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401(k) savers continued to seek diversified portfolios in 2011, with 61 percent of 401(k) participants’ assets invested in equity securities and 34 percent in fixed-income securities, on average, according to the annual update of a joint study released today by the Employee Benefit Research Institute (EBRI) and the Investment Company Institute (ICI).

  • The bulk of 401(k) assets continued to be invested in stocks. On average, at year-end 2011, 61 percent of 401(k) participants’ assets was invested in equity securities through equity funds, the equity portion of balanced funds, and company stock. Thirty-four percent was in fixed-income securities such as stable-value investments and bond and money funds.
  • Seventy-two percent of 401(k) plans included target-date funds in their investment lineup at year-end 2011. At year-end 2011, 13 percent of the assets in the EBRI/ICI 401(k) database was invested in target-date funds and 39 percent of 401(k) participants held target-date funds. Also known as lifecycle funds, these funds 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 2011, 51 percent of the account balances of recently hired participants in their 20s was invested in balanced funds, compared with 44 percent in 2010, and about 7 percent in 1998. A significant subset of that balanced fund category is target-date funds. At year-end 2011, 40 percent of the account balances of recently hired participants in their 20s was invested in target-date funds, compared with 35 percent at year-end 2010.
  • 401(k) participants continued to seek diversification of their investments. The share of 401(k) accounts invested in company stock remained at 8 percent in 2011. This share has fallen by more than half since 1999. Recently hired 401(k) participants contributed to this trend: They tended to be less likely to hold employer stock.
  • Participants’ 401(k) loan activity remained steady, although loan balances increased slightly in 2011. At year-end 2011, 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 year-end 2010, 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 2011, unchanged from year-end 2010. Loan amounts outstanding increased slightly from those at year-end 2010.
  • The year-end 2011 average account balance in the database was 2.2 percent lower than the year before, but may not accurately reflect the experience of typical 401(k) participants in 2011. 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 2013.

ebri.org Issue Brief • December 2012 • No. 380 33 Figure 47 Figure 5 Figure 1 Figure 21 30 Figure 40 40 401(k) Loan Activity Varied Across 401(k) Plan Participants Asset Allocation and Investment Options ............................................................................................... 17 Figure Older, Holden, Withi The Typical 401(k) Plan Participant target-date fu largest increases in average account bala Hewitt Associa were 9 percen partici acco Fig 65th birthday. Thirty-five The te u . . re unt balanc n 2 2 longer-t p th 18, 42, ants i 012 008 Sarah ndenc e ye Rat As per a. a. n s a nds, non Private “Employe The equity y the , Jack Va c ie, e t at year t renure o of of the account balance-to-sa ent of es. 20 -en t Allocatio but wo 20 d40 d 201 partici 11 09a. Pensio , a 1(k – -en nDer uld tell us no e B EBR target-dat n 1 E po )n d hi A d How D ertio B nefits hei, a p n Pla ccount B 2010 a IiRI/ICI ants in gher /ICI sn was estimated using the i tribution Well n i n -incom e 40 B n d Luis n data thing ab th balanc Are th d ullet 1(k a 11 lanc e U e 2 of nce occurred among older participants with ) Em ba i e participants p n d Alonso. 2009. 011 e to S nited Recently ed Historical a e s lo ary ratio to pe tabase e rcent ployees u it is fun data t co States ad at year lary nsistently pos s, or c Hire base had Savin Tables s for , ten i a Figure 25 bl March 2008.” d “4 were Partic o n -en ccount e to Partici ak at high mpany stock g dust 01(k d an participating workers. Simila an d to have larger l in ry a ink i 201 d I i) d p these p balanc Plan ants i Graph ant n v 1). n vestin erag er sal divi 40 A News rel n plans, sset Allocation es that s duals across e equity perce The patter as their T 1(k (2 a g in ry leve heir ) 010 accou Accou 4 20s, which 0 e were Data equity 1 ase, ls and ( fewer years of tenure. For example, n k) Pl nt bal n b o generally l t y plans an August n o Release f, Account Balance Ten then fall off likel investment. target tage for the a wer t ans: 20 rly, ances, the aggreg ure h7, 2008. Availa -date a an V d acros to Co Rati of 09 which eBala $5 fer rsion 1. He o of 8 A ssigned target-date mpany Stock equity ,witt Univ n nces, an are s 991, s ate average d a majority of the a result, y40 reflects the non–tar 0) im the 1(k fu . W portant for ble at d Loa ) nds, erse size a shin ma g et account bond n of the -date ny g t on , 401(k) Plan Characteristics, b Fi Figure y gu Nru emb 2 27 6er of Plan Participants, 2011 Jack VanDerhei is director of research at the Employee F Be igur nefit e 49 Research Institute (EBRI). Sarah Holden is senior 401(k) Plan Asset Allocation, Account Balances, and Loan Avera 401(k) Participants ge Asset Allocation o Represent a Range f 401(k) Accounts, bof Ages y Participant Age Figure 30 Recently Hired 401(k) Plan Participants Tend to Be Less Likely to Hold Company Stock Figure 36 28 Percentage of Eligible Participants With 401(k) Loans, Number of Plan Participants Total Plans Total Participants Taotal Assets* Average Account Balance partici recordkeepers References fund calculated influence of two competing forces. First among participants in their 60s with two meetin Endnotes funds, average accou balance would tend to be pulled down if balanc Asset Allocatio p money ed fu g th ants www.bls.go DC: U.S. Activity in Benchmarks in 4 Account Ba eir nd use vari wi 01 i.funds, using the n th no n ( This k) t ba come-r De n 2008.” by v/n P pa . lance. lan improves the identifica equity f and bal Lincolnshire, Investment Optio lrtment of e a ed wi c eplac ws.release/a ns e to S Mo I In Wit nvestmen rningstar Lifecy unds te a h fact, 40.5 pe ment a h nced fu part A lary Com Lab Average As sset I had ex icipa L nee fo o tr: Hewitt p Company r, Employee chives/ebs2_ r Partici nds ,any Stock, A empirical research a large number of d or f n n s i posure to lt a s la o rc cle Allo n e and Age, Sa s ti g cat wer years of tenure, the aver retir ent of investment o Associates LLC. on of active e a pants set Allocation of 401(k) Accounts, Ins in o b e catio d lin Bene n participants had acco ment. y 08072008.pdf tequit Partici iitute R n D Their n eup i Index. fits s lary, Figure y-re Figure 43 Fig t suggests that participants retired. partici r Secur p For longer-t of plan e p ib 20s, tions. searc and Pla ant A late u u rt e 12 ip d o 4 i ants a Anoth h Pers ty Admin by Ten ginve n invest e of ............................................................. 37 n S s e tments throu higher earners n ipective nured partici 401( e ze m u age account ba unt d r r 27 percent re ent o i.................................................... stration e .................................................. 21 balanc sulted i k)p A 15, tions. ccou (Novem es o no. 2, n p g o ants in t h com tend to contrib the reclassific lance increased ff less th partic n an t ber). Availa pdany hEBRI Issue Brief ipants eir an stock or ba 2 $1 0 a u tion of nearly s with 0,00 were in te higher 16 percent with the ble at 0, salari whil lanc pla 18 , no. e n ed es s that fun 335 ds director of Retirement an Asset Allocation Distribution of 401(k) Participant Account d Investor Research at the Inv Figure 18 estment Company Institute. Luis Alonso is director of Figure 45 Percentage of ac Figure 10 Figure 14 count balances, 2011 The database includes 401(k) 401( partici k) L pants oan A across a wi mounts V de arran ied ge A of cr ag oss 401( e and tk) enur Par e tgro icip uan ps. At ye ts ar-end 2011, 51 percent Percentage of active 401(k) plan participants and Activity in 2011 Pe Arc ss en e ta tg A e o lloc f rec aetn ion tly hit re o E d pa qui rticit pia e ns ts V off a erre ie d a d W nd h ide oldin ly g Am como pan ng y s 40 toc1 k, (b ky) p P ala rticn ip a P na t r at gic e,1 ip 99 a8n –t 2s 011 1–10 by Participant Age, Tenure, Account Size, or Salary, Selected Years Recently Hired 401(k) Participants Now Hold 15,348 83,356 $5,477,984,783 $65,718 Figure 7 Tenure Composition of Selected 401(k) Account Balance Categories 1 Percentage of 401(k) Plans Offering Loans, by Plan Size, 2011 betw offer 16.7 percentages of or both (Figur 1.2 mi conso p GICs een lidatio llion ewww.dol.go (Octobe rcent $ an par 20, n of their multiple acco o d other Ratio of 401(k) 000 e 29). salary; therefo tficipant p r).articip an Av v / stable d ebsa/pdf/histo ailabl 401(k) Loan accou $40, ants e at 0 -v n 00, t had a ralue e, one would ts that www Accou h unts. ccount fun e m E ricaltables.pdf Balances as .B ici.org/pdf/p were d Among participants R e n s as dia t I/IC b Balance n multipl expect the ratio of account balance to sa aan inv accou lances I 401(k) D er15-02.pdf e estment n a acco great t b to Salary Percentage of ala u a en nce tabase r th option in their 50s or 60s with more than 30 ts and owne an was $ for Participants $ ,www.ebri.o in addition to t 100, d R 6by ,0 e 401(k) 0 presents Wide 200 single 0 in (Figu 2 rA in g/pdf/briefspdf/EBRI_IB_10- 0ccou 1r dividu 1 e in Their 20s, h lary to rise with salary. However, tax (Fi e ba 10 n g ). The t als. This ure se options. A Balances 16 variatio ). Lon years proce byg n Tenure er-ten lof tenure, the ternatively, d in ure account allo ured ws E ba 14 Blances RI per- 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 Information Technology and Researc Bala h Databases at E b nc y Plan Siz e to Equi et and Investment Opti y B F R FI iu gur . n Steven d e 9 s, by Bass Pa is Associate E rticipa ons nt Ag conomist at IC e I. This Issue Brief Aon Hew For data on 4 Distributio itt. 2 n011. of Equity 01(k) plan asse Nav Balance to Equity igati Fund A ngts, participants, and plans th llocations an e Path to 401(k) Retireme Funds, by d Participa plan nt: assets, th n 2t Exposure to 011 rough 2010, see Participant Age, Tenure, or Salary Universe by age, 2011 Equities Benchmarks U.S. Department ............................................. . Lincolnshire, of Labor, Employee Benefits IL: Aon Hewitt. 18 of pa Comparin rticipants wer g recently h e in ired par their 30s or ticipants 40s, in w 20 hile 11 12 with percen similar t of age partici grou pps ants were in 1998 also il in theilu r 20s strates that as and 10 percent set allocation were in their to 11–25 Non-Target-date A20 ge Asset 401( alloc k) Loan B ati14,063 on d al is anc trib es ut as ion a P 239,414 ofer 40 cent 1(k age of ) par 401( tic$14,896,588,825 ipa k)nt A ac ccount coun B a al t ba ancla es nc es $62,221 1996 2000 2002 2005 2007 2008 2009 2010 2011 Domestic Stock and Bo nd Market Indexes Figure Hewitt Associa Figure At year-end 20 About half of . 219, 43, 008 Rat Per b. National Compensation Surv c 11, on average i traditional IRA assets resu to of entage of 401(k es. 20 401(k Percentage 09b. ) A Tre ccount Balanc , participants in their 20s had n) Pl dsof participants w and Ex ans Offering Loans, lted from rollover pe e to S ey: Employee rience al in 40 ary ith for account by Plan 1( Participants in Their s Benefits in 74 percent of their 401(k) plan assets invest k) Plans from employer-spon Size, balances . Li Pri 2011 ncv olnshire, IL: ate In .................................................... 