,246 ed funds, 34 . 2010a. >$40,“Employ 000–$60,000 ee Benef (202) 775-6312 its 17% in the 15% Unit 16%; e-mail: 15% ed Stat 16% es, subs March criptions@ebr 16%2010.” 15% News i.org relea 19% Membe se, rsh July 17% ip Information: 27, 2010. 15% Availabl Inquiries e at given funds Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. provi than d older pa er vary from c rticipants. year At year to year-en and d 2010, because 49 401(k percen ) partici t of participants in t pants join or leave heir 2pl 0s ans. held tar In a get dditio -date n, fthe data unds, base Figu Relationshi re >$100,000 47, 20s 401( p k) Be 30s Loan twee n Acti Acco vity 14% $10,369 un Vt aried Balances Acro 16% 14.8% $21,812 ss and 401(k) Plan Salary 13% .............................................................................. $37,915 Partici16% pants $55,087 10.0% ........................................................ 14% a,b 14% 75.2% 16% 12 40 14% predetermi Market ned Volatili reallocat ty (December). ion, typically Boston, MA: Fidelity rebalancing to shifIt nivestments. ts focus from Availa growth ble at to income over time. At year-end 2010, Participa 80% nts’ account Row percentages may not add to 100 percent because of rounding. balances vary not only $13,493 with age and tenure, but 12% also 12% with salary. Figure 16 reports the account Comparin r r 50s emainin 30 49. s3% g g ac re32. c c ce ount -20 79.7 ntly 6% % h bal 13. ired a 8% nc 4par .5% e e,25. ton aver icipants 1%3.3% ain 17. ge 20 5% ,, at 10 2.5% yea with r7. -end similar 6% 1.2% 2010, age 3.3% 1.0% comp groups 8. a a a, 0% red with 15 b in 0. 8% 1998 also illu 5.3% 0.5p p 2. % ercent 0% strates 0.4% 11. at y 8% that as ea ar-end 0. 17. 3% set 1%2009. allocation 14. 5.7% 5% Loan to 11. 8% a the to op of the pag ge.$13,038 offering company stock as an investment option, 2010 -17.0 (see Plan Sponsor >$60, Council of 000–$80,000 America, 11% 2011). 15% At year-end 2 13% $12,81014% $12,578 010, 72 percen 13% t of target-date mutual fu 12% 17% 13% 14% $12,655 nd assets were held in DC 13% VanD werhei, ww.ici.org/ Jack, pd and Crai f/per11- g 02 Copelan 401(k) Plan Char .pdf and d. 20 www. 08. “The ebri.org Impac acter /pdftistics, by /bri of efspd PPA ofn /ebri Plan A Retirement _ib_07 ssets, 2010 -2 00 Savin 54.p gs dffor 401(k) Participants.” EBRI Leach-Bliley Minor investment options are not shown; therefore, row percentages will not add to 100 percent. Percentages are dollar-weighted 40 Ac %t. At no time has any nonpub Pe lirc cpersonal information that is personally entage of participants, 2010 identifiable, such as a Social Security averages. TFigure with 17 The T retirement. enure age (years 19, ypical (lower the older t and c Rat )A complete analysis of preparedness for retirement i 401(k) Plan Participant o om of pany 401(k stoc $11,873 )k A he ccount part icipa regarding Balanc nt),e EBRI tenur to S 2008 al e membership an ary (lower for Participants in Their 1 th .0% e would hid/or con gher 11% require estimating projected balances at retirement by thte ributio ten14.3% ure ns 60s, to EBRI-ER of tby he Tenure participa F should be dir ...................... nt), 15.2% account ected bal to 19 an EBRI ce 30s $11,600 21.2% -20.5 11.3% 11% 11% 67.5% Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. 40% 11% EBRI/ICI 401(k) Database www.bls.gov/news.release/pdf/ebs2.pdf 10% compared contains Estimates of the number 100% only wit h th Note: “Funds” include mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investment product 28 e acco percent unt of 4 bal of ances participants i 01(k) h plans eld in an ntd active participants are ba h their 60s (Fi e 401(k) pla gn ure s at 31 partici ). Rec p se e antly d on a co nts’ h curr ired ent mbination par employers. ticipants of data fr wer Ree ti rement om more U.S. Department like savi ly ngs to hold held b >$80,000–$100,000 27% 14% 12% 12% 11% 11% 14% 12% 11% 11 60sperc http://i 38. ent 0%mg.en of 27. 401(k) 0% 2 40s 5.com/Web/Fi 14. assets 3% in 18. $16,337 the d 5% e 10% lityRetirement databa 9% 12.7% s$30,158 e was -22. 9%S 1ervices/MV%2 investe 5.8% $52,148 d in2. tar 0part%20beha 6% get-dat 7. $87,914 1% e funds. v 4.ior%2 9%Amo $132,209 0Final% 1.n 7% g partici 2012 27.8% -p11 ants -0830. _6 in .4% p thdeir f 20s, 10.7% 27 per- 12.2% Year-End 2010 Snapshot of 401(k) Asset a Allocation Percentage ............................................................................. of Account Balance Invested in Company Stock 40s .... 17 balanc A target-date fund typically rebalances its portfolio to become less focused on growth and more focused on income as it approac 40 es s of longer 79.5 -ten % ured 4.7% particip 3.6 ants % at their 2.9% current 1.5% employ 1.1% ers’8% 401(k 0.> 9% ) 2–5 plans Year .0.5 sRe % hes and passes the target date of the fund, tireme 0.4% nt saving 0. s 3% held at 4.5% previous company a amounts stoc outsk t tandin and eg q uity decli funds n ned sli teg nd htly ed45 ftr room be those in lower in 201 t the 0 past few than in 1ye 998, ars. wh ile asset allocation to fixed-income 0–2 40s 82.8% President Dallas 22.7% 55.0% Salisbury at th 11. e a 9% bove address, ( 10.7% 202) 659-0670; 3.3% e-mail: 66.6% salisbury@ebri.org 12.6% plans (see Inve Of stment whicCompany Institute, 20 h: target-date funds an opti F7% 11). or onm Plan Spon 5500 so 0.7% r Council of America 10.5% (2011) reported an in 9.7%crease 7% in the Figu Note: The tenure variable is generally years working at current employer, and thus may overstate years of participation in the re Issue 48, 10 Brie 40 0% 1( f, -30 k) no Loan . 318 Bal (Jun ance e).s Available .............................................................................................................. at www.ebri.org/pdf/briefspdf/ebri_ib_06-2008401(k) plan. 7.pdf 41 Number, (lower The data the higher the acco been base Atransferred inclu ge primarily invested in the security indicated. >$100, des 000401(k to or shared with EBRI. unt ) partici balance), p14% ants P 8% er and salary cacross entage 10% of a wi A c (lower the high c de ou 10% nt ran Bal ge anc of e 9% Iag nver es e ta ed tnd he in 9% t partici E enur quity e F p unds gro ant’s 11%ups salary). Over . At ye 10% ar-end all, 9% 20 loans 10, 52 from percent also considering retirement income from Social Security, defined benefit plans, IRAs, and other DC plans, 6% possibly from $10,000 Total Plan AssAge ets Group Zero 1–10% Total P 11–20% lans 21–30% Total P31–40% articipants 41–50% 51–60% Total Asse 61–70% ts 71–80% A 81–90% verage A 91–100% ccount B 5% alance of Awhich is usually included in the fund’s name. llLabor, Bureau of Labor St 54.1% 32.8% 10.1% atistics 29.3%and U.S. Department of 20.6% 8.7% Labor, 2. 