38 in specified ranges, 201 a 60s, s dustry i ored r by Tenure H ee n tirement plans. See Brady, Holden, witt Associat the United ....................... Ses LLC. Availa 1 ed in equities— tates, March 21 2008 ble at . Higher Concentrations in Balanced Funds Percentage of for Participants participants w With 401(k) Plan Loans, ith Percentage, 2011 account balances less a,by b than $10,000 at Plan Size, 201 year-end 1 2011 By Jack VanDerhei, EBRI; Percentage Sarah Hol S of participants w napshot of den,Cross- ICI; Luis Alons YSect ear-E ith account ind on of o, EBRI; a 401(k) A 401( balances nd k) ccount Steven c, Uni d in specified ranges, 2011 verse Balances Bass, ICI partici cent of average account balance incr and I partly r code contributi Cp I to partici e ants i 2009_No335_ flects ben gin to co p their on limits and nondiscriminatio the effects of ants 2 were 0 K-Update.pdf nsolida s ear in n eased 4 percent wi plans th partici ing te accou $8p 0,0 ant a at of n00 to t bal fe ga e, ten n rules, which aim r company a $1 nces for th the consolidati 00, ure, sala 000 in st ha di ock but ry, contributio d v a me iduals to ensure that employees o no sta n of their multiple a dian across data acc bnle-valu o behavior, unt b providers to provi e a lanc produ ccounts. Future joint research with this rol be lof of $ c overs from ot ts, whil all income ranges attain the 42,763, e th de a w e her more accurat hile t remainin plans, ass hose e g 24 are n eper- ing t was written with assistance 26–50 from the Instit Percentag ute’s research e of acco and unt bal editorances, ial staffs. Any v 2011 iews expressed in this report are Gr Security Admin oup istration 2012a and 2012 Equity Target-date B 10,572 al b. For total retireme anced Percentage Bon383,375 d of nt M participants, o assets, including those in 4 ney GICs$22,828,923,766 2011 /Stable- Compan 01( yk) plans, through the third $59,547 All 1998 1999 2000 18% for2001 401(k)18% P 2002 articipant 2003 17% s With Loans 2004 19%, by 2005 Par 18% ticipant 2006 Age, 18% T 2007 enure,21% 2008 2009 21% 2010 21% 2011 60s (Fi company stoc gure 5,k and upper pane equity l). funds t The median a ended tP og be ee (mi rc low en ad ta e -point, ge of r in 201 pa ha 1 th rlft a ican i b ipant ove a n s 1,n 998, d ha 20 wh lf 11 belo ile asset allocat w) of the participants in t ion to fixed-incom he 20 e 11 to equities, by age, percentage of participants, 2011 Ass Asset Allocatio et Allocation to Equiti n to Equity Funds............................................................................................... es 60s 93% ......... 18 December 2012 • No. 380 Figure 39 Month-end level, December 1996 to November a 2012 b Active 401(k) Plan Participants 9 20s 92% thro and Short 2010 . ugh equity 2Washin www.retireme 012b. Private funds, ; and Copeland gton, co DC: U.S. ntmadesimple Pensio mpann Pla y sto 2012. De b pa n c B k, rtment of r and th .org/Library/Hewitt_Researc ulletin,e equity po Abstract of Labor, Bure rtion o 2010 au o f Form balanced f f Labor Statistic h_Trends_in_401k_Highligh 5500 unds; participa Annu sal . Available Repon rts (V ts in their 30s d at ersion ts.pdf 1. ,0) o. Washingto n average, hn a ad , DC: 51–100 100% 401(k)8,231 plan participant 584,138 account balanc $32,986,462,264 es, 1996–2011 $56,470 . 2012. 2012 Universe Benchmarks Percentage of recently hired participants holding . Lincolnshire, IL: Aon Hewitt. more than cent of partici allocation, es feature will explore the longitu benefits of the A timate of g Ae ge GG rou roup $ p wit av 100,0 p h erage 401(k) plan, constrain thes ants drawals, loan Fun 0ds 0 accou were offered both had a Fn un median t activity, an bala d ds inal aspect nces accou F com per und d e s of this consolidation in more detail. n i high-income individuals’ ability t employer st ba p nany stock a divi lance dual. Funds cont of $35, nribu d st Fu 96 tion able-value pro nd 3. Amo s rates. Valn ue This g lo F ou save ng n d research ducts, in a er-te s in the pl n Sured to report cdditio kan. See Holden and VanDer parti n O exami to t tc he ipa rh ne ts in t n U es the relat base o nknoh w eir n ptions. 60 Tis with o ota nhei ship l 70% Percentage Non-T of Account arget- Balance Invested in Equity Funds those of the a 20s 60.8% uthors, and should 61.1% 60.5% 58 not .1%be 5 ascribed to A 3.c 9c % ount 4 S 9.6 i the o z% e, or4 S ffi 95% .al cers, 8% ary, trustees, or other S 45 el .4 ec %ted Y 40ear .0%s 3 spo 5.4%nsors of EBRI, 32.9% 32. EBRI-E 3% 30RF, .3% or 2 their 6.2% quarter of 2012, see Investment Company I 401(k) pl nan c stitute 2012. For haracteristica discussion of trends bet s by number of participants ween defined b : enefit (DB) and database securities te is nded to 45 years, the incre 3% sa aseme as in (Figure 2 39 0). 10 Recently . Because ol hired 40 der p1(k artic ) 88% ipants partici t p 88% e ants te nd to hav nde 88%e d la torger be less lik aaccount ely balances, asset to hold company s in Age 2% Percentage of Account Balance Invested in Equity Funds 40.5% c Figure Figure 20, 44, 4 Per 300 01c 17% (entage of Eligible k) Plan Assets Are Conc 401(k) Plan Participa entP rated ercenin E tage of quiti n A t e With 401(k) Plan Loans, c s c........................................................................ 22 ouna,b t Balance Invested in by Plan Size, Equities 2011 ............. 38 101–250 Average Asset A 7,225 llocation of 1,149,252 401(k) Account $59,870,272,596 s by Participant Age and $52,095 Among i Asset Allocatio 20sndividual partici n of 401(k) pants 12% , the al Plan Part locatio 11% icipa n of account nts Witho 10% u ba t Equity Funds lances to 11% equ 10% ....................................................... ities (equity f 10% unds, compa 13% ny 13% stock, and t 18 13% he 73 percent inv . 2www.bls.go U.S. De 010. “e 401 sted in equities; participants in their 40s h partm (k) Pla v/n ecs/ebs/benefit nt of n As Labor, set Allocation, Equit Employee s/2008/o y Target Account w Ben ner -date eship/private/ta fits Bala S date Balanced a ed nces, an curity Administration 69 percent invested in equities; pa ble02a.pdf d Loan Bond Activity i (November). n Mone 2009. y ” IGICs Available n rticipants in their 50s had vestment Com /Stable- at Compan pany Institute y 20s 32.8% 31.3% 11.2balanced fund assets, %Zero 7.4% 2.3% 1–20% selected years 3.9% >20%–80% 6.4% 1.9% >80% 2.8% 100% Where the world turns for the facts (Median Age: 45 Years) 84% on U.S. employee benefits. 15% $20, between 2001c for a complete discussion of EBRI/ICI 000 to acco $4unt 0,00balanc 0 iEBR n salar es a I/IC yn in I 401( d partici 2011, t k) database pant he s median findings an ’ age, in ten accou 2011 u d others re, v n and salary. s t ba . 2010 ’ research lance D wa O L F s $48, on the relationship orm 64 5500 3. For for long all 401( between contribution rates and er-tk enur ) plans ed participants in their staffs. Neither 30s 61.9% EBRI 62.3%nor EB 61.6R %I-ERF lobbies 60.0% 57 .or takes positi 2% 5b 3.3% ons 52.3% on specifi 47.6%c policy 43.6% prop 40 o.s 4als. EBRI invi % 37.4% t 3es comment 6.2% 33.6%on this 30.0% defined contribution (DC) plans, see Po 21 terba, Venti, and Wise 2007; Holden, Brady, and Hadley 2006; and Brady and Bogdan Age Gr G ou roup p ZeroZer1–10% o 1996 11–20% 1–20% 2000 21–30% 10% 31–40% 2002 >20–40% 41–5 2005 0% 51–60% >40 2007 –60% 61–70% 200871–80 >60–8 2009 % 0% 81–90% 2010 > 91–100% 80–100% 2011 a the stock (Fi database 251–500 gure are more conc 40) and tended entrated am not 37 to ho 3,341 ld oa hi ng tgh co he older ncen 1,183,366 4trat 01(k 11 ion of % ) partici the pir a account n $58,189,446,849 t groups bal . At anyear-en ce in compa d 2011 n $49,173 y, 60 stock (Figure percent ofs 41 10 30s$70,000 16% 20%Funds 16% 19% Funds18% 20% 20% Funds 20% Funds 23% Value 23% Stock 22% 35 Holden, Account bala Sarah 90% , and Steven nces are net oBass. 2012. f unpaid loan b Am aerica’s Com lances. mitment to Funds Retirement Security: Investor Attitudes and Actions. 13% 12% Invest All ment Options Among 401( 49.4% k) Plan Particip 6.9% ants With Tw 28.6% o or Fewer Y 15.0% ears of Tenure equity Barclays Ca portio pit n aof ba l U.S. A lance ggre d fu gate Bon nds ) varies d Indewidely arou x. San Francis nd the avera co, CA: Barc ge o lays Globa f 61 perclent Invfor all estors.partici pants in the 2011 Target Introduction 58 percent invested in equities; and participants in This system 30s-date Perspectiv www.dol.go 280fuof classification nds were avail 43.e 8% v 16, n /ebsa/PDF/201 o19 . 3., 4 does not consider the numbe a and % ble in E0pensionplan 72 per BRI Issue 7.9%cent of th Brie 79% their 60 bulletin.pdf 9. f, no. 0% e 40 350 s had 48 p 1 r of (k 3. ) p (November 0% distinct investment option lans e i rcent invested in e n t4. h)9% e year . Available at -end 7 2 .0011 % qs presented to a given particip www.ici.org/pdf/per16-03.pdf uities. data 2.5% base (Fi 2.g 6% ure 22). 100% These ant, and 60% Percentage of Account Balance Invested in Balanced Funds $65,454 Investm Asset Allocatio ent Option n to Esq uities .................................................................................................. Figure 16 ............. 22 60s ear salary. For an analysis of 401 40s 5 A nin 9 41 ll.8g m % o6 re than 0.6% $ 51 9.0 50 % (k) particip ,000, 58 the .8% 16% me ants’ contribution activity during the be 5di 5.9 an accou % 14%52.6n %t 16% bal 5a 2nce .0% 13% was $ 47.3% 292 12% ,59 43ar mar .1 6. % 16% k 4et of 2000 to 200 0.7% 15% 37.9% 14% 32, see Holden and 7.0% 3 14% 4.4% 31.4% 40s 501–1,000 20s 20s 67.1% 9.4% 22% 2.3% 2,145 121% .8% 1.5%2.3% 20% 1,493,790 2.3% 2.3% 22% 2.8% 22% 3 $76,859,874,228 .3% 5.3% 3.1% 22% 3 1.4% 9.626% % 3.2%$51,453 26% 6 81 .3% .9% 25% research. Fig 2010. Figure ure 45, 21, 4 Average Asset 01(k) Loan Ba Allocation of lances as a Perce 401(k) Accounts, ntage of 401(by Partic k) Accouipa nt Ba nt Age lances ................................................. for Participants With 401(k) 23 401(k) plan and 42). Plan Size b assets were held y Number of Parti by partici cipants p ants in th 15% eir 50s or 15% 60s, whilbe 13 pe 15% rcent we re held by par ticipants in t heir 20s Age Group 75% 36 . 2Washin 009. National Com gton, DC: Investme pensation Surv nt Compa ey: Employee Benefits in ny Institute (January). Availa Priv 1998 ate In ble at dustry in the United States, March 2009. a b database. Forty-one percent of participants had more tha Percentage of account balanc n 80 perce es,n 1998 and 2011 t of their account balances invested in equities, but rather the t plans o 40sffer www.ebri.org/ ed target-date fun y4 pes of options presented. Pre 5.5%pdf/briefspdf/EBRI_I 13.8 d% s to 68 perc 7.0% B ent of the participants in the _011-2 liminary rese 10 010_No350_4 .0% arch analy 3.5% 01k_Update-0 zing 1. 6.database. 4 million participants drawn fr 8% 9.pdf 8 A .2 % mong 3. partici 0% pants who om the 2000 2.2% wer 10e 0% 50s A 1,001–2,500 ge G 30rsoup 30s 50.4% 8.8% 17% 3.1% 1,726 217% .9% 2.8%3.6% 17% 2,694, 3 A .7% v3 er 991 .7% age 19% 4.6% 19% $144,785,840,676 5.2% 7.7% 5.0% 19% 5 2.5% 0.422% % 4.7%$53,724 $60,329 22% 11.3% 56.6% 22% Relations Over 50s the 57 .pas 6%h t three deca ip of Age a 58.8% 57 des .4% n , d Tenu 405 1(k 7.9) % plans re to Account 53 have grown .9% 51.2% to Balances 4 9 be .510 % the 4 mos 5.2% t wid 4e 2.s3 $61,346 p % read 3 pr 9.6ivate-s % 37e .8 ctor e % 3m 7.ployer-s 6% 34pons .4% ored 31.3% 22 Retirement and health benefits are at the heart of w Median 401(k) Account Balance Among Longer-Tenured orkers’, employers’, and our nation’s VanDer Distributio hei 200 80260 % n4c. For summary statistics on contribution of Participants’ Balanced Fund Allocations by Age activity in 2011, see The ................................................................ Vanguard Group 2012 and Aon Hewitt . 22 All Plans 20s 67.1% 4.2% 17.2% 11.5% 38 Investment options are grouped into eight broad categories. Equity funds consist of pooled investments primarily At year-end Age Group Plan Loans, 2011, 1.8 percent of the parti by Plan Size, 2011 >0–50 percent ................................................................................................ cipants in the database were >50–90 percent missing a birth 14% date entry, were younger tha >90 percent14% ..... 39 n 20, or or 30s (Figure 5, lower panel). 69% 50s Bloomberg Da Plan ta. A New York, NY: Bloomber ssets g L.P. 29 U.S. Gover For year-end 60s www.ic Washin nme 2010 data, se i.org/pdf/ppr_12_retir_sec_update.pdf gton, nt Accou DC: U.S. ntability Of e Holden et al. 2011. 9% Depafice. rtment of 1 9% 997. Labor, Bure “401 9% (k) Pe nsio au o 10% n Pla f Labor Statistic ns: L 10% oan Provisions s. Available 11% Enhanc at 12%e Partic13% ipation but M 13%ay 2,501–5,000 1 725 26% 2,549,808 $141,022,864,266 30s $58,351 $55,307 2 50s50% 20s 40s 3 40s 7.9% 44.0% 11 9.4% .9% 3.6% 30% 7. 3.2% 1% 4.0% 30% 4.112 % .5%28% 4.3% 4.8% 4.5% 524% .3% 1 6 $58,328 1. .0% 9 25% 6% .2% 5.7% 29% 9.1% 6 3.1% 1.3 26% % 3.4% 4.8% 24% 2. 12.9% 40% 1.3% $58,991 26% 100% while 11 percent held no equities at all at the end of 2011 (Figure 30). The EBRI/ICI 401(k 401(k) Plan Asset Allocatio offer ratio o ed target f participant -date ) database sug fun acco ds, 58 perc unt gests that the balanc ent hel e to dsheer number t salary is hem at year-end posit n, Account Balances, and Loan of in ively corre vestment 2011. 23% late Tar options presented does not influence participants. g d w et-dat ith age e fun an d a d te ssets represen nure. Participants in >5 ted –10 Y 20 ears percent their of 60seconomic security 5$60, 4.1% 000 55.5% 53.6. Fo % 5 unded in 1978, EBRI is 5.7% Participants, by Age and Salary, 2011 51.0% 49.5% 47.8% the most authoritative and objective source of 43.9% 40.4% 38.4% 38.7% 40.5% 36.8% 30 22 .8% retireme Prior to 2005, the U.S. Depar nt pla 20s 1–100 n in 30s the United Stat tment of Labor 42.4% es. In 2 84.9% 011, 50.4% Private Pensio 18.2% an estim Figure 23 ated n Plan Bulletin 5.3% 51 6.0% millio7.3% n America 15.4% updates reported a count of a 27.6% n 7.1% workers wer 5.6% e 16.0% ac 7.8% tive 4 ctive 401(k) plan 01(0.1% k) pl an Figure 2012. 22, Distribution of 401(k) Plans, Participants, and Assets, by Investment Options, 2011 ..................... 23 21% Balanced Funds $56,878 13% 26% Distribution of Participants’ Company Stock Allocations ........................................................................... 26 There is a Year-End 2011 Snapshot of 401(k) Plan Loan Activity invested in older than 69. They were not Tenure ( posi y stocks, including ear Per stive correl )centage of atio pln an included in this analysis. equity between ass mutual ets age an funds, d acco bank unt c bala ollective trusts, life insur nce among partici pant ance s covered by separate acco the unts, an 2011 database. d other 5,001–10,000 240 Established in 1978, the Employee Benefit $55,502 407 2,850,981 $178,142,390,009 $62,485 30s 50s 50s 44.6% 11.4% 4.6% 22% 3.9% 6.2% 20% 4.7% 22% 4.9% 7.0% 619% .0% 620.2% .1% 19% Tenu5 re .6% 25% 5 30 .2% .5 22% % 3.5% 20% 11.0% 24.7%21% Holden, 60swww.bls.go Affect Sarah Income Secur , Jack Va 31.8% v/ncs/ebs/benefit nDer 11ihei, Luis .ty for 0% So s/2009/o Alons me.” 6.8%Letter Report o, and Steven wner 15 ship/private/ta .0% , GAO-H Ba 6. ss. 2011. 1%E ble02a.pdf HS-98 “401(k 17. -5 0% (Oct ) Plan ober). Asset Allocatio 7.3 Was % hin 3.gton, DC: 1% n, Account Ba 2.0% U.S. Gov 10 lan e0% rn cment es, 70 30s % 2 <100 86.0% 8622 0.19153 7.6% 19.1532 6.4% 40s 44.0% 32% 6.9% 31.5% 17.6% On average, pa the assets of 60s All —havin 60.101–500 5% g h plans o a rticipants have d more 61 .0%ffer time 6ing 0.0% such fu to accumulat 10.4 distinct op 5 43.2% 8.7nds % in 5e 5their i as .3tions but, % 18.5% sets n5vestme —tende 1 .6%on average, choose only 2.5 (Hold nt lin 5 d to 1 5.5% .0% eu have ps. 46high .3% 15.2% er ratios, 42 .0% 5.7% whil 38.7e those % en and 36.2in t Va 6.7% %nDer hei 35 r 20s hei 2001b). In .5% had the 0.5% 33.0% lo2west 9.3% 100% information on these critical, complex issues. Participant Age Group partici 0–2 pants. By year-end 2011, 6% 401(k) pl 5%an assets ha 4% d grown 5% to repr7% esent 18 perc 6% ent of all 9% retirement assets, 7% 5% Figure participants that had bee 39 Suggested cit Average Asset Allocation of 401(k) Accounts, by Participant Age and Investment Options 46, >10,000 Few 401(k) Participants Ha ation: Jack 59%n ad VanDerh justed from the number of acti ei, Sd O ara 358h Holden, Lu utstanding Non-T 10,770,927 arget 401(k is Alon -ve ) Loans; Lo participants so, and Steven ans Te $679,735,615,735 that was actual Bass. “ nded to 4 Be Small, 01( ly reported in the Form 5500 f k) Plan Asset Allocation, 1996–2011 $63,108 59% .... 39 Account ilings Participa Activity in 2011 nts in 401(k) plans represent a wide range of job tenure experiences. In 2011, 38 percent of the participants in 60s 50.0% 5.0% 4.1% 4.8% 4.8% 5.5% 5.4% 4.2% 3.7% 2.4% 10.1% Brady, Peter. Examination pooled inv 40s estments. Similar 60 o s 201 f the 0. “Measur age com 16. ly, p ing Retir 2 osition o % bond fu 16% efmen acc nds 8to . 3% Resource unt balanc are 15% any pool Adequacy. 16% es 13 ed ac finds . $51,569 3%count that 51 13% ” Jour pri nal of percent m 25.1% 13% arily investe Pe nsion of parti 18% Economics an d in 16 cipants with . bo 5 16% %nds. Balanc 15% d account balanc Financ 20.6% ede f 16% u 9, nd no. 2 ses are of Holden, See Holden et al. 2008; Holden, VanDer Sarah 40s , Peter Brady, b and Michael H he 84.1% i, and Alonso 2009; adley. 2006.Figure 37 “401(k) Pla Holden, VanDerhei, and ns: 8.9% A 25-Year Ret rAlonso 2010; and Holden et al. 2011 ospective.” 7.0% Investment Company Availability and Use Asset Allocation of Recently of 401(k) Hired Participa Plan Loans by Plan Size nts ............................................................................... >30 Years ........ 27 40% 50s S&P 500 44.6% 8.5% 32.4% 14.5% 31total All and Loa Accountabi n 39. Acti 2% lity vity in Office. 1320 .3 Availa % 10.” ICI Resear ble at 7.100- 2% www.gao 500 ch 11 Perspectiv .gov/archive/1 .9% 6971 4. e 4% 17, n 0.15486 998/he98005. o. 10 10. , an 8% 15.4856 d EBRI Issue pdf8 .2% Brief 3.1% , no. 36 1. 6 (De 9% cem 10 be 0% r). 501–1,000 220 3 42.2% 17.5% 6.2% 14.2% a 5.4% 7.4% d 2.2% 4 Source: T >2–5 abulations from ER BRI esear /ICI Parch Institute (EBRI) is the only ticipa 15% nt-Directed 14% Retirement P 12% lan Data Coll14% ection Project.15% 15% 17% 18% 18% Figure 23 23, All Average Asset Allocation of 401(k) Account 64,141 23,983,398 s, by Participan$1,414,796,263,998 t Age and Investment Options $58,991 ............. 24 addition, the preliminary analy ratios (Figure At ye ar-end Salary Range 2011, 63 percent of balanced 17). In addition s, for is found that any given age a 20s401(k) mutual fu particip nnd as d ten Figure 20 30s ants are not n sets ure com were invested in equities (see Investme binati a40s on, the ive—that is, when given ratio of accou 50s nt n bala options, they do not nce to nt Company In 60s salary vstitute, aries Equity B Target $49,024 -date date balan-ondMoneyGICs and Other Company Balances, to exclude: (1) individuals eligible to participa amounting to 50s and All $3.2 Loan Activity i All trillio 49n. .4% 1 I 0n .n 8 an 2 % 3.7% 011. ongo ” E 3.2% ing Percentage of account balances, BRI 81.1% 4collaborative . Issue Br 5 te in a 401( %4.0% ief, 4.1% k) n e6 o ffort, th plan who had .0% . 380, an 5.0% e Em d 10.7% IC pl 5.4% not elected to 12.8% I Researc oyee B 2011 5.0% ene hfit Pe have their emp R rsp 5.1% 25 esearch I e .4 c% tive3.9% 18, nstitute 8.2% n loyers make o11.1% 4 . 9 0.6% (EBRI (Decemb ) aned th r e At year-end 50s 2011, 8.2 percent of the parti 12% cipants in the d 11% 12% atabase 10% were missing a date 10% 13%of hire entry a 12% n 11% d were not included in 11% the database had five or fewer years of tenure and 5 percent had more than 30 years of tenure (Figure 6). The median So urce:(April Tabulat ): io 23 n60s s f5– rom 2 62. EB R I/ICI P articipant-Directed 50.0% Retirement P lan Data Co 9.0% llection P roject. 28.4% 12.5% less than for data for ear pooled . 2 accou Institute R 010 $50, 60 $1 %a. 000 0, n“Employe 000 t lier years. s inves w esearch P ere ted e B in t in eh e nefits both s eir 2 rspecti 0 is or n tv ocks th e 30s 1 e U 2 an , no. nited d (Fibonds 2 g Stat ur (November). e 1 .e 1 They s). , Si March are milarly, 6 A 20 classified vailable 101 .” per N at e into c went of s www re two le. partici ase ici.org/pdf/p sub , Ju categ p ly ants 27 ories: , 20 er12-02.pdf with 10 target-dat acc . Avai ount balanc lable fun e at des s and >5–10 $47,004 24% Many Recently Hired 401(k) Participants Hold 23% 21% 22% 23% 23% 25% 27% 26% Fifty-nin Se ou1,001–5,000 perc rce: T 100 a ent of bulatio pl nan as s the from 4 Es B0 ets R1 I/I( Ck) pla I Pa41.2% rticipn as for nt-D i501- re cwhich ted R 1000 16.7% etire loan me nt P dat lan D 3481 a ata wer 6.1% Collee c 0.07733 tio ava n Pro ilable in jec12.8% t. 7.73281 th e 20 4.4% 11 EBRI/ICI 8.8% 401 (k) database 4.5% offered Not Year-En e: The and aly 2011 Sn sis includeapshot o s 401(k) plan f p 401(k) Pla articipants wn ith Lo twoan Activity c or fewer year ................................................................................. 28 s of tenure in the year indicat >20–30 ed and Y in ears a plan offering company stock By Jack VanDerhei, EBRI; Sa Asset Alloc Available ation by In at www.ici.org/pdf/ vestment Optio per17-10.pdf rah Holden, ICI; Luis Alonso and ns an www.ebri. d Age, Sala org/pdf/briefspdf/EBRI_IB_1 ry, an , EBRI; and Steven Bass, ICI d Plan Size 2-2011_No36 6_401(k)- 60s 5 77.0% 12.4% 10.6% c EBRI focus $20,000–$40,000 So urcees solel : Tabulatio ns fy ro on emplo m EBRI/ICI 401 $6,020 (k) y Paee rticip benefits research — no lobb ant-Direc$14,956 ted Retirement P lan D$39,062 ata Co llectio n Pro jec yting .$54,067 $45,519 or advocacy $48,643 . F Quarterly Supp divide their ass somewhat wit i a gure 4760s , 40 200 1( h e lementary Data k) Loan ts among all salary. For example, Activity V n). . Indeed, less than 1 p aried Acro 10% amon fundsg partici ss 401(k) Plan 9% e prcent ants in 10% of participants follo Partici their 8% p 20s, th ants ......................................................... 40 e ratio 8%wed a ten 11% 1/n ds t asset allocation o increase 10% slightly wit 9% strategy. h 9% salary for Age 80% Funds Tot401(k) al Plan Asset ced f sunds Ar28% e Concentrated Funds F in Equities unds Stable-Value Funds Stock Investment Co RoE w B per RI E So cent m urploye c ag ees : mpany I T e m abul B ay ene no atifit R o t add ns nstitut f et rs o o e m 100 arc e (I EB h per IR nCI) stit c I/ent ICut I P co be e I a c s raus tllect s ic ue B ipant e o annu rfief - ro D unding. i(IS rec al S ted R N data o P 08 erc e 87 t20s irent ? e13 m nage millio ent 7Xs ) P are is lapu n ns of do D bli a lla s ta r-w h 4 ed Ceight 01(k om lleont ced t) io hly av plan n P erages by ro the par jec. tE .t m icipants as ployee BGICs enefit a /Stable- R means to esearch Institute, contributions; this analysis. 2012). >10–20 and (2) nonves Tenure (y independent nonpr ears) ted former employees who had no 27% Equity 26%ofit, nonpartisan Target-date 26% Non-Target-date 26% t (at the time the Form 5500s were sub 26% Bonds 26% Money 29% m29% itted) incurre Company 29% d the tenure at t Note:h Te he current median accou employer was nt balance at year-en ei d ght 2011 years in was $16,649. 42 2011. as an investment option. a greater non–tar than 30 get-da % >5,000 $t100, e ba 00 lance 0 wd e re fu nds. A tar in th 37.6% eir 50s or get-date 60s. 10.6% $43,215 fun The d posi purstive correl ues a lon 8.0% ga-t tio e10.7% rn m investment betwe en3.9% age an strategy, d acco 12.8% usin unt bala g a mix nce 11.7% of is e asset x pected U.S. Interna www.bls.go All l 99.9 aRevenu P v/n lan As e S ews.release/a ervi se cts e. 1981. “Not -- rchives/ebs2_ 1001- 84.5% ice of Pro 500007272010.htm posed 9054 Rule Making, Certain 0.20113 8.2% 20.1128 Cash or Deferred A 7.3% rrangements Under a plan loa a n provision to participants (Figure 43). The loan feature was more commonly associated with large plans (as b The analysis includes the 24.0 millio n participants in the year-end 201 1 EB RI/ICI database. Figure 24, Update.pdf Average Asset Allocation of 401(k) Acco High Concentrations in Target-Date Funds unts, b by Participant Salary and Investment ...................... 24 A t110 arget 0 Tenur -dat 13t Equi >$40,000–$60,000 h e te ( S fiEBRI es und t.y N ear inc tW ypic ls ude eq , stand )S ally uite rebalan ui 8ts 78, y falone in em unds W ces ashi , it cs o ngt po mon, pany rtfo $13,062 D lio pl s C t toyee ,o o 2 c bec 00 k, and 05 om ben -405 t ehe equi les 1, efits sat f$28,854 o $3 c ty us rese po 00 ed rp to ier oar nn g yo ch rear o f w bal ta or h a s an nc i s $61,932 an d ied f nc mo linde u >10–20 unds re de fo d c pend .as us Y un ed pa ears ds rt oe n of ”n inc $88,243 it, nc a o m nonprofit, and no lude m ember e as m ut itsh app ual ip f ro su unds abs c$81,923 cri , bank hes ption. npa and P pa rtisan e srio ses di- the Availability and Use of 401(k) Plan Loans by Plan Size ............................................................................ 28 Group 40 >20–30 1998 2011 0–2 1998 $41,156 25% 2011 2011 26%66.3% 25% 2011 24% 1998 3.6% 2011 24% 1998 18.4% 25% 2011 27% 199811.8%2011 26% 1998 26% 2011 As discussed Deloitte/ICI De low-to-moder * Asset 50% s a do ate salary fined Contributi b nove, asset a ot add to the gro totalu l blps ecau o on/401(k) Fee Study 201 cation vari (Fi se of g ure 18). However, rouFunds nding es . with Funds partici 1 dat at hig pan at ag indicate that Balanced Funds h salary e. Thus, levels the Figure in 2010, the m Funds 23 pr ratio t esents an eFunds e nds to dian numb declin analys Value Funds er e somew of investment is of asset a hat. Stock llo A options cation break in servic Brady, Peter, accurately por be period established by their p tand Mich ray how thes 13.0%30% ael Bogdan. 2010 e participants manage their . “A Look at lan (see U.S. Depa P 401(k) accou rivate-Sector rtment of Labor, Employe n 2006 tRetirem s. ent Pl ean Income Af Benefits Security Administration ter ERISA.” Holden, For year-end Sarah All 180 , Kevin 2010 data, se Pierce,e Holden et al. 2011. and Kim 39.2%b erly Burham. 13.3% 2012. “Dee $39,8857.2% med Dis 11.9% tribution of DC 4.4% Plan Loans.” 