5% 4%Employee Benefits Sec 6.8% 2.4% 1.8% urity 10. Administration reports; and 1% 13.3% 18.6% 11.9% Holden, target-date in plans at Sarah pr fu ends , vious Jack Va tha employ n nDer those e hei, rs with mor or rolle and Luis d e ov yAlonso. eer ars into on t 2009. in he dividual jo b: “401(k atret year- ) ireme Plan en nt d A sset 20 accounts 10, Allocation 48 p(IR ercA ent , s) Account are of participants with two not Bala include nces, d ian n th d e Loa or n • Nee 50s d d a number? Check out t22.4% h he EBRI Dat tabook on E E10.1% m mployee Ben nefits. 67.5% 4% Figure .cent >2–5of th 50 20, s eir Average Asset 30% 401(k 79.4)% assets 79.5% 4Allocati .8% were ion n3.6 vested of 401(k) Participant % 41. in 3.0% 9% target-date f 1.7%s unds, .................................................................... 11. 1.2% whil 0% e am 1ong .0% partici 0.5 4.2% p % ants in t 0.4% heir 4% 600. s, 3% 9 4% perc 22. ..... 3% ent 4.0% 20 of their employers 60% or amounts Source: 50s Tabulrolled over at>10–20 ions from $22,024 EBR Years I/to IRAs ICI Particip an are $36,030 t-Dire not cted i Rn eclu tiremd e $56,899 ed nt Plan in Dtah tae Ca oln lect al $98,289 ioysis. n Project To capt . $179,587 ure as long $194,399 a savings history as securities Changes 30 . te % 20 nded in 10b. Asset Allocation to National increase Compensation (Figure Betwe39 en). Year Recently Survey: -End 20 hir Empl 09 ed an oyee 40 d 1(k YeB )ar-En epartici nefits d 20 pin ants 30s 10 Privat ............................................... tende e In ddustry to be less lik in the U ely nited to hol States, d 17 com March pany c Equity, bond, money, and/or balanced funds, -33.8 incidence of au Grtomatic oup Zenrollment in 2010. ero 1–10% 11–20% Of more than 8 21–30% 31–40% 00 plans sur 41–50% 51–6 veyed, 41.8 0% 61–70% percent 71–80% had a 81–9 utomatic 0% 91–100 enrollment in 2010, % 20s 69.7% 5.0% 4.1% 3.6% 3.0% 5.8% 24% 2.2% 0.7% 0.5% 0.5% 4.7% Sources and T GICs are guaranteed investment contracts. $0–$250, 50% . 20 000 09. y “Partic pe of Data ipants Continue 10, to 711 Stay the Cou 88, rse 588Amidst Market $1,Dow 118,849, nturn; 491 Improvement$12, s Seen 630 in Worker Sou of previous 401(k) rce: Tabu participants plans t lati 20, employment. For references to such research, se ons from EBRI/ICI Parti 21 ewer nded e ito n th be s eir cipan m 30s t-Di all, rected Reti or with the vast 40s, remen while t Plan 12 majority of Data Col percen lecti et MacDonald a on of 4 Proj 0 partici 1 ect. (k) part pan nits d Moore (2011); and Holden and VanDer cipants were in in the all a ir g20s e grou and 1 ps hav 0 percent ing no wer loan hei e in(2005). their 60s 22.3% 9.2% >2–5 Years 68.5% N-40 ote: The tenure variable is generally years working at current employer, and thus may overstate years of -37. p 0articipation in the 401(k) plan. >5–10 73.0% b 31. 23% 5% 8.7% 13.9% 32% 18.9% VanD consistent analysis. fewer Figure Editorial Bo Activity erhei, years 49, plans in the EBRI/ICI database. 401(k) Loan Amo Ja in of tenur Furt ck, ard: 2008.” and Lori L hermore, Dallas L e Ihnevestmen .l Salisbur d tacco u arget-date unts cas. y unt t , publisher V 20 Company aried 10. balanc fun “T Ac ;See discussion in endnote 2. Stephen Blakely he d es ross s, Ins Im acompar rte 401(k) Pa pact itute net o of P ed fe , editor Auto-Enrollme rspect un with rticipants pa . Any id 34 ive loa views percent of participa 15 n ............................................................ , balanc n n expr o t . an 2 es,sed in this p es. d an Autom d Beca EBRI use atic ublicat nts Issue Brief of Contri with ion and th all t more buti hese ,ose o on no. than fact Escalation f th 32 ors, e author five 4 (October it is not to 41 s sho 10 years on u l). d 8 401(k) 60assets s were 80.7 % investe 4.2% d in targ 3.0 et-date % funds. 2.7% 1.6% 1.2% 1.0% 0.5% 0.4% 0.3% 4.3% a T TNote: "Funds" include mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investment product HE YEAR-E and c 20s ND 2010 A ompany 30s 63. s0% tock, 66. V V and GIC ERAGE AC 2. 4% 5% s6. and/or 8% 2.0%C COUNT BAL 5.5% 2.7% 4.5% 2.7% A ANCE I 3.6% 3.1% N T 4.5% H 4. E E DATAB 0%2.1%3.7% A 0.S 8% primarily invested in the security indicated. E E WAS 3.9% 0.6%3.4 3.5% 0. P P 5% ERCE 8.8% 4.N 8% T HI IGHER possible, only longer 60s-tenured $26,649 participants are $37,560 included i$53,108 n this analysis. $89,956 However, 0 $159,654 it –2 isY important ears $202,329 to note that the tenure stock Acco 201 (Fi unt balan 0 g. ur Washin e 40) ces are net o an gton, d teDC: ndefd U.S. unpaid lo not De to ho partment an bal ld a a hi nces. gh of co Labor, Thus, ncen Bur trat unpaid ea ion u of loan bala of the Labor ir account nces Statistics. are not included in any o balan Available at ce in compa ny stock (Figure f the eight asse s 41 t The an Asset alysi >$250, s is based on Allocatio A000–$625, ll sampl n 000 and Participant Age es of 1.2 million participants.......................................................................................... 9, w19.7% 472 ith two or fewer year158, s of t833 enure in 1998 an 10.5% d 3.2 m $4,illio 018, n p 246, artic974 ipants with two or fe69.8% wer ye $25, a......... rs o 299 f tenu 17 re in 2010. compared with 38.4 percent of plans in 2009, 39.6 percent of plans in 2008, 35.6 percent of plans in 2007, about 17 percent Figure Engagement, 21, Average Asset Account Allocation of 40 Diversification 1(k) and Company Accounts, St by oc Partic k Usage.” News rel ipant Age ................................................ ease, January 28, 2009. 