10.8% Presented at 8.2% the Ro w percentages may not add to 1 00 percent because of ro unding. Figu >re 2–5 Y 33 ears 32 because classes, or asset allocation, that the targe cal t d sEmployee Plans.” a p youn c tos e oo lltec a f100.1 ge th tiger e vra e t fun te rus d workers ar P pai , w tar shi d , lti c iifn h c e i i iW s pants ns F u a su e ur sh der e like a anc in ll- gto y -a e s inc l R n, l epar lu y to D e de C gis fund provid d a , tiand n hav e ac t> er th5000 e a ce 46, fddi o und’ low unt tio no. s s nal e ,nam er and any r m 217, incom ad e ail . justs to b ing 16888 Nov po o es and to o ffilce ed i embe s. nv P e 0.37516 es O com r S t 10, m T hav MAS ent e less fo 1 pr eT ha 9 o ER 8 duc 37.5156 1d l : : 5 S tcuse e end pr 5 ss tim im 544 ad ar d on g idr l–5 y ies e nv to acc 554 s es r cow ha ted i 9. nge th and n t us mula he s to: ec EBRI te a more urit I y sbala su fo ecuse Br nce ief,d w 11 on ith the 00 ir organization committed exclusively to data measu >30 red0–2 byorga the nu nization. mber of It analyzes a p 13% articipa 27% nts in th 16% nd rep 24% e p olrt an 15% s )re . N 27% sea inerty ch 17% -three data 23% perc without 17% ent of plans 21%spin o 18% a 25% r unde with more than rlying 22% 19% agend 19% 10,000 partic 19% a. All fin 21% d 19% ing ips ants , F 24igure 48, 401(k) Loan >2–5 Balances ............................................................................................................... 40 56.7% 5.4% 30 24.0% 13.9% Investment Options, All Ages Other rese >$60,000–$80,000 arch suggests th 401( at most 401(k) k) plan ave Percentage of recently hired 401(k) participants $26,598 rag c e as participants do not make active change set allocat$50,313 ion, percentage of $105,389 total assets,s to select $142,629 their asset allocations during any ed years $137,117 $40,000 $37,323 >5–10 Years Note: "Equity funds” include mutual funds, bank co llective trusts, life insurance separate acco unts, and any po o led investment product offered among similar patt The positive correlation between tenure a c 401(k) Pla 60% Age Group ern n Lo occurs amon the 525 plans i an Activity g Var npartici the sur ies wit pv ants h >0–50 percent ey w Pan in th rticipan a d account bal s 14 (see Del eir t A 60s ge, (Fi a Tenure, Account o g nce is itte ure 19). Consultin expected because long 40s >50–90 percent g LLP Balance, and Inve and stment -term employe Salary Company Institute 20 ...................... >90 percent es have had m 28 11). Plan ore time AL by inv L 13t estment Plans With h St. NW, options Sou uite t C 878, omp and a Wan ashi y S lnso by gttock, on, Dpartici GICs C, 200/Stab 05 pants’ a -405 le-Va 1. Cg lue F oe. S pyright und ala 20 ry s12 informatio by Employee n is availa B enefit Reble sea fo rch r a su Institutbset of e. All right participants s reserved. No. in t 380. h e GI 53% Cs arie ndi Investmen guar cat ant ed. eed11 invt es C tm oent mpany Institute Research contracts. Perspective 16, no. 2 (November). Available at 36% 2008a an . 220 National 010 d 200 % b. 34% National Compensation Surv 8b for further Tax Association 10 detail). This change in metho 5th Anney: Employee uAT A GLAN al Conferenc dBenefits in e ology on T results in a dramatic in axation PrivCE (Novem ate Industry i ber). crease in the n n the United S utmber of individuals ates, March 2010. Figure 41 9.2% Account >2–5 Size 100 Participants-- 24% Asset 25% Alloca25% tion Dis 21% tributi 22% on of P 26% articip23% ant Acc 20% ount B 21% alance to Figure current income over 25, employer. In Average Asset time. >5–10 Non–tar additio Allocation of 401(k) Acco n g, they et-date are les balans 46.8% c likely to ed fund unts, s in hav cle by Pla ude rollo asset allo vers n 6.9% Size a from n cation or d I a b, cn previous vestment 30.9% hybri employer d Options funds,’s in ...................... 15.5% pladdition an in thei to li r curr fest 25 ent yle plan Holden, Equity, bond, money, and/or Sarah 160wheth , Jack Va er on fi nDer nan hei, Luis cial data, Alons option o, and Crai s, or tre g C nds, opelan 28% are reve d. 2008. “401(k) Pla aling and reliable n Asset Allocatio — the reaso nn , Account EBRI informatio n is included a 40% loa prim n provision, arily invested co in equi 7.9% mpared w ties. In additioith n, 403 1 (4 k percent ) participants of ma pl y hoans with ld equities t 1 hro0 u or gh bala fe nwer ced f partic unds o r cipants. Partici o mpany sto ck ?see F pa igure nt loan 30 activity 41 d 20s >$80,000–$100,000 $42,763 40.1% $79,963 Figure 2 $156,990 13.7% $203,917 46.2% $199,368 given year. For example, an ICI survey of recordkeepers co holding the type of fund indicated, vering nearly 24 million 2011 DC plan participant accounts found that 7.5% 20s No t 66. all part b 9%1–100 icipant 28. 41.8% s 3% are o ff7. ered 4% this inv 51. es 3% tment o40. ptio 2% n. S20.4% ee Figure 11. 22 0% .4.0% 5.1% 7.7%18.6% 4.0%8.0% 1.8% 3.7% 2.0% 10. 5% 4.5% dissemination, research, and education on C to accumulate an account bal o In the pyright Inf datab Particia pant se, there has ormation: s include the 24. This re been a downward trend in 40 ance. However 0 millio port n 401is (k)copyright pl , a rollover from a previous e an participant ed by the Em s i1(k) n the y plan participants’ holdings of ear-end ployem e Be ployer’s EB >2–5 nef RI/IY C it R eIars plan 401 e(se k)could interfere with this positi d arch Institut atabas and conce e. e n (EBRI tration in company ) and byve the 201 Sponsor Council of America 2012 indicates th 1 EB <$10,000 RI/ICI 401(k) databa12% se. Because 11% asset allocatio at in 2011, the 11% n av is i 12% erage n nfluence umb d 11% by t er of investment fund he invest 12% ment o 16% p options available for tions availabl 16% e to 15% Year-End 2011 Snapshot of 401(k) Participants’ Account B balanced funds 12 New 401(k) Participants Tend Not to Hold alances reported as active participants in 401(k) This report Average Loan > www.ici 5–10 is fan u o r thBalances e. dis pdat org tribut /pdf/per16-02.pdf ei of o n o ......................................................................................................... fEBRI an 401 (k) accod IC un 23% 45.6% t plan bal I’s anc ongoi s; in 2004, the es t21% o equi 18.0% ng research into ties. 23%number of acti 19% 6.5% 401(k) plan ve part 18% 17.8% partic icipants 24% ipants’ activity through increased to 53.1 million (new 6.7% 20% 19% ............... 28 year 20%-end U.S. Joint Co Washin mmittee on Ta 100 gton, >10–20 Plans DC: U.S. -- xation. Depa2006. rtment of 5.6% sum Techn 37.8% Labor, Bure ical Ex45016 planation o au of Labor Statistic 8.9% f H.R. 4, the s. Available “Pension Protect 35.7% at 17.5% ion Act of 2006” as 30s the gold standard for privat47.7% e analysts and decision make 12.8% rs, government policym 39.5% akers, the media, and Company Stock in 401(k) Plans With Company Stock, by Participant Age Figure funds. accounts. 49, Balances, Co 48% 401(k) Loan Amo mpanand y st o Loan Activity i ck is eq unts V uity i D aried Ac in n st 2 th ri007. b e uplan’s ti ross 401(k) Pa ” oInve n o sfp 40 stment Compa ons 1(k) P or (th rticipants Ye le a an r em s,n Par ploye y Institute ............................................................. Barc tirci ). lay pMo an s Capital R ts, ney fu esearch andnds Asset Perspective consist o s f those 14, no. 3, fundan 41 s designe d EBRI d >$100,000 $35,963 $104,349 $240,603 $300,150 $292,591 varied 30s Note:67. modes “ Funds 8%101–500 ” inc t 35. ly by lud 4% 44.3% e m plan ut8. ual 0% s funds ize, 41. , bank ranging from 9% co llec 34. tive0% trus 1920.8% ts4.2% percent , life ins 7.u 9% ranc of e partic s5.0% eparat 5.1% e ipants acco9. unt 7%18.6% with s, andloans out a 4. n1% y poo7.4% le2. d is 4% ntanding in v estment 3.2% pro 4 duc 01 t (k 2. pr 8% ) plans im arily inv 9. wit e 4% sth ed 2 in63. to 5% No te: Row percentages may no t add to percent because of rounding. 10.5 percent of DC plan participants cha $10,000–$20,000 140 26% n23% ged the asset alloca 22% tion of their account balances in 2011 a 26% 2011 25% 26% 28% nd 7.7 percent changed 29% 30% Equity, bond, money, and/or 6 3.3% Investment Company Institute (ICI). It may High be Con use cen d with tratiout permission but citatio ons in Company Stock n of the source is required. correlati Holden, participant contributions was 19 among the stock. In the wake of the collapse of Enron in 40% 10 on because a rollover could give Sarah % > 40s 10–20 , and Da >20–30niel Schrass. 2012. 15% a sh 46.0% 840 plans s “Defined 35.9% o 2001, participan rt- 14% tenured emplo Cont u16% rveyed. Aon Hewitt 2012 indicates an a ribution ts’ aware yee a high a 11.4% 13% Plan n13.1% es Participants’ Ac s of the need t 13% cco 0–2 unt bala Years 36.5% 17% nce. There is some discernible evidence tivities, o diversify may 16% verage 2011. 16.3% 40.9% 14% number of 20 ” have increase ICI Resear 15%chd and partici pants, Figure 24 401(k) Plan presents asset alloc Assets a Percentage of Account Balance Invested in Balanced Funds tion by salary20s range a 2.7% nd by U.S. Aggregate investment options. Participant asset allo a,b cation 2011. The re100 port is Pl ans divi-ded - P into ercentfour age s of 19 e pla cti 99ns, onspar 20 : the 02 ticipant firs 20t s, 07 des and c20 rib asse 08 est the s 20 by09 number EBRI/ICI 2.3% 201 of 0 4 plan 020 1 ( 1 par k) d 1 tici apant tabas s, e 201 ; th 1e second pre 13sents a Figure method) from 44.4 million (old method; see 26, www.bls.go Passed $30, 30 Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. Asset Allocatio %000 the by the publi v/n economic security and employee benefits c House on J cs/ebs/benefit . n Distribution of 401(k uly 28, s/2010/o 2006, U.S. Department of w an ner ) A d ship/private/ta cco as unt Consid Balance to Labor, Employee Benefits Security Ad ereble02a.pdf d by the Equity Funds, . Se nate on 2.0% Aug by Participant ust 3, 2006 ministration 2008b and Age . JCX-38 .......... -06 27 (August Refer the se ecnces urity indic ............................................................................................................................... ated. c 1.7% ............... 43 Percentage of Participants, 2011 to maintain 40s >$20,000–$30,000 64.5%501–1,000 a 38. stable shar 6% 43.9% 9.7% e price. Sta 26% 34.4% ble 27. 25% -va 9% lue 19.9% products, 22% 6.5% such as 5.9% 27% 5.9% gu11. aranteed 26% 4%18.2% 30s 5.1% inv 26%7.5% e2. stment contracts 5% 28% 4.4% 4. 29% 5% (GICs) 8. 0% 30% and 3. 9% balanced funds; and GICs Issue Brief, no. 324 and/or (December). Available at www.ici.org/pdf/per14-03.pdf EBRI/ICI d and 100 participa a nts to 24 percent of participants in 401(k) plans with 10 or fewer participants (Figure 44). Loan ratios—the 50s Percentage of recen 43.3% tly hired participants offered 13.3% Bond Index company stock 1998–2011 43.4% the asset allocation of their contribution >20–30 >30 11% s during 2011 (see 40.6% 10% 11% Holden and Sc 12.7% 9% hrass 2012). C 8% 33.3% 12%overing a year 11% 13.4% earlier, the ICI survey 9% 10% Year-End 2011 Snapshot of 401(k) Account balances are based on administrative records and cover the account balance at the 401(k) plan participant's current emp Participants’ Asset Allocation loyer. Retirement Brady, Peter, Sarah Holden, and Erin Short. 2010. “The U.S. Retirement Market, 2009.” Investment Company Institute of rollover assets among the p Factors That Affect 4 some plan sponsors changed ? The bulk of Report 120 (A Age Group pril). 401(k) assets conti Available at 01(k) Participants’ plan design (se articipants The Em www.ici.org/pdf/ >0–50 percent with account balan plo e VanDerhei 20 nued to be invest yee Benefi ppr_12_rec_survey-q4.pdf Account Balances t Research Institut 02). ces greater tha In addition, some of this movement ma >50–90 percent ed in stocks. en $100,000, (EBRI) was founded in 1978. Its On av as 0– 1 percent of them had two or fewer 2 Y erage, at y >90 percent ears ey be the result ar-end 2011, mission is to of also varies Asset A investment options in 2011. A lloc with a pl tion of Recently Hi an size (Fig oure 25 n Hewitt 2011 , top pane red Partici reports an ave l), but much of the variation pants rag 2% e number o f 19 investmen can be explained t options in 2010. Hewitt Ass by differences in the ociates 42% 14 Figure 2010b). As the U.S. Department of Labor notes: “In a purel There is a snapshot of 50s >$30,000–$40,000 60. 50, 5% l Loa so a participant 35. n positive correlation between account s From 0% 11. acco 401(k 3% unt 25% 31. ) Plans Tended 2% balanc25. es a 25% 4% t year-end 2 to be 23% 5. Small.......................................................................... 7% bala Per0 c11; t y e n ec n cte an 26% a 6. onomic sense and for rese g h 6% ee t o d t fhird l 30s A e 14. c nur c26% 7% o ooks at partic u e namong t B5. al9% anc 26% partici e In 2.ivp 7% e arch purposes, individuals in t ants’ sptants in ed28% 6. iasset al n7% Co th me 2011 data locations, incl 7. 28% 8% Stock... 41 6. base. 5% 29% udin h A ese 3. g 6% other stable-value funds 3). 1001–5,000 Washingto 45.5% n, DC: U.S. Joint Committee 19.0% on Taxation.6.9% Available at 17.3% www.6.1% jct.gov/ x-38-06.pdf 60s savings held in plans at previous employers or rolled over into IRAs are not included. Account balances are net of loan balan 41.1% 39.5% 14.0% 8.9% 12.6% 9.9% 2.6% ces. 47.9% 18.4% 41% Figure 31 Endnotes other swww.ebri.org/ table-v ...................................................................................................................... alue y pdf/briefspdf/EBRI_I funds, are reported as on B_12a-2 e cat 008.pdf egory. The other category is the resi .......................... 48 dual for other 2010 investments, >30 Salar 7% 8% 10% 8% 7% 9% 9% 7% 7% amount of 40% the loan outstanding divided by the remaining account balance—vary only slightly when participants are Recommended Citation: Jack Van contribute to Derhei, Sara 60s , to encourag h Holden, Luis A e, and to enhanc lonso, and Steve e the developmen n Bass, “4 t of sound empl 01(k) Plan Asset Al oyee ben location, efit of recordkeepers covering nea 0% 20 b% 20s rly 24 million DC plan participan 11.6% t accounts fo 10.2%und that 10.3 percent of DC plan participan 78.2% ts >$40,000–$50,000 25% 24% 25% 23% 25% 26% 25% 27% 27% 27% Figure At year- Equity, bond, money, and/or 27, Fun end Asset Allocatio d 2 amenta 011, 3 39% ls 9 perce 19, 32% n no. D nt of istribution 3 (Ma 401(k y). Availa ) of pl 4 an pa 01(k blerticip ) a Partici t www antp s.’ a a ici.org/ nccount t Account pdf/fm-v19n3.pdf ba Bal lances w ance to as inv Equity ested i Funds, n equ by Par ity fun ticipant ds, on 60s av erage, years of tenure Comp regulations put in place by the 2009b indicate 60s .20% 2 aring 50. 61 percent of 011 0% All>5,000 Longer-tenured participants are used in this analysis to capture the longest possible work and savings history (see note a). T snap a. 29. s an a National Compensation Surv , and 5 percent 48.8% 9% shots of verage n 401(k) partic 12.1% newly u Pension Protection Act of 2006 ( 27. of them had b mber of 20 in hi 2% red 4 ipants’ 22. 01( 1% 43.9% k) plan vestment options in ey: Employee assets was inv etween two and five years of 13.7% partic 5.1% ipBenefits in ants’ 8.2% ested 8. PPA), which limited the length of time participants could 2009. Del 7% asset al in equity sec Pri 19. 13.3% 1%17.5% locations provi v otenure (see Figure 12). ate In itte Consultin 7.8% dustry i urities thr5.8% 3.g 3% dn LLP es f the United ou ug , Inter 13. rther h equity funds, th 3% he tenure variable tends n ins at 42.8% S ional Foundation of ight 10. tates, March 5% into r5. ecen 7% e equity 2011 t be 3.. 3% investment o Age Gro pu tions offered p Zeroby plan1–10% sponsors. For exampl 11–20% Figur e, 21–30% the percent e 22 31–40% age of plan as 41–50% sets invested i 16% 51–60% n compa 61–70% ny stock 71–80% 81–90% 91–100% analysis of EBRI explo 401(k) partici res the breadth of emplo pants’ use of target-date, or yee ben lifecycle, f 19% efits and related issues. unds; and the fourth focuses on participants’ 4 15 01(k) groups should participant’s t 100 e not be included in the count of nure wit 23.8h % an employer serves as a active part proxy icipants.” However for the length of time , the form schedule needed to a worker has participated make the Form in t 5500 he 401(k) In any given year, the cha $20,000–$40,000 nge in a participant’s accou 60.2% nt balanc6.6% e is the sum of th 23.5% ree factors: 9.8% Who we are Account 37% Size c such as real estate funds. The final category, unknown, consists of assets that could not be identified. to be years with the current employer rather than years of participation in the 401(k) plan. Particularly among older participa 30s 23.2 A % sset A Rus programs and so sell 2000 llo 16.8% cati Index on Di und public policy stribution of 401(k) Parti through objective 10.4% resear cipch and ant 72.7% educati nts, job tenure may not on. EBRI is the only group>$50,000–$60,000 ed based on the size of the 24% ir 401(k 24% ) plans (as 22% measured 24%by the 25% number of24% plan participa 25% nts). Among 26% parti 26% cipants Account Ba balanced funds; and company stock $20,lan 000 ces, and Loan Activity in 32.4% 2011,” EB 16.1% RI Issue Brie11% f, 4.2% no. 380, and 13.6% ICI Research 8.7% Perspective, Vol. 18, 19.7% no. 9, changed the Holden, Sarah as, and Jack set allocation of their a VanDerhei. 2001a ccount balances in 20 . “401(k) Pla 18%n 10 and 8.0 per Asset Allocatio 2007 cent n, Account changed t Bal he asset allocation of their ances, and Loan Activity i 5% n 1999.” All 64.8% 20sAll 45.6% 35.0% 9.6 1% 5.8% 35.7% 28 2..9 7 % 28. % 9%18.0% 5.0 6. %8%6.5% 3 5. .9 7% % 12.5%17.8% 3.2% 4.9%6.7% 2.5 6% . 0% 4.6% 2.3% 5.6% 1 8. .0 6% % 3.7% 0.7% 0.5% 3.8% 23 The Institute seeks to advance the public’s, 40s compare Utkus, Steph required to hold company stock contribute portion Washin Age, Tenure, or d wit eh n P., a gton, 4 of bal 2 perce n DC: U.S. adnced funds Jean nSalary t at A. You year- De ......................................................................................................... pa , end rtment of and company ng. 2 20 d to their accounts by their emp 010, 10. Labor, Bure 41 Resilie pe stock rcent nce. at year in Vo a Thirty- u oflatile Labor Statistic -e four percent nd Mar 2009, k loyer; spec ets: 40 3s 7. Available was in fi 1(k perce ified rules regarding the notification of ) Pnarticipant t at ye xed-i at n ar-e come Bn ed h 20 asecuri vior Se 08, ........ 28 48 ties ptember pe such as rcent at rises with investment a Employee Benefit Plans, and t pl reflect length of participation in the 401(k) plan; the regulations for the 401(k) plan were introduced about 31 years ago. an lEBRI lo size, cations. Bala >$40,000–$60,000 studie in part, s the worl nced fu because few small plans o he Internationa nds, d of health and retirement ben which i 47.7% l Society of Certif nclude lif ffe es red com tyle an ied Employee 9.1% p d tar any efit g stock as an i s et-date Benefit Specialists 2012 report that the aver — issue 31.3% funds s such a nv , have estment opti s increas 4011.9% 1(k)s, on. For ed IRAs, retire in popularit example, y ment age <$10,000 39% 39% 37% 35% 36% 39% 39% 35% 37% plan. adjustment is no longer required. Using Na loan activity. IndeeDist d, 62 rib percent ution o off 401( participants k) Plan tional Compensation Survey with s, Part account icipan balanc ts, anes of d Asset le data ss than $ s, b and historical relation y In 10, vest 000 men had five t Opships and trends evid t or ionfew s, 2011 er years of tenur ent in e, Holden, >$60,000–$70,000 Sarah, Jack VanDerhei, a 23% nprivat d Carol 24% e, nonprof Quick. 2000. “ it22% , nonpartisan 401(k) Pla 23% , Washington, DC-b n As 24% set Allocation, ased organi 23% Account zat 25% ion com Bala mnces, an itted exclusivel 25% d Loa 25% y n to Equity, bond, money, and/or 10% 40s c 18.4% 10.3% 71.2% 25 Age Group >0–50 percent >50–90 percent >90 percent 80 Account Balance to Balanced Funds, by Age d 50s in p Choi, James J. lans Plans With with 30s 1, David Laibso 00 or GIC f se /Stab wer 52.5 p l% e-Val articipants, t n, Bri ue Fun g1 itte 3.6 ds C. % hMadrian, e loan 9 ratio .1% an w d Andre as 17 6. per 3 w % Metr cent ic k. 20 of the 4 .5% 01. rema “Defi ini 4 n ng assets i .ed Contri 2% buti n 2 2 .5011, on Pe % wh nsions: ile1 in .5% Plan plans 1.0% 0.8% 4.1% Decem Because 40 ber 20 Investment Co 2Dec 1 1 1 .( -3 92 6k) % . Jun- plans were intro 97 Dec-97 Jmpany I un-98 Dec-98 Jun-99n Decstitut -99d Jun- uced abo 00 Dec e Pers -00 Jun-01 Du pective ec-0t 31 years 1 Jun-02 Dec-0 27, Jun-03no. 1 (Jan Dec ag -03o Jun- , o 04 Dlec der and longer- -04 Jun- u0ary), 5 Dec-051 J. un- 3% an 06 Decd -06E Jut nB enured e -07R D1. eI c-04 Issue Br 7% Jun-08 Dem c-08plo Jun-0ief 9y Deees wo c, -0 no. 9 Jun-10 De2 c-1uld no 30 (Feb 0 Jun-11 Dec-1t have 1 Jur n-1u 2 Dec ary). -12 contributions during 2010 (se >$60,000–$80,000 e Holden and Schrass 2012). Ut 40.9% kus and You 10.4% ng 2010 report 35.3%ed that 13 perc Share of 13.4% Parti ent of DC plan cipant's 1% PLANS WITHOUT incom COMe PA ade NY S qT uacy, OCK, GI co Cs, nsu OR OT mer-drive HER S n T bA enefits, BLE-VAL Socia UE FUNDS l Security, tax treatment of both retirement and health year-end $10, 2007, and 40 000–$20,000percent at year- 32%end 20 32% 02 (Figure 31% 20). Altogethe 29% 30% r, equity secur 33% ities—equ 31% ity f 28% unds, th 30% e equity blackout periods; and required among number of f ?balanced funds, company stock; >$70,000–$80,000 0% Ne stable-valu 200 www.bls.go 40w contr 1(k 7– un)d Decem partic s offered by t ibuti ev/n iipants. b n ons er 2 cs/ebs/benefit vestm by th 00 h Recently 9 e e 338 401(k) 26% quarterly st . V nts e a par lle and bond and public y Forge, PA: ts/2011/o hir icipant 23% ed partic poli ate plan sponsors respon or mcw y r ents that mu ner em T eipants s money funds. 22% ship/private/ta ployer or earch he Vanguard iand n st include a notice highli 25% bot 011 22% edu ding to that question in te hcat Group, ble02a.pdf ; nde ion on d 23% to be mor Vaecon ngu oard C mi22% c s ghting the importance of diversification e lik eecuri nter their survey w ely to ty for a 24% nd em hold bal Retirplo ement aa s 18 in 201 y24% nced fu ee b Reenefi search nds t is 1. 24% sues. fewer than 20s 1 percent of participants in sm 36.3% all plans (100 participants or 14.7% fewer) were offered compa 49.0% ny stock as an 50s Number 18.2% of Plan 9.9% 71.8% the Form 5500 data, EBRI and ICI estimate the number while 77 Activity in percent of 1998.” partic the media’ Iipa nvestmen nts with s and policymaker t Company account ba Ins lances titute P of a gr s’ knowledge eater t c etive rspect 401(k) participants to be hive an $1 9, a, 00,0 no. 5 (J b 00 had m anuary), o about 51 million in 2011 an re than and EBRI Issue 10 years of te Brief nure , no (Figure . 21 d the 8 40s 48.2% 14.9% 9.6% 4.0% 6.9% 4.8% 4.1%3.9% 2.7% 1.7% 1.3% 1.0% 4.8% Inves 1–100 tment Options Offered by 43.9% Plan 13.8% P7.9% lans 9.1%P articipant 5.1% s Ac count 16.4% Balan A cs e set Hel s d in c with more th Sources: Bl an 10,000 >$80,000–$100,000 oomberg, parti Barclay 31cipants, th s Global Investors, Fr e loPer an ratio 34.9% ank Russell Company centage of was 13 percent , Par and Standard tic 11.2% ipants & (Fi Poor' g ,sure . 2011 45).39.2% 14.8% Fig 20sure >$80,000–$90,000 77. 28, Rules, P 8% Per 28. centag articipant Decisions, 7% e7. of 8% 40123% 55. (k) Pl 9%an and t Parti 50. P 23% articipants 1% hce ipants Path 21% of Least R Witho 5.8% ut Equ 21% 7. esistance.” 7% ity Fund 9.2% 23% Balan NBER Workin 4.c 9% es21% Wh 2.o Have Eq 5% g Pape 23% r, no. 865 uity Expos 23% 5 (D ure, ecemb 23% e r). participants traded in their retirement accoun participated in 401(k) plans for their enti Available > 30s $20, benefits, 000–$30, at www.ici.org/pdf/ 000 cost manageper07-01.pdf 28% ment re careers. The Re 40.9% , worker a ts in 2009, ana 28% and nd www.ebri. 28% employe venue Act of 1 lyzing the plan 25% org/pdf/briefspdf/0201ib.pdf r attitude 12.6% 978 cont s administered 26% s, policy reform p ained 29%a provision that became Inter by Va 27% nguard. A ropo46.5% sals, 25% nalyzing 2 and p 27% en 011 sion nal data, assets and GICs 20% and/or other stable-value <100 Participants EBRI’s member 100–500 ship includes a 501–1,000 cross-section of pension funds; businesses; trade associations 1,001–5,000 >5,000 ; 24 60s 17.6% 8.9% 73.5% (see U.S. Joint portion o (March f0% bala a ) Committee on nced fu . Availands, ble at and com Taxation 2006). https://institutional.va pany stock—represented 61 nguard.com/iam/pdf/CRRR percent of 40 ES.pdf 1(k) plan participants’ assets at year-end investment o compare $10, d wit 000 phtion, w rec Le ess Tha nt hires in hile 5 n $ 810, perce 000 the past. nt of pa Sir xty-ei ticipants ght perc in >$40,000–$50 pla ent ns with of rec ,00 more e0 ntly t hire han d 5,00 partici 0 par pants in tM icipants ore Th 20 an 11 wer $10 h0,0 e eld bala offer 00 ence d compa d funds, ny 50s All indexes are set 45to .9 100 in % December 1996. 16.6% 9.8% 6.8% 4.7% 3.8% Compa2 n.y 7 % Stock 1.8% 1.4% 1.1% 5.5% number of 401 12). Examining t (k) plans to be about 540,000. The estimate he interaction of both age and tenure with of th accou e number nt balanc of active 401(k) plan participants is based on es reveals that, for a given age group, a (Februa 101–500 ry). Av ailable at www 42.9% .i ci.org/pdf/p 14.3% er09-05.pdf 6.2% and www.ebri.o 9.9% rg/pdf/briefspdf/0200ib.pdf 2.8% 18.2% >$100,000 27.9% 12.7% 43.8% 15.6% Figures Report availability: >$90,000–$100,000 Equit 40s y, bond, money, This r and/ e22% port is or balanc About Changes in Account Balances availa ed 22% funds 40.1% ble on th 21% e In Siz te 40, e of rnet 918 20% Accat ount www Balanc 12.9% . 22% eebri.org 8,300, an 20% 549 d at www.ici.or 23%$393, g 47.0% 851, 22% 429,251 22% 11 30s 77.9% b 37.0% 8.4% 43.5% 38.9% 4.6% 7.2% 12.0% 4.8% 3.0% funds>$30, T and he S& 000–$40, fundi P 500 is an and under 0–2000 ng. index There is wi of 500 standing of employee benefits and stock labor un > s 23% 2–5 chosen f 35.7% despread ions; h or mark 24% et ealth 7.6% siz re e, liquidity cog car >5–10 25% e prov nition , and industry iders and insur that if employee be 22% 7.8% group representation. >10–20 23% ers; government org 7.9% 26% nefits >20–30 2.0% data exist, EBRI kno 25% anizations; 19.0% 23% and service firms. >30 24% w16.0% s it. Cambridge, MA: National Bureau o 1–25f Economic Research. Revenue Code . ? 