21 60s outstandin >10–20 (Fi not be gur ascribed to the officers, e g 5, at upper pane all (Figure 68.7% 50 l). ). The trust median ees, memb 24. aers, or g4% e of other sponsors of the E the participan 8.ts 1% in th mploye e 201 e Benefit Research 0 datab 21.a 2% se is 45 Institute, the EBRI Educ years, the same 15.1% as in ation and 20 09. Several recor 20% 20% dkeeping organizations provided records on active participants in 401(k) plans at year-end 2010. These • Instan ntly get e-mail noti?cations of the la atest EBRI d data, surveys s, publication ns, and meet tings 30sSource: Tabulations 40s 46.6% 65.3. 6% from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. 0% 7.0% 2.9% 5.7% 3.8% 4.8% 4.0% 3.7% 4.9% 3.6%5.9%2.1%5.7%0.9% 6.1% 0.7% 5.1% 0.5% 11.95. % 4% b correct of ten Available Retirement ure, to 41 pres and 19 percent at ume Income Adequacy.” www.ici.or that the of partic g/ change pdf/per ipants iEBRI 1 n5 th -0 e 2 wi Issue .p average th dfmor and Brie e or m ww f, th no. aw.e n e dian 3 3b 0 4ri. 9 years o account (November). rg/ pdf of t /e bbalanc nure riefspdf Available (e Fi/EBRI g for ure th 32). _ e at IB data _ 10- ba 20 se 09 as _No a who 335_K le r -Up eflec date. ts the pdf All 50 other % -50 79.8 stabl% e value 4 funds .4% 3.3% b 2.6% 1.4%1.3% 1.1% 030s .9% 24.7% 0.5% c 0.4% 32.2% 0.3% 5.2% >$625, Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. 000–$1,250,000 9,792 Fi 268, gu169 re 50 $8,920,545,024 $33,265 Mivariable T T nHAN T or investmen 40% is th Ht opti E e Y Y on EAR BEF time t s are not sh hat own iO ndi ; th R Rviduals E, BUT MA erefore, row percen have Y Y been tages w NOT at ill n A th oCCU t add to 100 percen eir cR R uATELY R rrent jobs a t. Percen EF F nLECT TH d tages are dol may not lar-wei E reflect the length o E EX ghPERI ted averages. ENCE E OF f time they TYPICA A L have and ww 42). w.bls.gov 0% /ncs/ebs/benefits/2010/ownership/private/table02a.pdf 18 categories described. >20–30 ResearEquity ch Fund, Fund or their s 61. staffs. 7% C Nothin ompany g her Stock ein is to be co 18.7% Balanced nstrued as an attem Funds 8. 25% p 6% t to aid or Bond Funds hinder the adoption GICs and 20.7% of a Ot nyher pending le Mone gislat y 13. ion, Funds 7% regulation, of For Figure plans in 200 an analysis 50, Loa5, $0 n of the possible impact of s and 10.5 per From 401(kc )ent Plans of plans in Tended automatic 2004. Eighty-t to be increases in participants’ contribu Small.......................................................................... wo percent of plans with automatic enrollme tion rates in automatic enrollment pl nt in 2010 ap .. 41 plied ans, Asset a Allocatio Note: At n and Inv 1997year-end 2010, the average account balance among all 23.4 million 401(k) particiants was $60,329; the median account 199e 8 stment 1999 O 200 ptions 0 200 ............................................................................................. 1 2002 2003 2004 2005 2006 2007 2008 2009 2010 Sep-2011 17 40s 50s 41.8% 65.3. 6% 5% 7.3% 3.2% 5.8% 4.2% 4.8% 4.4% 3.6% 5.5% 3.3%6.5%2.1%6.2%0.9% 6.5% 0.6% 5.2% 0.5% 13.15. % 5% Because The latest a olderv ai partic lable data from the Departme ipants tend to hav a e larger nt of Labor ar account bae 20s lances, for plan year 2 assets in th 008 e (see U.S. database Department are more concentrated b of Labor, Employee among The analysis includes the 0.4 million recently hired participants (those with two or fewer years of tenure) holding balanced funds in 1998; the 1.4 million recently c plan Asset Allocation and Investment Options recor Source d : ke Tab epers ulatio n2010 sinclu fro m E de B RI mutual /ICI P articfun ipand t-Di cro ec mpanies, ted Retiremeins nt Purance lan Data Co compa llectio nnies, P rojecan t. d consulting firms. Although the EBRI/ICI >$1,and 250,000–$2, s s Of em inars by 500, whic000 h: target- c cdate licking funds on an opti 9,903 t the “Notify on 482, M Me” or “RS 292 S S” buttons $17,806,695, a a542 t the top of o our ho $36,921 me pa age. experienc www.ebr e ofi.org “typical /pdf” /b 401(k riefsp)d plan f/EBRI_IB partic_0 ipants. 11-2010No349_E 1.0%BRI_DCIIA.pdf13.8% 18.4% A target-date fu Figure Gustman, 22, n Al d typi Dist an cal ribution L., and Thom balance wa ly rebalances i of 401(k s $17,686 ts portfol as . The ) Steinm io to become l Plans, Pa tenure variable is generally years working at current employer, and thus may overstate years of eier. ess focu rticipan 2008. sed on ts, “Ho growth aw nd CAssets, by Investme an hange d more focu s in sed on Social income as i Secnt u Stable- rity Opt t approac A ions, f Vfect alue hes an 2010 Fund Rec d passes th es nt .................... Ret e target date of th irement 21 Trends.” e fund, which >30or interpretative rule, or as 57.8% legal, accoLo unting, an actuarial, o s Fr 16.o 7% m 4 r other such prof 01(k) Planessional advice. s T 8.8% ended to ww be S w.ebri. 20. mo al 4% rg l 11.9% 4 401(K) PAR 10% T TICIPA 1996NTS 1997 IN 2010. 24% 1998 1999 To o understand 2000 2001 ch 2002 anges 2003 in 40 0 2004 1(k) partici 2005 2006 p pants’ a 2007 vera 2008 ge e accoun 2009 t 2010 bala ances, it partici pated in a 401(k) plan 60s 63. (particul 2% 8.2% arly a6. m 0% ong ol 4.der 4% part 3.6% icipants 3.1% since 2. 42% 01(k) 1. pla 1%ns wer 0.9% e introduc 0.9% ed 6. o5% nly about 30 hired participants holding balanced funds in 2006; the 2.0 million recently hired participants holding balanced funds in 2007; 50s Sources: B 43. loomberg, B 1% a 4. rclay 4% s Global Inv 3.8% estors, Frank 4.7% Russell C 4. o9% mpany, and S 6.1% tandard &6. P5% oor's. 5.9% 5.6% the 2.4 million recently hired 3.9% 11.1% see Van a D erhei .10 20 % (2010) and Va 10. “401(k) PlnDerhei a an Asset Alloc nd Luation, cas (2010). For Account a disc Balances, ussion anof the variety of f d Loan Activity in actors 2009.” (e.g Investment ., taxes, savings, Company automatic enrollment only to c new hires, while 18 percent applied automatic enrollment to all nonparticipants. The analysis includes the 23.4 millio n 401 (k) plan participants in the year-end 201 0 EBRI/ICI 401(k) database. the Asset ol>der $2,500, Allocatio 40000–$6, 1(k) participation in the 401(k) plan. p n EBR articip 250, by000 I/IC Investment Optio ant I groups. At yea 10, ns 616 r and Age, Sa -end 2010, 1, lary, 5 007, 7 p 958 e and Pla rcent of 401(k n Size $42, ................................................. ) 239, plan 227, assets 123 were held by $41, pa 906 rticipant 20 s in Distributio Benefits Security Administration, 2010c). n of Participants’ Compan a y Stock Allocations is u project 9 su al l y i n cl uhas ded i . Al n lcol 20 the fu 11a. lected nd’s n Natio ame. data nal froCompensation m 1996 throu gSurvey: h 2010, Empl the universe oyee Bene offits da ta in provi Privat de ers Industry varies from in th e yea United r to year. States, In March addition, The All investment option 74. s tha 8%t a plan spons39. or 3% offers significan 100% tly 9.4% affect how participa 100%10.3% nts allocate their 401(k) assets. 