2 Seventy-t 011 by Partic b. “Th Sec. 401(k). The law went into effect on Janu ipa All ew Emp n o percent of 401(k) plans included t Age a loyment Sit nd Tenure, 2011 uation, About the EBRI/ICI Database 15.8% October ........................................................................................... 2011.” ary 1, 1980, bu News rel ta28% rget-date funds in their investment lineup at 10.2% ease, Nov t it was not until November 1981 that proposed ember 4, 20174.0% 1. Washington, DC: . 28 U.S. The Vang The ? asset all Total i uard no Group 2012 re vestment ret cation path that the target-d uported that “only 11 [percent] of DC plan rn on account ate fund balances, whic follows to shift its focus from gr h depends on part the icipants traded in their accounts,” down from performa owth to income ove nce of financial mar r time is typical kets and on t ly he Age 60s 49.4% 15 a .7% Percentage of 8.7% Account B 5alanc .9% e Invest4 ed in B .0% alanced F 3.3unds % 2.3% 1.6% 1.3% 1.1% 6.8% 2011.. c Salary Range compared with Source: 63 perce Tabulations nt of rec frome EBR ntly I/IC hire I Participant-D d particiirec p Siz ants ted e of Rin 2 etirem Ac0 count 1 ent 0, Plan 61 Balanc D pe ata rcent o C e ollection f rec Project. ent hires in 2009, 60 percent of In the 16 year stock as an i >$100,000–$200,000 50sn Tv he Russell 2000 s that the dat estment opti Indexon in a measures 22% base h 2011. the aperf s been trackin c T 20% ormance of h 38.1% us, to analy the 2,000 19% g loa smz allest U.S e nthe ac 18% tivity amo . companies (based potentia13.0% l e 19% ng ffect on 401(k total mark of )pla 18% et capitaliz pla n si n part ze, th ation) icipa 19% ine r cluded in the e nmain ts, there has 48.8% Russell ing 19%pan 3000 e been little ls of 19% Figure 501–1,000 Of whic h: target-date funds 42.9%an option 14.5% 6.9% 9.6% 2.5% 18.2% combination of average accou 40s 74.0% 39. data from U.S. Department of nt ba 3% lances t 9.9% end to 37.0% incre 33. ase with 0% Labor, ten Bureau 4.u 1% re. 29, Fo of Labor Statis r example, t 371 8.3% 14.6% htics 2007, 2008a, 2008b, 2009 e aver 6, 6.454, 0% age ac 624 3.1% count balanc $303,e 591, of pa , 2010a, 2010b 429, rticipants in 002 , >$40,1–100 000–$50,000 101–250 251–500 22% 21% 501–1,000 22% 1,001–2,500 20% 2,501–5,000 21% 5,001–10,000 24% 24 22% .0% >10,000 20%All Plans21% Plans Without Company Stock, and GICs, and/or Other Stable-Value Funds 16.7% >90% 42 . 2001b. 177.7 “The Im 0.10847 pact of Employ 10.8473 er-S 26–1 el 00 ected Investment Options on 401(k) Plan Participants’ Asset Allocations: 27 Years of .2% Tenure 40s When analyzing the change in participant account balances over time, it is impo Figure 1, 401(k) All Index (wPlan hich track 13. C5 5h s1 arac the .03,000 %teristics, largest U.S 14..3 by Number companies). % 8. 8 of Plan % Participants, 2011 6.2% 4.4% ................................................... 4rtant to have .0% 2.5% a consistent sample. 1.6 8 % 1 .2% 0.9% 5.0% Participants 16 percent in 2 referred to as the “glide path.” Since discussions of asset alloca VanD regulations were issued (see Holden, Brad Plan-specific information on loan provisio Group erhei, allocation o year-end 20 Departm 60s Jack L. 20 Note: 008, making it Zero ent o f Row assets in an f11. 02. Labor, percentages 1–10% Co At year-end 2011, 13 percent of th mpany Stock “the lowest lev Burea in may 11–20% dividual u of not add Labor y, and Hadley 200 36.4% ns i’s accou to 21–30% n e is available for the majority of the pl 100 401(k) Plans l observed si Sta percent n tistics. Available at t; an 31–40% because d nce [they] began tracking this : 6; Employee Benefit Rese Results o of tio 41–50% rounding. n e assets in usually fo f a 12.8% "E 51–60% quity Survey of ISC cus o th funds” e EBRI/ICI 40 ans in the sample (including virtually n the p include 61–70% arch Institute 200 E data in 1999.” eBS Mem mu rcen tual 71–80% tage of the portfoli 1(k) da funds, baers bank 50.8% . W 5; and U.S. Int tabase was inv Aon Hewitt 201 81–90% ashingto investe 91–100% on, e D 2 rnal all C e: sted of d in >$200,000 18% 15% 13% 13% 13% 12% 13% 12% 12% Source: d Tabulations their importance to our nation’ from EBR 12. I/IC 9 I Participant-Directed Retirement 1 Num 5 Plan D .9% ber of ata C Part ollection s economy icipant Project. s in Plan. Investment Co Sour 1,001–5,000 ce: mpany I Tabulations n from stitut EBRI/ICI e. Quart 40.5% Participant- erly S Direc uted 16.5% ppl Retir ementa ement Plan ry 21% Data Data 6.2% Collec . Washin tion Proj 9.1% gton, DC: ect. Inves 2.1% tment Com 19.2%p any Institute. variation. 25 recent 50s Age Group grou 70. hires p 3% plan Fro in Formerly m 34. s 20 by inv 19 6% 08, 96 the Lehman B 53 throu 11. es perc 3% tme 45g .r9% n others h ent of 35. t optio 20 3% U.S. 08, o rec An ggregat sn an 31. e a nt e v d 6% Percentage of Account Balance Invested in Target-date Funds B erage, pla hires in ond Index n s less th , iz the Barclay 2 3. e. 0 7% 07, an one-fifth s33 Capital U.S 10. perc 0%ent o . Aggregate B 19. of 401(k f 2% recent ond 6. Index )5% hires partici is composed of 3. in p 3% 20 ants 02, securit with an ies d 2 cov acc ering gov 9 e ss to loans h perce ernment nt of rec ad ent The EBRI/I Equit >$50, C y,I bond, Participant-Dir 000–$60, money, 000 and/ ected Retirem or balanc 19% ed funds ent Plan Data ,19% 20%Collection 18% Proj19% ect is the larg 21% est, most representative rep 21% 19% 19% ository 2011a, 2011b, their 60s with 2012a, and 2 up to two year 012b; and U.S. s of tenure wa Department of s $25,678, co Labor, mpared Employee Benefits Sec with $208,892 for p uarticipants rity Administration 2008a, 2008b, in their 60s with more Source: Tabulations from EBRI/ICI 401( 11. k)6 Participant-Directed Retir Number em ofent Par Plan ticipant Data s in Collec Plan tion Project. Source: Tabulations from EBRI/ICI PEBRI’s work advances knowledge and unders artic10 ipan 1– t2,5 -Dire 00 cted Retirement Plan Data Collection Projetanding of emplo ct. yee benefits and their Congressional Figure EBRI delive 29, All Average Asset N169.9 ote: At $0 collectiv Budget O year-end 2011, rs a stead 0 e .10371 trusts, 19% ffic All the av life eo . 20 insur erage account cation for 10.3711 y12. ance stream of invaluable research and anal Th separate balance e 401(k 2012 Lon 38.8% among accounts, ) Pl all 24.0 million an g-Term and Parti any c 401(k) particiants Projections ipants pooled inv Wi estm tho was 13.3% ent fo u $58,991; t Equ r Social product the median ity Fund Balan prim Sec arily yu account sis. ri inv ty: Addit ested balance w cin es, by stocks. i as onal $16,649. 47.9% Participa Information Percentages do nt SalarPrelimin y Range Note: Per Perary Fi cc entages entage of ndin may gs.” Worki not par add ti to ci 100 pants per ng paper prepared for cent because of rounding. The t tenur he e Cvar enter iable isfor gener Pensi ally year on an s workd R ing at ectire urrent ment R employere , searc and thush (C PRR) Comparing average account balances across different year-end snapshots can lead and corporate bonds, mortgage-backed securities, and asset-backed securities (rebalanced 14.6% monthly by market capitalization). to false conclusions. For ex The index's total return ample, 12.4 b 18% Revenue Service the small plans 20s in target-d www.bls.go Employee Source: T) abulations . Some plans without this in 1981). Ben ate funds and 39 v/n fe re om fit ws.release/a EBRI/ICI Par Research tic I ipant- percent of 4 rn chives/empsit 35.8% stitute. Avail Direc formation are classified as ted Retir38.7% em 01(k) particip a ent Plan _11042011.pd ble at Data Collec www.e 7.4% ants h tb ion fri.org/pdf/iscebs.pdf Pr ha ojving a loan provi ec et.ld targ 9.5% et-date funds. Also known s 3.5% ion if any participant in the plan as lifecycle has found that 14. equities, the glide path gener 20s 15% a Note: T 6 percent of pa 30. he 8% tenure var2. iable 8%a rticipants traded in their account islly reflects generally 2.6% yearsthe declining percentage of equities in th work2. ing at c 5% urrent em 1.7% ployer, s in 2011, a and 1. thus 9% may over nd 12.9 percen s 2. tate 9% yeare portfolio as it approa s of par 1.6% tic t changed the ipation in the 1.5% >5 401( 0-9 k)asset allocation plan. 0ches and p % 1.4% 50. asse 3% of thei s the r Changes in Asset Allocation Betw 60s 59.4% >5,000 not add to 100 percent 30. 7% 11.8% because 30. of rounding. 5% 40.1% 25 27.4%een Year-End 2010 12.2% 3.1% 11.3% 13.5% 25.0% 10.4% and Year-End 2011 12. 2% 2.3% 3.9% 18.2% This report is bein and >$60, GICs 000–$70, Age Group and/ g pu or 000 blis other hed simulta stable value 16% n >0–50 percent eou funds sly as an 17% EB 18% RI Issue Br >50–90 percent 16% ief and 17% ICI Researc 19% h Pers >90 percent 19% pective 17% and is availa 18% ble on hires inT 1 he9 m an 9 ay8 Sour al consists of over y(Figure sc is s e: t ate in Tc abulations lu y price ear de 34 s s appreciation/deprec of t). At he par f r9. om tic 2 im pation EBRI/ICI Par year-en illion in pa iation the rtd ic t401( ic plus income 20 ip ipant- an k11 )t plan. s D , 51 in irec pl as a percen ted an percent s Retir witem h 42% tage of cent om o 21, Plan Data pa f the ny 768 rec original ste ontly c Collec k inv at estment. y hire tion ear-e Pr d oj nd 4 ec 20 0 6, t.1 524, (.k) pa 313rticipants $343, held ta 171, rget-date 066,072 funds, loans outstanding. At Source: Tabulations year fr-e omnd EBRI/ICI Par 2009, t tich ipant- e perce Directed ntage Retir17% em of ent p Plan Data articipCollec ants who tion Projec were t. offered loans with loans outstanding of information about individ 100% $20,000–$The 40,000 tenure 1996 v1997 ariable 16%ual 401(k) plan participant accounts. As is 1998 generally importance to 1999 years 2000 working th 2001 at e nation’s econo current 2002 employ 2003 er, my and 2004 among policy thus 2008 2005 may of December 31, 2011, the EBRI/I overstate 2006 makers, years 2007 the news of participation 2008 media, and 2009 in the 2010the public. It 2011 CI database 2010a, 2010b, than 30 y Note: T ears he 2011, 2012a, a of ten tenure var ure (Figure iable is gener n 18% d 2012b; ally13). years w 2 Similarly, the aver or 17% and ,50 king at c 1–analysis of sam 10ur ,00 rent 013% employer, age and ples 19% thus account of consiste may over balance of s20% tate nt plans in the years of par 19% parti ticipation 16% cipants i EBRI/ICI database. in the 24% 401( nk th ) plan. eir 40s 22% with u25% p to two Figure 2, Distribution 86.2 EBRI 0.05262 of 401(k)publications 5.26187 Plans, inPart clude icipants, a in-depth nd cove Assets............................................................... rage of key issues and trends; summaries of rese ....... 8 arch (October). Washington, DC: Congressional Budget Office. Available at 30sCurrent Age or Pensio Tenure n Policy ................................................................................................................. Issues a Confer 48.1% ence, 24.0% at Miami Univ6.3% ersity, Oxford 12.1% , OH, Jun 4.4% e 8–9, 2001. ........... 29 ? b Withdrawals, borrowing, and loan repayments. the addition of All 75.0% 35. a large numb 5% 9.3% e 38. r of ne 7% w plan 34.3% s with 15% smaller 4.4% balances to t 8.2% 16.4% he database 5.7% 3.would tend to 2% 15% pull down the average > All $70, 000–$80,000 41.1% 16% 14.0% 15% 15% 16% 8.9% 15% 9.9% 16% 18% 2.6% 17%18.4%16% 16% an o target date, contributions. . utstanding 2 R funds, th 012. ow pe which is usually in “ rc Of Similarly, Aon He T en lo he w tese funds are desi an balance. ag h 20s U.S. R ic es h: m tay arget no etir t-dat ad This may ement Ma dicated in the f d witt 2011 found that 1 e up funds to 100 gned to offer unde an rket, perc opt en 9.0% r Thir state the num ion und’s t becd Q auname. se a diversified u4 oarter .2 percent of participants tr f ro T un ber o 15, 20 h die ng 839 12 target date . f plans offering loans (or part ” portfolio that autom (D10.4% ecemgenerally is the ber). 4, Availa 171, aded in their accounts in 2010, and 464bla e at da tica te at which icipants eligible for loans) lly 80.6% rebalances to be more $221,733, the typical inve 496,098 stor Investment 30s Age Group pe 39. 