100% 15.9% participants holding balanced funds in 2008; the 1.9 million recently hired participants holding balanced funds in 2009; and th 27 The S&P 500 is All an index 67.0% of 500 stock 6.P 4% e sr chosen f cent 5.a 2% oge r mark of et siz Investment 4. eli 3% e gi , liquidity ble par 3. , and industry 4% tCategory icipant 4. 4% group representation. s, by age, 2.1% 2010 0.8% e 2.0 million recently hired 0.6% 0.5% 5.1% NBER Wo60s rking Pape 49.2% r, no. 4. 7% 14105 4(J .0% une). 4.7 Ca % mbridge, 4.8% MA5 : .4% National 5.6% Bureau 4.5% of Econo 4.0% mic Researc 2.7% h. 10.4 % The cross-sectional analysis for this publication found that consolidating the multiple accounts across a majority of the b 22% d years is s important t 20% ago Row ) per . c eno o ta an gesalyze may no ta add sa a to mple of con 100 percent becs s aistent use o f ropar unding tici . pants. As witth previous EB BRI/ICI upda 10% t tes, analysis o of a b 20s >$6,250,000–$12,500,000 a 5,393 1,066,111 $47,345,993,298 $44,410 GICs are gu Figure The mortgages, Institute Van 23, aran guar teed i Average Asset children) that impact replacement d P ne Grou vestmen rspective p. t con 20 tracts. 11. 16, Allocation of 401(k) Accounts, How no. 3, Americ and EBRI a Saves rates, see Brady (2008). For Issue 2011: Brief Aby , Re no. 350 Partic port on ipa (Novem n Va t nguar Age an ber). an an d alysis d 20 Available Inves 10 of the impact of changes in Defi tment ned at O w Contri p ww.ici.or tions bution ............ g/pdf/per Plan 22 Social Da 1ta 6-. participants holding balanced funds in 2010. The Russell 2000 Index measures the performance of the 2,000 smallest U.S. companies (based on total market capitalization) included in the <0.5% Source: Tabulation0% s from EBRI/ICI Parti Source: Tabu40 la ci tio pan 1( ns k f t-Di )r Loan om rected Reti EBas RI/I C a I P remen articipt Pl ant-D an Data Col irected Reltire ecti me onn Proj t Pla ect. n Data Collection Project. Size of 401(k) Account Balances their 50s S0% ource: or 60 T Of abul s, whi ati w ons hilc e from h: 14 tar E B get percent RI/IC date f I Partiunds c iwer pant- D e an opti i reh cted eld o Rn eby tirempartici ent Plan p Daants ta 70.1% Collein t ction h Peir roject. 20s or 3 67.6% 0s (Figure 5, lower 64.1% panel). Distributio 2011. Washin n A 19 lof l96 Equity gton, 19 47. 970% DC: Fu 19 nd 98 U.S. 3.A 6% llocations 19 De 99partment 3.2% 2000 and 4.1 20 o Participa f 01 % Labor, 20 4. 02 2% nBur t Ex 20 ea posure 03 5u .2% 4% of 20 Labor 04to 5. 9% Equ 20 Sta 05ities tistics. 5. 20 5% ........................................... 06 Available at 20 5.07 6% 2008 4.3% 200911.520 %10 20 the sampl c e of plans at any given provider can change. Thus, aggregate figures in this report generally should not be Fig Participa 37 ure EBR 22 I Issu n ts’ pre es al Brief ents locations is rthe egister dis to co ed in the U. tribution mpany S. of Patent and T stock r planse , maine partici rademd ar pants k in Office. lin , e and I w SiSN: 0887 th assets by four previou ?137X/90 s years. 0887 combin Thi ?13 rty-nin ations 7X/90 $ . e of perce 50+. inves 50 nt tment (or 9.1 offeri million ngs. ) The of A tbarget-date fa und typically rebalances its po rtfo lio to beco mTher e less fo e ec’s lo used ots mor n gro wth an e e! d more fo cused o n inco me as it approa ches and passes a 0% Russell 3000 Index (which tracks the 3,000 largest U.S. companies). a 19 providers >$12,to the single individual owning the 500,000–$25,000, 0 to 000 2 >2–5 3,459 m resulted in a >5–10 1,336, n overall increase of 6.6 percent in the avera 004 >10–20$60,949,175,102 >20–30 ge $45, >3401(k) account 0621 s sample At year-end 2 of Row percentages may not add to 100 percent because of rounding. Account con nsistent bal 010, ances The a 64 percen are na401( lyparti sis in cick pant k lu) dt eparticipant account sof non-target-date balanced the 1.1bal millio ancn es ps s a hel rtic (th d ip in ao 401(k) nts se with that pl two ans o at the have r fe we fparti und r ye been in ci apan rassets were assumed to s ots' f te current nurethe inem 2010 plsame pl oyers and and in plare net of an a a s n offsince 200 er be invested in in pl g an com lop ans. any R 3 3 ste) is expecte ock tirem as an equities (see ent savi ngs d d to be Percentage of Remaining Age Group >30 Note: “Fu Compon nds” i ents may n nclSou ude mu rce: Tabu ot add to th c tual fuln ati 0–2 ds, ban e total ons from EBRI/ICI 401(k) Parti ik col n the fi lecti rst col ve tru usts, l mn >2–5 becau ife insu se of rou cipan rance separate accou t-Din rected Reti ding. >5–10 remen nts, an t Plan d an Data Col y pool >10–20 ed i lecti nvestmen on Project. t produ>20–30 ct primarily invested in the security indicated. Security between 1992 a Because of these changes in the cross-secti Valley 03.pdf For and ge, www.e PA: Th bn ri.org e d 2 Van 004 on retirement pa /p gdf/ uard briefsp Groudf p, /EBRI_IB oV ns, anguar tterns, comparin _0 d 11 C see eg average accou -2 nt Gustman a 010 er for _No Ret 35n irem 0d _Steinmeier (2008). 4n01k_Up e t balances acr nt Research. date-0o 9Available ss different ye .pdf at ar-end cross- Hewitt Associa Sourt ces. e: Tab 20 ulat 09a. ions f rHow om EBR Well I/ICI 40 Are 1 (k) P Em articployees ipant-DirectSavin ed Retirg em in ent 4 P0 la1 n ( Dk) ata Pl Coans: llection 20 Pr09 ojec tHe . witt Universe Benchmarks. Source: T Formerly abulations the Lehman B from EBRI/ICI rothers U Participant-Directed .S. Aggregate Bond Index Retirement , the Barclay Plan s C Data apital U Collection .S. Aggregate B Project. ond Index is composed of securities covering the target date o f the fund,Less which Than $10,000 is usually included in the fund’ s name. More Than $100,000 hela d in plans at previ investme ous nt em opti pl on oyers . or rolled over into IRAs are not included. >$40,000–$50,000 used ww to w.bls.gov estim Sour ate ce: / T time trends. Records ncs/ebs abulations f/ rom be the nef EBRI/ICI its/20401( 1we 1/ kown )re Paren tic eipant rship/private crypte -Direcd ted prior Retir/t em to i able ent n Plan clusio 02a. Data pdf n Collec in th tion e Prdata oject.base to conceal the identity of firs At year- t cate >Asset $25, end gory 000, Allocatio 2 000–$62, 010, is the the bas 500, n to E avera 000 e gro 401( quity g up, e k) ac A Funds c whic ccount ounth .............................................................................................. Bcon al 2, bal anc 528 s ais ence ts of pla was $ 20s ns 60, 2, 100, th 329 at 167 do an 40s d not o the fmedian fer $98, compa 60s 641, accou 290, ny 405 st nt ock, Aba ll lance GICs, or was other $17, $46, ....... 968 68 stabl 6 24 (Fi e g vure alue 9). b Figure the 401( 24, Note: “Balanced funds” include mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investmen k) a Average Asset A target-date fu participants i nd typi n Allocation of 401(k) Accounts, the cally rebal 2010 an ces i EBts portfol RI/ICI io to become l 401(k) da ess focu ta by base sed on Partic were growth ipain n an t plans Salary d more focu thand I at sed on offered com n ivne come as i stment t product primarily invested in a t approac pany Optio stock he nss ......... as an 23 Older, longer-t a enured, and higher-income participants S aten laryd Ra to nghave larger e account balances, which are important for balance. bThis s Minor t inv gov atistic estment bernment and corporate bonds, mortgage-back should options are not be interp showreted n; therefore, with caution, as it may not repres ed securities, and asse percentages do not add Year t-back s ed securities (rebalanced to of 100 percent. Percentages Tenure ent the total 401(k) assets owned by the monthlyare dollar-w by market capitaliz eighted ation). T avera he index ges. 's A target-date fu The nd typi T sam he p cal anal le lof y rebal ys parti is in ci an cpants ludes ces i changes ts portfol the 23.4 over ti m io to become l illiom n e par . ticipa ess focu nts in the sed on year-e growth nd 201 0 an EB d more focu RI/ICI databa sed on se. income as it approaches and passes the target date of the fund, which Investment Co p published 0% in 2 2 mpany I 012. nstitute, Quarterly Supplementary Data Years ). ofThe allocation to equitie Tenure s in target date funds varies with the Row percentages may not add to 100 percent because of rounding. Participa No te n : ts “ Fun inds 401(k ” include ) plans mutual frepresent unds, bank coa llec wi tivde e trura stsng , life e ins of ur j ao nc b e te sep nure arate ac ex cpe o unriences ts, and an.y I po no 20 led10, inves39 tment pe pr rcent o duct of t primhe arilypartici investedpants sectional https://institut Lincolnshire, snapshots can lead t IL ional.vanguar : Hewitt Ze rAssociates LLC. o o false conclusions. For exam d.com/iam Visit t EBRI on- /pdf/HAS11.pdf 87% li liSiz ne toda ple e, of newly formed plans would te Account 75% y: Balanc w www.ebri.or e 87% g g 79% nd to pull down the aver 7 age mix of equities and fixed-income securities. b and passes the target date of the fund, which is usually included in the fund’s name. >$62,500, b 000–$125, total return consists of 000,000 price appreciation/depreciation plus income as a per 1,084 >5–10 1,938, Years 697 centage of the original inv $95, estment. 071,751,337 $49,039 NoNot te: Tall participants he sample of parti are offered cipants changes this inv over ti estment me. option. 28 Row percentages may not add to 1 00 percent because of rounding. is u employers sually included i an n th d e fu em nd’s n ployees ame. , but were coded so thatNum bot ber h could of Participant be trac s in Plan ked by researchers over multiple years. Data 30 There funds. Holden, investment in is Thi th Sarah e wide se rty-f cu op ritvariation , tion ive y Jack Va indipercent ca (Figure 22). Amon ted.nDer in 401(k ofhei, partici )Luis plan pants Alons g parti thes ino cipants’ e the , and Crai partic 2010 ipants acco dat g C ua opelan , nba t 73 ba se percent lances were d. 2008. in at h e these plans, w year-end 2010. Abo ld “401(k) Pla 20 percent n Asset hich or less o gen u Allocatio t thr e f rally th eei e-quart r n offer account , Account ers equity of th ba la fu nces e nds, meetin Asset g their Allocatio i<100 Participants ncome-r n of 401(k) Plan eplacement nee Participa d 100–500 s in retir ntse Witho ment.ut For Equity Funds 501–1,000 longer-ten ..................................................... ured parti 1,001–5,000 cipants in their 20s with >5,000 salaries 24 c b 1–10% 3% 8% 6% 6% individual. Sour The ce: impact Tabulations of acco from EBRI/ICI unt consolidati Participant-Diro ec n ted varied with th Retirement Plan Data e participant’ Collection Proj s age and ect. tenure with the current employer. The funds’ The tende target dates. For target GICs ncy are guaranteed of the account balance-to-sala investment -date contracts. funds, investors were assumed to be in a fund ry ratio to peak at higher salary levels and then whose target date was nearest to their fall off likely reflects the GICs are guaranteed investment contracts. Figure >$125, 25, Sour 000, Average Asset Nc oe: t000–$250, eT : "abulations Equity fu000, nds from ” 000 Allocation of 401(k) Acco inc EBRI/ICI lude mut Par ualtic fu ipant- nds, ba D 647 irnk ec ted collRetir ectivem e unts, trent ustPlan s 2, , l009, ifby e Data ins 640 Pla uran Collec n c e S sti e ion ze par Pr at a oj e n ec ac d $112, t. cI on unt vestment 544, s, and an 204, y836 po Options oled investm ..................... ent pro$56, duct 002 25 had account balanc five or Sour fewer e, ce: but wo Ty abulations ears uld tell us no of t from e nure EBRI/ICI an Par thing ab d tic5 ipant- percent Do irec ut co ted had mo Retir nsistently ement re Plan tha participating Data n Collec 30 y tion eaPr rs workers. Simila ojof te ect. nure (Figure rly, the aggreg 6). The median