401(k) rformance 6%plan. 5. like 1%ly explai 4.5% ns mu >0–50 percent ch of 4.1% the fl 2.uct 7%uation i 2.4% n >50–90 percent 401(k) participants 2.6% 1.8%’ asset al 1.9% locati >90 percent ons over tim 2.1% 33.e2% . Much both or >$40,000–$60,000 ganizations’ websites 20% at www.e does this b b 23% ri.org/publication y conducting 21% sand p /ib 26% anublishing policy re d www. 28% ici.org/re 27% sear searc ch, analysis, h/perspectiv 30% and e special reports on It is 26% an up 26% date to Distribution of Equity Fund Allocations and Participant Exposure to Equities ticked while 1up 8 perc to 2e 1n p t he ercent ld non–t and a remaine rget-date d at ba t 50s la hat lev nced fu el at nds, yea ar-en nd 2 d perce 2010 nt an held bot d year-e hn tar d 2 g011. et-dat Howev e and n er,o not al n–target-dat l particie pants included statis 26 What we do 40s tical information about: 51.0% >10,000 17.9% 6.2% 12% 14.2% 5.2% 13% years of tenur 271.3 e was finding $1 0.16561 4,5 s and 82, compare 16.5609 policy develo d with $ pments; 128,158 timel for partic y factsheet ipantss in t on hhot topics; eir 40s with more regula than r upda 20 y tes eon legi ars of te slat nure. ive and 8.4 d 12%12% www.cbo.gov/sites/default/files/cbofiles/attachments/43648-SocialSecurity.pdf VanD There .erhei, 2012 are two possible explanations for th > 20s $80, Ja a. ck. 20 National Compensation Surv 000–$90, 30s10. 000 “The Impact14% of Au 26.1% 14.0% ey: Employee t e low account omatic Enroll 14% 7.5 15% ment in balances amon Benefits in 14% 40 10.4% 1 Pri (11.8% k)v g this group: P 11% ate In 14% lans on dustry i Fut 16% (1) their employer’s 401(k) pla un re R the United 22 16% e.6% 75.6% tireme 62.2% nS 15% t Accumulatio tates, March 15% n n 2012 s: A has . account balance. This could then be mistakenly described as EBRI’s mission is to contribute to, to 11% 11% an indication that balances are declining, but 11.2% 11% actually PLA 3 NS W >$60,000–$80,000 Plans With ITH GICs A Co ND/ mp OR OT any StHE ock 18% R S TA emplo BLE23% -V yee benef ALUE Fi UNDS ts issues; holding educational br 20% 24% 24% iefings for EBRI memb 24% 11% 26% 11% ers, congressional and 23% 22% because some focused on in E www.ic quity, bond, plans may i.org/inf money, come ov o/ret_12_q3_data.x hav and/ e offered a pla or er ti balanc me. ed funds ln s loan, but no , participant had taken out a loan. It is likely that this omission is fo 14.6 percent changed t r who 40s 50sm that fund is design 45.0% he ass 6.2% ee dt allocation would reach retirement age and sto 5.0% 44.9% of their contributions. Hewitt Ass 4.7% 16.9%3.0% 2. 6.7% 5% p making new invest ocia 2.6% tes 2009a reported that 19.6 percent of 18.6%1.7% ments in the f 7.0% 1.8% 10% und. 1. 9% 25.6% of the movem $70,000 ent in the largest compon 10% ent, equity funds, tends to reflect overall equity market prices, which generally “40 See I 1(kn ) vestme Plan Ant Company In sset Allocationstitute 2012. , Account Balances, and Loa22 n Acti 6. .5% 4 vity in 2010,” originally published jointly by EBRI and ICI Figure 3, 401(k) balanced funds (Fi Plan regul gure Catory h 35 arac ). At year- de teri velopment stics, by end 2 Plan Assets, 2011 010, s; comp 48 perce rehen nsi t of ve ................................................................... rece refere ntly nce hired resou 401 rces (k) p oarticipants n benefit pro helgrams d target- ........ 8 an dd ate wo funds, rkforce have access to 40 933.1 1(k 0.56959 ) plan loans—factori 56.9589 ng in all 401(k) participants with and without loan access in the database, only Figure 80% 30, 30s Asset Allocatio d n to Equities Var 9% 33.5% ied9% Widely Among 401(k) Plan Participa 13.3% nts ................................... 53.2% 30 The Participa . chan 2001 nge ts in c. “Contributio in 40 any i 1(k n)divi plans dual n B may hold e partic ehavior o ipant f q 401 ’ui s account ties throu (k) Planbalan Parti gh a ccv e is i iariety of pants.” nfluenc Invest opti ed ons inclu ment Com by the magn dinp gan equity itude y Institute of fu these nds, Per company stoc three spective factors r 7, no. k, and elative 4, >$80,000–$100,000 >$90,000–$100, 40s 000 17% 13% 21% 15.2% 13% 17% 13% 22%13% 10.2% 8% 21% 13% 20% 15% 15% 23% 74.5% 14% 20% 14% 19% only recently been establishe 20s 60s 73. Washin Simulation 4% 1–100 32. gton, 9% Stu DC: U.S. 7. dy Based o 3% d (80 percent of all 401(k) 47. De 4%33.1% pa n P federal agen rtment of lan Design 38.5% 15.7% 31.9% Labor, Bure cy Mo s 15.4% taff, and th 15. dificat 5% -typie plans in exis a ons of L 4.3% u o e news 3.f9% Labor Statistic 6.6% media; arge 8.5%12.2% tence in 2010 Plan and sponsoring public opinion survey S 2.p 23.8% s 9% o . Available nsors.” 13.2% 1. were established after 1991 0% 9.4% EBRI at 9. I 1% ssue Brie 4.8% f, no. s on emplo 13.7% 341 (Apr yee il). and company stock 565 F 3,ig 332, ure 778 34 $207,379,938,703 would tell us nothing about consistently p 8% 8% articipating workers. Similarly, the aggregate average account balance would 10% 7% 7% small, as U.S. ? participants made asset transf 24.0 millioGovernment Accountability n 401(k) plan partic ers in their account balances ipants, in Office 1997 found 43 during 2008, w that more than h 95 percent ich was “up only marginally” of 401(k) plans th from 2007 (although, at offer loans had at rose from 50s 40s 19947. 7 throu 6% gh 1 6.6% 999, before 5.0% fallin 33.9% g thro 4.8% ugh 2 3.1% 002, risin 2.g 6% again 13.5% from 2.6% 2003 1. thr 7%ough 20 1.7% 07, 52.6% then 1.8% 9 droppin .2% 22. g i 5% n in December 2011. issue encour s; and age major survey , and to enhance the development s of public attitudes. 9.3% The 17 perc distri ent hel bution d of c no account n–target-date bala balances u a nced nders fun cores the ds, and 2 perce effects of a nt h ge eld an both. d tenure on account balances. In a 6% given age 18 perc >$100,000 ent >$100, had loa 000–$200, ns outsta 000 ndin 14%g at10% year 16% -end 20 9% 11. 13% 10% On avera 16%9% ge, ov14% er the past 16 years, amon 10% 14% 11% 11% 16% g partic 10% 14% ipants 11% 14% with Copeland, Craig. 2011. “Tar 50s get-Date Fund 14.6% Use in 401(k)Median Plans and t 9.6% he Persistence of Their 75.8% Use, 2007–2009.” 5% EBRI 12Plans With GICs and EBRI Issue Brief and/or Other Stable-Value Funds , no. 23 benefit issues. 8 (October). A EBRI’s Ed vailableuc at ation and Re www 5% .ici.org/pdf/p search F er07-04.pdf und (EBRI-ERF) performs and the charitable, to the starti balanc 30s 73. ed fu 5%101–500 nds. This sectio n g account Of 34. w 0% 34.2% hich: 8. ta bal 1% rgeta -dat n n focuses c 45. e. For e 0% funds example, a fi an 32. rst opt 7% on the investing ion17.8% contri 12. 4% buti Fion gur5.5% pattern 4. of 1% e a given 28 of 8.2% 401(k) plan 14.6% dollar amount 2.8%8.6% participants 1.3% produc 7.9% es wit a lar h respect to 6. g9% er growt12.7% equity h rate 465 2,657,116 $150, a 996,996,797 4% 4% b 4 MacDonal [tabulations of U.S. Department of La Lifest ? More new o yle funds maintain a p Available www.bls.go 50s d, Bonnie at v/n -Jean www.ebri.org/p r recent hires invested cs/ebs/benefit ne, and redetermined risk level and ge Kevi dbor Form 5500 data f/briefspdf/EBRI_I s/2012/o n D.32.8% Moore. 2 wner their 401(k) ship/private/ta 011. Bfor 2010]), or (2 _04-20 “Moving nerally use words such as “co 10_No341_Au assets in ble02a.pdf Beyo 13.5% nd t ) the em h e Limit balanced funds, including target-date to-Enrl.pdf ployee only recently joined the plan ations of nservative,” “moderate,” or 8.1Trad % itio 853.6% .0% nal R 4% epla 4% cement tend to be pulled down if a large number of older participants retired. In addition, chan 7.9% ges in the sample of 5.5 least one plan The Employe Source: Tabula tie participant o Benefit Research Institute (EBR ns fromEBRI EBRI/IC wit I Ph ameetings an outstanding loan. rticipan t-D present an M irea cte n dy R eR tiree m d I) c en is a no explore i e t Pn lan tl Dy a ta npro H Cs i or sues llefit, e ctid o no n P 4 with ro npartisan, 0 je1 ct.(k thou ) Pght l public po anleade Parti rs licy research o cfrom all se ipants H ctors. rganizatio old Banla that nce do des no Fun t ds Fig they tended to u 60s re 4, EBRI 51. /ICI move larger portions of 3%401(k 6. )1% Database R 4.2%their account balances). Fidelity Investme epres4. ents 2% Wide Cro 2.8%ss-Section o 2.4% f 401 2.4% (k) Univer nts 2008 1.5% se reported that overall only 6.6 per- .................................. 9 1.6% 1.7% 21.7% 200 ? 8, a 64,14 nd > 1 emp risi $200, ng 000 lofrom y 60s er-spo 200 nsore 9 through d 401(k) pl 2 5% 01ans, ho 0, be 13.7% fore 5% ldin moder g 5% (mid-point) ating in 4% 20 8.2% 11 (Fi 5% gures 8 and 5% 20). At 5% 78.1% year-e 5% nd 2011, 5% equity group, Figure 20s shorter 31, As 1638.2 se tenur t Allocatio e tends n Dto mean istribution educa that 35.1% of tiona 4 a hi 01(k l, and gher ) 27.9% scientif Partici perce p ic func n atage nt Account ti of 14.2% ons of the Instit partic Bal ipants ance to 8.1% ute. EBRI will Bala hav nc e -ERF 1.4% accou ed Fun is a tax-ex nd t sbala , 7.4% nces of empt organizatio less th 7 .4 % an n Source: Tabulations CHECK OUT EBRI’S WEB SITE! from EBRI/ICI Participant-Directed Retirement Figure 46 Figure Figure 15 Plan Data 17 Collection Project. loans outstanding, a 40s 69.0%501–1,000 34.8% Figure 8 35.3% bout 9.4% 14 perce 38.1%nt of 28. the 7% remain15.8% 9. ing acc 4% o4.0% unt balanc 5.0% 8.4% e r15.5% emaine 3.4%d u7.4% n 1.pa 4% id(Fi9. gure 5% 4 6). 12. U.S. De 1%18.6% partm ent of Issue Brie 60s f, no. 36 29 1 .3% (August). Availabl 32.1%e at www.ebri.org/ Figure 44 pdf/briefspdf/EBRI_I 12.8% B_08-2011_No361_TDFs.pdf 55.1% when funds. a Th 60% E dde www.ebri.org/ quit e ass d t y, bond, oe a smalle t allocat m of sound employee benefit pr oney, pdf/briefspdf/1001ib.pdf ir ac on o and/ count. On f participan or balanced the ts funds other ha without , equity nd, in ogr vestment retu fun ams and ds is explo rns of a red next, given beca perce use 4 n0 tage 1(k) pa produce rticipants larger holdi dollar ng no Among those who Per hel ce dn bala tage nced fu of 4 nds, r 01(ke)cently h Plan P irea d rFigure 8 t participants Figure 19 icipan ts W in i201 thout 1 were Eq mo uit re like y Fund ly to B hol ad la anc high es Note: The tenure variable is generally years working at current employer, and thus may overstate years of participation in the 401(k) plan. (whether o funds. Rates.” So n his o Fo r her o r example, at y ciety of Actuaries wn or through auto ear-end 2011 (September). matic enro , 51 percent of Available at llment) Figure 11 . In either event, job tenure would www.soa.org/re the account 4.5 balances of r search/research- ecently not accurately reflect actual hired participants in “aggressive” in their name to indicate th $60,000 e fund’s risk level. Lifestyle funds generally are included in the non–target-date recordkeepers and changes in the set of plans for w 30s Note: Components EBRI do not regula add to r100 ly provides percent 44.8% becaus coe ngre of 20.0% rounding. ssion hich al they keep records also can influence the change in aggregate testimony 10.1% , and briefs p 7.9% olicy 1.9% makers, mem 9.4% ber organizations, lobby or take positi Salary Range All ons on legislative proposals. Percentage 12.8% of recently hired 401(k 10.1% ) participants holding b 77.0% alanced fund 5.s 1, 1998–2011 cent of participants in their recordkeeping sy bsupported b stem made ex y contributions changes d and grants. uring September, October, and November 2008, a time funds All were All 39 perc 43.6%ent o5. f t 6% he assets in 4.5% the EBRI/ICI 31.0% 4.2% 401(k) data 2.7% 2.4% base, 12.9% compared 2.6% wit 1.7% h a 42 percent 1.7% 56.1% share 1.8%at year 29.-en 1% d 50s 63.6% by Age 1,001–5,000 30......................................................................................................................... 9% 37.1% 10.2% Few 34.4% 401(k) Participants Had 401(k) A Ratio of 401(k) 26.1% ccou13.7% nt 8. Balances Greater 3% Accou4.5% Outstanding 5. n 9% t Balance 9.8%14.4% Than $100,000, to Salary 401(k) Loans; 4.6%6.3% 1. , 4% 11.9% ............... 30 19.4%18.1% $10, ? $1.41 000. Fo 5 trilli r ex on i ample, n assets. 92 percent o Percentage f participants in of Eligible their 20s 401(k) with tw Plan Participants o or fewer years of t enur e had account balances of Labor data i and n com dicate that pany stoc loan k, and amounts te GICs and/ornd to be a negligible portion of plan assets and that very 3.9little is converted into Ratio of 401(k) Accou Percent Change in nt Balance to Salary Total Return Indexes for Participants in Their 60s, 4.3 by Tenure VanD 43 . erhei, 2012 Ja b. ck, and Crai “The Employment Sit g Copelanudation, . 200 8October . “The Impac 2012.t” of Ne PPA o ws rel ne R ase, Nov etirement ember Savin 2, 2 gs for 012 40 . Wash 1(k) ington, Participa DC: nts.” U.S. 4.0 EBRI increases equity 40s funds c (or decreases an holdA equ g ) e wh iti Composition es in t en com he poun form 47.5% ded o of com of Selected 401(k) n a 14.5% larger pany stock asseor throu t base. A 8.6% ccou A gsset allocation also influences investment r h ba nt Balance lance 8.5% d fuCategories nds. Finally, 2.2% th 12.4% e overall investment eturns concentration of their accounts in bala 11.1nced funds compared with past years. At year-end 2011, 74 percent of recently $20,000–$ and 40, Wh 000 the medi o Have a E on employe q17% uity Ex19% pos r benefits. ure 18% , by Pa 18% rticipa17% nt Age21% a 4.0 nd T b,c e 19% nure, 2 17% 011 17% Figure 5, 401(k) balanced fu 401(k) plan pa The percent their 20s was invested in b projects/pension/research-moving-beyond. nd a rticipation. catego ge of 401(k) participants wi Partry. icipants Represent alanced fund a th 401(k) loans Range of Ages s, comp aspx outstanding ac ....................................................................... ared with 44 percen 2009 ross all part t in 2010, an icipants both with and without 40 d about 7 per..... 11 cent in 1998. 