ate average tenure account at the Note: “Funds” inSource: clude mu Tabulations tual funds, ban from EBR k col I/IC lecti I Participant-D ve trusts, l iriect fe i ed nsu Retirement rance separate accou Plan Data Collection nts, an Project. d any pooled investment product primarily invested in the security indicated. The Note: c The tenure variable >1 is0% gener –20% ally years working at current em3% ployer, and thus6% may overstate y 3% ears of participation 5% in the 401(k) plan. provided Note: for e “Funds” include ach participan mutual t funds, bank collectiv included date e of trusts, birtlife insurance h, from whic separate h aaccounts, n age grou and any p is pooled assigned; investment date o product primarily f hire, inv from ested which a bond partici Balances, fu pants nds, Note: Col Sim ource: n T u mn he and o the ney percen tenur Tabul 20 Loan e funds, var 10 tages may n atiio able nEBR Activity i s fris a om n gener I /ICI d E ot add to 100 percen Bbalan R ally n I/IC 40 2 yI ear 007. P 1(k ced asrti w c) or i” pant-D fd kunds ing Inve atabase t becau at c irestment ur cas ted rent se of rou invest Rhad em etirem ploy Compa na di ent m er ccount n, g. ent and Plan n thus o D y p abalanc ta Institute tions. mC ay o lover lecti es Another 26 s otn ate P that Pe ry oj ear rspective ect. swere of parpercent tic lio pation wer 14, in no. than the of 401( 3, partici $6 kand ) plan. 0,329, p EB ants RI the were Issue size in Brie of plans the f, Source: Note: prim Tabulations ar Tihe ly intenur vested e from var in ieq able EBR uitiis es I/IC gener . I Participant-D ally years wor irkect ing ed at c R ur ertirem ent em ent ploy Plan D er, and ata thus Co m llection ay overProject. state years of participation in the 401(k) plan. between $20,000 and $40,000, the median account balance was $6,299 in 2010 (Figure 16). Longer-tenured largest >Asset $250, increases in average account bala Note: 000, Allocatio Percentages 000 © 2011, Emplo ndo to E not add quities to 100 percent .................................................................................................. yee B because ence nefit 850 of occurred among older participants with Research Institute rounding. 12,984,726 ?Education and Re $925,523, se 217, ar fewer years of tenure. For example, c662 h Fund. All rights re $71, .......... se 278 rved 24 . influence of two competing forces. First, empirical research suggests that higher earners tend to contribute higher tenure variable is generally years worki> ng at cu 20–30% rrent employer, and thus may overstate years of parti 2% 4% cipation in th 2% e 401(k) plan. 3% in the security indicated. current employer was eight years in 2010. balance would tend to be pulled down if a large number of participants retire and roll over their account balances. Note: Components do not add to 100 percent because of rounding. The tenure variable is generally years working at current employer, and Figure tenure A l26, lran ge Asset Allocatio is assigned;n >ou 3D 0–80% tstanding istributionloan 64, of 455 4 01(k balance; ) Acco fun 5% 23, unt d 441, s Balan in 185 the ces 7% partici to Eq p $1, uity ant’s 414, 3%Fun 179, investm 196, ds, 794 by Partici 6% ent portfolios; pant A g $60, and asset val e ........ 329 25 ues that average offer accou GICsn and other t balance. stable value fu In fact, 39.2 pe nds rcent as an inves of participants had acco tment option, in unt additio balanc n to es the of less th “base” an op$1 tions. 0,00Alternativ 0, while ely, Sources: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project, U.S. Department of Labor. thus may overstate years of participation in the 401(k) plan. >80% 1% 1% * 1% Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. ebri.org NoIssue Bri te: The medi e an f • December account balance at year-end 2010 w 2011 • No. 366 as $17,686. 5 * Less than 0.5 percent. ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org A A resebri.org Issue Brief • December ebri.org Issue Brief • December ebri.org Issue Brief • December ebri.org Issue Brief • December ebri.org Issue Brief • December ebri.org Issue Brief • December ebri.org Issue Brief • December ebri.org Issue Brief • December ebri.org Issue Brief • December ebri.org Issue Brief • December ebri.org Issue Brief • December ebri.org Issue Brief • December ebri.org Issue Brief • December ebri.org Issue Brief • December ebri.org Issue Brief • December ebri.org Issue Brief • December ebri.org ebri.org Issue Brief • December ebri.org Issue Brief • December ebri.org Issue Brief • December ebri.org ebri.org Issue Brief • December ebri.org Issue Brief • December ebri.org Issue Brief • December ebri.org Issue Brief • December ebri.org Issue Brief • December ebri.org Issue Brief • December earc Issue Bri Issue Bri Issue Bri Issue Bri Issue Bri Issue Bri Issue Bri Issue Bri Issue Bri Issue Bri Issue Bri Issue Bri Issue Bri Issue Bri Issue Bri Issue Bri Issue Bri Issue Bri Issue Bri Issue Bri h rep Issue Issue ortte e e e e e e e e e e e e e e e e e e e from the EBRI ffffffffffffffffffff • December • December • December • December • December • December • December • December • December • December • December • December • December • December • December • December • December • December • December • December Brief Brief • • December December E E 2011 • No. 366 2011 • No. 366 2011 • No. 366 2011 • No. 366 2011 • No. 366 2011 • No. 366 2011 • No. 366 2011 • No. 366 2011 • No. 366 2011 • No. 366 2011 • No. 366 2011 • No. 366 2011 • No. 366 2011 • No. 366 2011 • No. 366 2011 • No. 366 2011 • No. 366 2011 • No. 366 2011 • No. 366 2011 • No. 366 ducation and 2011 2011 2011 • No. 366 2011 • No. 366 2011 • No. 366 2011 • No. 366 2011 • No. 366 2011 • No. 366 2011 • No. 366 2011 • No. 366 2011 • No. 366 2011 • No. 366 2011 • No. 366 2011 • No. 366 2011 • No. 366 2011 • No. 366 2011 • No. 366 2011 • No. 366 2011 • No. 366 2011 • No. 366 2011 • No. 366 2011 • No. 366 2011 • No. 366 2011 • No. 366 2011 • No. 366 2011 • No. 366 2011 • No. 366 • • No. No. R R esearch Fund 366 366 © © 2011 Employee e Benefit Researc ch Institute 29 28 32 19 30 11 15 16 33 22 40 31 23 18 21 39 27 34 35 25 38 36 14 13 9 8 7 47 44 42 43 37 49 20 45 50 24 26 17 12 10 46 48 6 2 3 4 Note: Column percentages may not add to 100 percent because of rounding. ebri.org Issue Brief • December 2011 • No. 366 41 Figure 33 Asset Allocation Distribution of Participant Account Balances to Company Stock in 401(k) Plans With Company Stock, by Participant Age Figure 24 a,b Percentage of Participants, 2010 Figure 32 Average Asset Allocation of 401(k) Accounts, by Participant Salary and Investment Options Figure 38 Percentage of Account Balance Invested in Company Stock a Asset Allocation Distribution of 401(k) Participant Account Balances to Balanced Funds, by Tenure Age Group Zero 1–10% 11–20% 21–30% 31–40% 41–50% 51–60% 61–70% 71–80% 81–90% 91–100% Asset Allocation Distribution of Account Balances to Percentage of account balances, 2010 a,b 20s 62.4% 10.0% 6.0% 4.5% 3.4% 4.5% 2.6% 1.0% 0.7% 0.6% 4.3% Percentage of Participants, 2010 Balanced Funds Among Recently Hired Participants, by Age d 30s 50.5% 13.8% 9.5% 6.9% 4.8% 4.1% 2.7% 1.5% 1.1% 0.8% 4.3% GICs /Stable- Equity Target-date Non-Target-date Bond Money Company a,b 40s 46.8% 15.2% 9.8% 7.3% 5.1% 3.9% 2.9% 1.8% 1.3% 1.0% 5.0% Percentage of Account Balance Invested in Balanced Funds b c Percentage of Recently Hired Participants, 2010 Figure 29 Salary Funds Funds Balanced Funds Funds Funds Value Funds Stock 50s 44.6% 16.6% 10.0% 7.3% 4.8% 3.7% 2.9% 1.9% 1.4% 1.1% 5.7% Tenure (years) Zero 1–10% 11–20% 21–30% 31–40% 41–50% 51–60% 61–70% 71–80% 81–90% 91–100% d 60s 48.0% 15.4%Average Asset Allocation for 401(k) Plan Participants Without 8.9% 6.5% 4.1% 3.2% 2.7% 1.7% 1.4% 1.1% 7.0% Plans Without Company Stock, GICs, or Other Stable-Value Funds Percentage of Account Balance Invested in Balanced Funds 0–2 37.0% 3.4% 2.8% 2.7% 1.7% 1.8% 2.7% 1.4% 1.3% 1.1% 44.0% All 49.4% 14.5% 9.1% 6.7% 4.6% 3.9% 2.8% 1.6% 1.2% 1.0% 5.2% Equity Fund Balances, by Participant Age or Tenure $20,000–$40,000 42.7% 21.9% 6.8% 17.2% 6.1% Age Group Zero 1–10% 11–20% 21–30% 31–40% 41–50% 51–60% 61–70% 71–80% 81–90% 91–100% >2–5 42.2% 4.7% 4.0% 3.8% 2.4% 2.4% 2.3% 1.7% 1.7% 1.6% 33.2% So urce: Tabulations from EB RI/ICI P articipant-Directed Retirement P lan Data Collection P roject. a >$40,000–$60,000 43.5% 19.2% 7.2% 16.6% 6.7% The analysis includes the 9.1 million participants in plans with company sto ck at year-end 2010. 20s >5–10 30.4% 47.6% 2.9% 6.4% 2.3%5.5% 2.1% Percentage of account balances, 2010 5.0% 1.4% 3.1% 1.6% 2.7% 3.2% 2.5% 1.4% 1.7% 1.3% 1.7% 2.5% 1.1% 21.6% 52.3% b >$60,000–$80,000 45.7% 17.8% 6.4% 15.9% 6.1% Ro w percentages may not add up to 100 percent because o f ro unding. >10–20 52.1% 8.1% 6.2% 5.4% 3.4% 2.7% 2.6% 1.8% 2.6% 2.2% 12.8% 30s 37.0% 3.5% 3.1% 2.9% 1.9% 1.9% 2.8% 1.6% 1.5% 1.3% 42.5% b >$80,000–$100,000 48.1% 15.9% 5.6% 16.3% 5.9% GICs /Stable- Target-dateNon-Target-date Bond Money Company >20–30 57.4% 9.2% 6.2% 5.4% 3.5% 2.7% 2.2% 1.4% 1.2% 1.1% 9.6% 40s 40.1% 3.6% 3.1% 3.1% 1.9% 1.9% 2.4% 1.5% 1.4% 1.1% 39.9% >$100,000 a 48.6% 12.3% 5.9% 17.2% 5.9% c Funds Balanced Funds Funds Funds Value Funds Stock Other Unknown Total >30 61.8% 8.6% 5.4% 4.5% 3.0% 2.2% 1.9% 1.2% 1.0% 1.0% 9.4% Figure 34 50s 40.9% 3.8% 2.8% 2.9% 1.8% 1.8% 2.3% 1.3% 1.2% 1.1% 39.9% All 48.6% 14.2% 6.3% 17.8% 6.5% a b All 46.6% 6.2% 4.9% 4.4% 2.8% 2.4% 2.4% 1.6% 1.7% 1.7% 25.2% Age Group 60s 44.8% d 3.7% 2.5% 2.7% 1.6% 1.8% 1.9% 1.1% 1.0% 1.1% 37.8% Many Recently Hired 401(k) Plan Participants Hold Balanced Funds Plans With GICs and/or Other Stable-Value Funds 20s 56.7% 17.4% 4.4% 3.9% 6.1% 7.0% 1.5% 2.5% 100% c All 37.0% 3.4% 2.8% 2.7% 1.7% 1.8% 2.7% 1.4% 1.3% 1.1% 44.0% Percentage of recently hired 401(k) participants holding balanced f Percentage of Account Balance Invested in Target-date Funds unds, 1998–2010 $20,000–$40,000 39.1% 17.4% 11.1% 7.5% 2.4% 18.0% 30s 47.8% 14.3% 7.2% 6.3% 9.2% 8.5% 3.2% 2.9% 100% Age Group 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Tenure (years) Zero 1–10% 11–20% 21–30% 31–40% 41–50% 51–60% 61–70% c 71–80% 81–90% 91–100% >$40,000–$60,000 38.2% 13.4% 15.3% 7.3% 2.7% 17.7% Percentage of Account Balance Invested in Target-date Funds 40s 36.7% 12.1% 9.8% 7.7% 13.7% 11.2% 5.1% 3.2% 100% 20s 27.0% 28.3% 27.1% 27.3% 32.7% 35.1% 38.9% 43.5% 48.5% 51.1% 63.6% 64.1% 69.6% 0–2 52.4% 1.8% 1.7% 1.7% 1.1% 1.2% 2.1% 1.0% 1.1% 1.0% 35.0% >$60,000–$80,000 41.8% 10.5% 15.1% 7.7% 2.5% 17.0% 50s 26.5% 10.4% 12.3% 9.3% 20.9% 12.1% 5.2% 3.0% 100% Age Group Zero 1–10% 11–20% 21–30% 31–40% 41–50% 51–60% 61–70% 71–80% 81–90% 91–100% 30s 29.0% 31.0% 28.3% 26.5% 33.1% 36.2% 39.8% 42.8% 47.9% 54.2% 59.6% 61.2% 63.0% >2–5 >$80,000–$100,000 59.8% 2.6% 45.5% 2.1% 2.1% 9.5% 1.4% 13.2% 1.3% 8.4% 1.5% 1.1% 2.2% 1.2% 16.6% 1.2% 25.6% 60s 19.7% 8.5% 15.5% 11.8% 28.3% 9.3% 4.0% 2.8% 100% 20s 48.0% 1.2% 1.3% 1.3% 0.9% 1.0% 2.6% 1.0% 1.0% 0.9% 40.7% 40s 30.5% 33.6% 30.8% 27.9% 33.7% 35.7% 39.8% 42.1% 46.6% 52.8% 57.8% 59.3% 59.9% >5–10 >$100,000 66.0% 3.5% 47.9% 2.6% 2.4% 9.1% 1.7% 11.0% 1.5% 8.9% 1.5% 1.1% 2.1% 1.2% 15.9% 2.1% 16.3% d All 29.9% 10.9% 11.9% 9.3% 19.8% 10.7% 4.5% 3.1% 100% 30s 52.2% 1.9% 1.9% 1.9% 1.2% 1.3% 2.2% 1.1% 1.2% 1.1% 34.0% 50s 30.9% 34.9% 32.1% 29.2% 33.9% 35.5% 40.3% 43.3% 47.8% 53.4% 58.0% 58.7% 59.1% >10–20 All 71.4% 4.5% 43.0% 2.9% 2.4% 13.4% 1.6% 9.2% 1.5% 8.2% 1.5% 1.2% 2.5% 2.1% 18.2% 1.8% 9.2% Tenure (years) 60s 40s 28.4%54.7% 34.9% 2.0%33.2% 1.8% 29.1% 1.9% 30.2% 30.7% 1.2% 36.3% 1.3% 41.6%1.9% 45.5% 1.0%50.1% 1.1% 53.9% 0.9% 53.6% 32.2% 55.2% >20–30 77.5% 5.0% 2.7% 2.2% 1.6% 1.3% 1.1% 0.8% 0.7% 0.7% 6.3% Plans With Company Stock 0–2 54.3% 10.5% 10.8% 5.1% 9.0% 4.6% 3.5% 2.2% 100% All 50s 28.9%55.0% 31.3% 2.2%29.1% 1.7% 27.4% 1.8% 33.0% 35.4% 1.2% 39.3% 1.2% 42.8%1.7% 47.6% 0.9%52.7% 1.0% 59.9% 0.9% 60.9% 32.4% 63.0% >30 80.8% 4.6% 2.2% 1.7% 1.2% 1.0% 0.9% 0.6% 0.6% 0.6% 5.9% $20,000–$40,000 34.1% 14.3% 3.5% 14.5% 11.2% 16.4% >2–5 47.3% 14.6% 10.5% 6.6% 9.5% 6.2% 3.7% 2.2% 100% Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. 60s 58.3% 2.2% 1.5% 1.7% 1.0% 1.1% 1.4% 0.7% 0.8% 0.9% 30.4% All >$40,000–$60,000 64.4% 3.4% 36.8% 2.4% 2.1% 12.2% 1.5% 5.8% 1.3% 14.6% 1.5% 10.5% 1.0% 1.3% 1.4% 13.0% 19.7% a >5–10 37.9% 13.0% 10.7% 8.9% 13.8% 8.1% 3.5% 3.7% 100% The analysis includes participants with two or fewer years of tenure in the year indicated. All 52.4% 1.8% 1.7% 1.7% 1.1% 1.2% 2.1% 1.0% 1.1% 1.0% 35.0% >$60,000–$80,000 37.7% 10.8% 6.1% 14.1% 8.6% 14.8% b >10–20 30.4% 10.8% 11.4% 9.2% 17.6% 11.4% 4.9% 3.7% 100% Percentage of Account Balance Invested in Non-Target-date Balanced Funds "Balanced funds” include mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investment product primarily invested in a mix of equities and fixed-income securities. >$80,000–$100,000 38.2% 7.9% 6.7% 12.1% 8.4% 18.1% >20–30 20.6% 10.2% Percentage of Account Balance Invested in Non-Target-date Balanced Funds 11.9% 9.3% 24.2% 14.0% 6.1% 3.3% 100% Tenure (years) Zero 1–10% 11–20% 21–30% 31–40% 41–50% 51–60% 61–70% 71–80% 81–90% 91–100% >$100,000 38.0% 7.6% 5.8% 14.5% 6.1% 20.1% >30 13.4% 8.8% 12.7% 12.6% 31.2% 14.1% 4.5% 2.6% 100% Age Group 0–2 Zero 83.0% 1–10%2.5% 11–20% 1.6% 21–30% 1.3% 31–40% 0.6% 41–50% 0.7% 51–60% 0.6% 61–70% 0.4% 71–80% 0.3% 81–90% 0.2% 91–100% 8.8% All 37.0% 11.4% 4.8% 13.9% 8.9% 18.8% d Figure 35 All 29.9% 10.9% 11.9% 9.3% 19.8% 10.7% 4.5% 3.1% 100% 20s >2–5 81.0% 80.2% 2.6% 3.5% 1.4%2.6% 1.0%2.0% 0.5% 1.1% 0.7% 1.1% 0.7% 0.8% 0.4% 0.6% 0.3% 0.5% 0.4% 0.2% 7.2% 11.4% d a Plans With Company Stock and GICs and/or Other Stable-Value Funds Many Recently Hired 401(k) Plan Participants Hold Target-date Funds Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. >5–10 78.9% 4.6% 3.7% 2.9% 1.5% 1.2% 1.0% 0.5% 0.5% 0.4% 4.9% 30s 83.1% 2.7% 1.8% 1.3% 0.7% 0.7% 0.6% 0.5% 0.3% 0.2% 8.3% a $20,000–$40,000 35.3% 7.2% 9.3% 7.3% 1.5% 18.6% 18.6% 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, which is usually Percentage of recently hired participants, 2007, 2008, 2009 and 2010 >10–20 78.0% 5.5% 4.2% 3.4% 1.8% 1.3% 1.1% 0.5% 0.4% 0.4% 3.4% 40s 83.9% 2.5% 1.7% 1.5% 0.7% 0.7% 0.6% 0.5% 0.3% 0.2% 7.5% included in the fund’s name. >$40,000–$60,000 35.1% 7.6% 9.9% 7.0% 2.3% 17.3% 17.5% b >20–30 77.2% 6.1% 4.3% 3.5% 1.9% 1.3% a 1.1% 0.6% 0.5% 0.4% a 3.1% Holding Balanced Funds Holding Target-Date Funds Holding Non-Target-Date Funds 50s GICs are guaranteed investment contracts. 84.5% 2.4% 1.6% 1.4% 0.7% 0.7% 0.6% 0.4% 0.3% 0.2% 7.2% >$60,000–$80,000 37.0% 7.8% 9.1% 7.2% 2.2% 16.6% 16.5% c >30 78.4% 5.9% 3.9% 3.1% 1.8% 1.2% 1.0% 0.5% 0.4% 0.4% 3.3% Row percentages may not add to 100 percent because of rounding. Percentages are dollar-weighted averages. Age Group 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 60s 85.5% 2.1% 1.3% 1.3% 0.7% 0.7% 0.5% 0.4% 0.2% 0.2% 7.2% >$80,000–$100,000 39.6% 7.0% 9.0% 7.8% 2.0% 15.2% 15.0% d The analysis includes the 11.1 million participants with no equity funds at year-end 2010. All 79.8% 4.4% 3.3% 2.6% 1.4% 1.1% 0.9% 0.5% 0.4% 0.3% 5.2% 20s 48.5% 51.1% 63.6% 64.1% 69.6% 29.4% 31.7% 46.5% 48.5% 52.0% 22.5% 21.8% 19.3% 17.7% 19.0% All >$100,000 83.0% 2.5% 1.6% 41.1% 1.3% 6.7% 0.6% 6.6% 0.7% 7.5% 0.6% 0.4% 1.4% 0.3% 15.5% 0.2% 13.0% 8.8% Note: “Funds” include mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investment product primarily invested in the security indicated. Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. 30s 47.9% 54.2% 59.6% 61.2% 63.0% 28.5% 35.1% 43.5% 47.3% 47.8% 22.5% 22.2% 18.8% 16.4% 16.9% All 37.7% 6.6% 7.3% 7.5% 2.0% 18.3% 15.8% Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. a The tenure variable is generally years working at current employer, and thus may overstate years of participation in the 401(k) plan. The analysis includes the 23.4 million 401(k) plan participants in the year-end 2010 EBRI/ICI database. a 40s 46.6% 52.8% 57.8% 59.3% 59.9% 27.4% 34.2% 41.8% 45.5% 45.3% 21.3% 21.4% 18.3% 16.1% 16.1% The analysis includes the 3.2 million recently hired participants (those with two or fewer years of tenure) in 2010. Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. b Row percentages may not add to 100 percent because of rounding. a b 50s 47.8% 53.4% 58.0% 58.7% 59.1% 28.1% 34.9% 42.2% 45.2% 45.0% 21.4% 21.2% 18.1% 15.5% 15.5% Row percentages may not add t Minor investment options are not shown; therefore, row percentages will not add to 100 percent. Percentages are dollar-weighed o 100 percent because of rounding. averages. c 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, which is usually included in b c Salary information is available for a subset of participants in the EBRI/ICI database. 60s 45.5% 50.1% 53.9% 53.6% 55.2% 26.1% 32.1% 38.4% 41.0% 41.7% 19.8% 20.3% 17.3% 14.2% 14.5% 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, which is usually included in the fund’s the fund’s name. c 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 name. All 47.6% 52.7% 59.9% 60.9% 63.0% 28.3% 33.8% 43.6% 46.6% 47.6% 21.9% 21.7% 18.7% 16.5% 17.0% Note: “Funds” include mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investment product primarily invested in the security indicated. The tenure variable is which is usually included in the fund’s name. Note: “Funds” include mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investment product So urce: Tabulations from EB RI/ICI P articipant-Directed Retirement P lan Data Co llectio n P roject. primarily invested in the security indicated. d generally years working at current employer, and thus may overstate years of participation in the 401(k) plan. a A target GICs are guaranteed investment contracts. -date fund typically rebalances its portfolio to become less focused on growth and mo re focused on inco me as it approaches and passes the target date o f the fund, which is usually included in the fund’s name. Note: “Funds” include mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investment product primarily invested in the security indicated. Note: The anal ysis includes the 3.2 millio n recentl y hired participants (those with two or fewer years of tenure) in 201 0, the 3.1 millio n recentl y hired participants in 2009, the 4.0 millio n recentl y hired participants in 2008, the 3.8 million recently hired participants in 2007, and the 2.8 million recently hired participants in 2 006. "Funds" include mutual funds, bank co llective trusts, life insurance separate accounts, and any poo led investment product prima rily invested in the security indicated.

Volume 366

Pages 52

EBRI Issue Brief

Jack VanDerhei

Sarah Holden

Luis Alonso

Steven Bass

Retirement