1(k) average account balance. Thus, to ascertain w sound public policy thr 10.3 10.3 b ough objective hat is happening to 401(k) participants’ account balances, a set of 60s 52. 5% 7%>5,000 27. 31.0% 6% 11.2% 30.8% 22.8%16.7% 8.0%4.2% 6.8% 13.5%13.3% 7.2%9.4% 1.7% 19.2% 21.5%20.3% Age E q G uity rou Fu p nds 1998 Com1999 pany S tock 2000 44 by B Participant alan2001 ced Funds 2002 Age and Bond 2003 T Fun enure ds 2004 GICs 2005 and Other 2006 Money2007 Funds 2008 2009 2010 2011 Table of Contents of stock market volatility. Furthermore, Choi Loans T et al. 2001 found by Participant ended to Be A that 401(k) Small, ge and 1996–201 Tenure participants rarely 1 made cha c nges after the initial 201 . 0. B 2012. alanc “I ed ndivi funds, dual wh Acco ich invest i unt Retireme With 401(k) Plan Loans, n equi nties an t Plans: d f Ain xe An d-income sec alysis of th by Plan Size, e 2 urit 2011 010 ies, incr Surv e 201 ey of ased 1 Consumer in share, acco Fina untin nces.” g for EB 2 RI Issue 1 per- less than . 2 002. ot$1 her “ 0, sC 000 table an 4 in value 0 2 1(011, k) Ac funds ccumulations ompared Percentage of Account Balance Invested in Non-Target-date Balanced Funds with Generate 58 perc Si ent o gniffi cpartici ant Incom 890 pants i e fno their r Fut 5,u 2 825, re 0s wit 758 Retir hees?” betwee Investment Com $470, n five 393, and 829, 10 973 years pany of 50s 8. 60 9 40.2% 12.8% Percentage, 2011 8.6% 10.4% 2.6% 19.2% deeme The 2011 EBRI/ICI databa Aged distributions in anyse covers 47 percent of the universe of 401(k) plan participants, more than 10 percent of given year. Perc entage of Account Balance Invested in Target-date Funds 5 Percentage of participants w 8.3 ith 8.account 4 balances in specified ranges, 2011 and c in equiti h40% an Issue Brie Departm es acr ges i >$40,n o 000–$60, assets. For ss all 4 ent o f, nof. 31 Labor, 0 000 1(k) 8 exampl (Jun plan Burea e). partic e, st u of Available 17% ipa oc Labor ks (as measur nts is pr at 16% Sta www.ebri.org/p t esent istics. Available at 16% e ed d. by the S 8.2 16% df/briefspdf/ebri_ib_06-20087.pdf &P 500 tota 15% l ret 19% urn index) incr 17% e15% ased 2.1 16% percent hired paAge Group rticipa nts hold EBRIing ba issues lanced f press unds rele >0–50 percent as had mor es on ne e th wsworthy an 90 perce developm >50–90 percent nt of the ents, ir acco and i unt bala s a48 mong nce .0% inves >90 percent the mo ted i st n widely qu balanced oted EBRI’s website is easy to use and packe a d with useful information! Look for a Stable-Value Funds plan loan acces A The ll Investme 69. 20s A significant 7%All 32.4% 32. nt Company Institute (ICI) is t s was similar in earlier 7% 27.subset 07. % 9% of that 239. 8.3 0% % balanced fun years. For example, in 2010, this m 2 28. 7.1 7% %h16.1% e national ass 27 d 10. . category 3% 3% o4.2% 3ci 2 5. atio .7 i0% s % target-date funds. At y n of U. 9. 32% 513.6% e S. investment co .1 asure % 3.5% was 18 38.98.7% % 1.4% percent; in 200 mpanies, e 4ar-end 2011, 40 3 10. .5% 1% including mutual f 49, 19 percent; in 13. 8.50% %19.7% percent of 51.1 % unds, 63.6% 64.1% 69.6% 72.0% EBRI Issue Briefs is a monthly F44 igur .9% e periodi 48 cal with in-depth evaluation of employee benefit issues consistent participants must be analyzed. Future research will e Percen Percentage, tage of Particip 201 xants amin 1 EBRI/ICI W e linked data to analyze the consistent sa ithout Equity Funds mple of Figure 60s 32, As s Of e t Allocatio which: target n D -dat ise tribution funds Percentage of 32.7% an of opt 4ion 01(k) 11.4% Partici participants Inve pa stn m t Account entw S&P 500 Cat 8.2% ith account egor Bal y ance to balances 11.5% Balanc 3.1% ed Funds, 27.4% point of enrollment. (For household survey results from late 2011 reflecting househol 650 3,044,827 ds’ sentiment toward and confid $261,284,457,135 ence in cent of the assets in the database at year-end 2011. Despite these changes in shares of balanced funds and equity 27 Brief 400%, no. 37 Age Group r 5 (Se esear ptember). ch and education. Per Available centage of >0–50 percent el at igibl www.ebri.org/p e 401(k) participant >50–90 percent d s wi f/briefspdf/EBRI_I th outstanding 401(k) lB oans _09-20 >90 percent 12_No375_IndvAccts.pdf tenure 13 (Fi Institute P 20s g 10 ure 0% 14). O erspective lder wo8, no. rkers displ 3, and ay a 20.4% EBRI similar Issue Br patter ief n,. Fo no. r exampl 251 5.7(November 13.3% e, 64 percent ). Availa of pa blerticipants in t at www.ic 66.3%i.org/pdf/per08- heir 60s with plans, and 44 Group >$60,000–$80, percent of 401(k) plan assets. The EBRI/I Zero 000 1–10% 11–20% 15% 21–30% 13% 31–40% 14% CI project is u 41–50% 13% n 51–60% ique becaus 12% 61–70% 17%e it includes d 14% 71–80% a 13% ta provided by a wide 81–90% 13% 91–100% sources on employee cbenefits by all media. Morningstar. 2 It is possible that these older, longer-t 30s www.bls.go $50,000 012. 2 v/n 9 Ibbotson .0e %ws.release/a 3 SBBI 1.0% 20 rchives/empsit 12 2 enured workers accumulated DC 8 Cl .3% assic Yearboo 26._11022012.pd 5% k: Market R 33.1% f e 3sults for 6plan assets .2%4.8 Stocks, Bonds, 39. (e.g., possibly in 8% 42.8% Bills, a profit-sharing plan) 4 and I 7.9%nflation 54.2192 % 6–59.6% 61.2% 63.0% 68.1% durin Figure 6, 401(k) GICs are in g 20c11, swhile u 50 rance compan Part bo icipa nds n(as measure ts y products that Represent and trends d a by the Range of Job guarantee , as Barc well as lay 47.3 a s scrit Capital Tenur pecific ical es anal rate of return on the invested U.S. ................................................................ yses Aggre of em gate ploy Bo ee b nd I enef nit depolici x) inc capital over the life of the esr and pro eased 7.8 pos per als . 11 . cEBRI ent funds, compared with 70 percent in 2010, 61 perc 401( ent k) Loan in 2009, Bal 56 perc ance ent i s n b 2008, 48 percent in 2007, 43 perce nt in clo Plans With Company Stock sed-Plans With end funds, Co exchange- mpany Sttock a raded fu nd GICs nds (/Stab Egreater than $100,000 at TFs) le-Va , and unit i lue Fund Figure nvestme s 6 nt trus year-end ts (UITs). ICI s 2011 eeks to enco 4. urage adhere 1 4.1 nce to high PLA 2008, 16 percent; in 2007, 16 Introductio NS W Our the account b ITH C nO .................................................................................................................. MPANY ST alances of r OCK percent; and i ecently hired participants n 2006, 15 per Noc n- ent. Ta in rget- their 20s was i date nvested in tar 3.9 3.8 ............................ 6 get-date fund Combina2010 tion of s, 32 participants in these special features: All 300%the EBRI/ICI da8% ta collection effort from 2003 through 2011. by Tenur 30s 20s e ..................................................................................................................... 27.8% 24.6% 64,141Russe9.2% ll 2000 Index 13.9% 23,983,398 66.2% 1,414, 58.3% 796, ............. 31 263,998 3.4 22.5% 401(k) plans, see Holden and >$80,000–$100,000 Bass 2012.) Loan as 14% a percentage 12% of the r 12% emaining 401( 11%k) account bal 11% ance 14% 12% 11% 12% funds, most 401(k) participants appeared not to have made dramatic 11% shifts in their asset allocations in 2011. two or VanD 401(k) Plan Loan Activity So erhei, ufe r03.pdf cewer : T Ja abu years of t an ck, and Lori L lation d s www.ebri.org/p from E eB nur RI/Iu e CI Pa cas. 20 had accou rticip d V an f/briefspdf/1102ib.pdf 10. a t-ri Di “T rec es with Participant Age, Tenur nt the Im ebalanc d Retirepact o m es of ent Pl le afn Auto-Enrollme D ss th ata Can $ ollection 10, P0 ron 00. I jet an ct. n d Autom contr e, aAccount Balance, and Salary st, fe atic Contri wer thbuti an on Escalation one-fifth of th on ose in 20s Ass 40s et Alloc 48. 8% EBRI a3 t0 ion to Equity Funds .5%direct 1.5%33 s .6 membe %1.4%3r 0s .8 a % nd 1.4% other constit 27.9% 1.0% 33 uen .7% 1. cie 1%s 3 to 5.7 the informatio % 2.0% 39.81. % 1%n they need an 42.1 1. % 0% 46.6 1. d % 0% unde 5rtakes 239. .8% 7% new 57.8% 59.3% 59.9% 65.0% variety of plan recordkeepers and, therefo Average and media Notes n loais a monthly n bal re, portrays th ances p for eriod 401(k e activity of participants in 401(k) plans of varying sizes—from ical pr ) oviding curr participants ent in with formation on a variety 401(k) loans, 1998– of emplo 2011 yee benefit 20s 1–100 32.1%27.3% 16.7% 41.7% a 7.4% 5.2% 9.2% 6.7%5.3% 2.9% 15.0% 7.5% 12.0% ( prior to the intr contract. Figure 20% s 10 201 7 an 0%1. C d 8) oduction of 401(k) plan hicago . , IL: Morningstar Inc. a featur es. However, such DC plan arrangements generally did no c t permit employee Form 5500 200 20s6, a 51. n8% d 7 40s percent 24.9% in 6.1% 1998 401(k) Participants Represent a (Figure 51.1% 36 44. ). C 5% 28.8% oncentration 6.6% is hig 5.0% hest amo Range of 7.13.9% 5% ng re 5. cently Job 4% Tenures hir 2.4% ed partici 17% pant 57.4% s with target-date 29.5% 9.5% a Company stock Target-Date funds balanced funds Company stock company stock and/or ethical standar compared wi ds, promote public understand 30sth 35 percent at year 34.9% -end 2 ing, and otherwise ad 010. vance t 9.2%he interests of funds, their shareholders, directors, 55.8% Minor in v e st Of 40 men wh t o ic ph: tio n ta s rget are not -dat sh e ow funds n; ther an eforopt e, per ion centages do not 46, add325 to 100 percent. Perce16, ntage 328, s ar 031 e dollar-weighted 937, avera 606, ges.379,032 Deloitte 0% Consu 350% >$100, 90% lting LLP, Inte 000 rnational 14% Foundation o 10% f Em 10% ployee Barclays B 9% enefit Capital Pl9% ans, an U.S. Aggregate Bond Ind d th 11%e Internation 2610% ex al S 9% ociety of Certi 9% fied About the EBRI/ICI 1.8%Database ..................................................................................................................... 6 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% 64.2% 30s research on an ongoi topics. EBRI 38.4% ng basis. F22.6% undamentals of Employee Ben 4.4% e9.5% fit Programs 4.4% offers a straightforward, basic 15.4% 44 b a their In The U.S. De th year- e 20 60s Retirement Income Adequacy.” partm 11 with 50s en 101–500 EB d e 201 more than nt of RI /1 EB ICI 40 Labor, RI/ICI 1( 2 k) 0 Employee 40 years of t datab 1(k 32.7% a ) se data 0.6 Be e , 87 p nur EBRI % nb 28.7% ea fits S e ha se shows tha e Issue 17.6% rce d acco en curity t of Brie unt pfAdministration a, no. rti t bala , on 7.9% cip 3 ants nces o aver 4 9 (November). wer age, f13.7% l .e 20 e 8.5% 39 percent in ss than $ Age G 08a. pl ans offering r oup Privat Available 10, 3.2% of partic 0 e Pe 00. at nsion loans. Ho ipant 16.0% Plan ac 57.6% wever, Bull count etin, as has balanc 7.1% Abst es was ract of been Figure 7, Dom very large corporations to s 30s • publications Not al EBRI’s entire lib l partic 56. e ipa stic 7% nt 33.4 s ar Stock e offe 3. red t 0% an m hd Bo rary of research publicat is all business invend Mark st 2. ment 4% optet ie on. s— Indexes 2. See 2% w Fi ith a var gure .............................................................................. 22 1. . 6% iety of investm ions starts at the m 1.5% ent options. 1.8% ain W 1. 3% eb page. Click on 1.4% 1.7%EBRI ..... 12 26. 3% 30s 56.0% 33.5% 6. 6% andPercentage /or 38.5% 34. of 0% as active only 401(k) 4.6% as pl onl an 5. y3% participants, equity 10.3% 5. by as 2% onl tenure, y 3.7%2011 target-date funds, 24. and/or 6% 9.5% 33 contributions and often were In plan year 24% 2010 (latest data available), only 1.7 percent designed to be supplemental to other employer plans. of the $3.1 trillion in 401(k) plan These participants’ assets were acco participant loans. unt balances that In 1998 40s1999 2000 2001 37.2% 2002 2003 2004 2005 9.3% 2006 2007 2008 53.5%2009 2010 2011 funds; at year-end 2011, 77 percent of recently hired participants holding target-date funds held more than 90 percent and ad Figure visers. Members of IC 33, Sour Asset Allocatio ce: Tabulations fromn E D I manage total BR istribution I/ICI Participant of- P D assets of $13.8 trilli irarticipant ected Retirem Acc ent P olunt Ba an D on and ser ata C lances ollection P v to Company e more than 9 roject. Stock in 0 million shareholders (see Schrass, 401(k) Plans For the age c40s 60s distribution of 28.4% 401(k) plan pa 34.9% 38.5% Av 33 e.r2 articip g % e ants and a Media 17.2% 29.1n% ssets at year-e 30.2%4.0% 30nd 2011, see Fi .7% 11.0% 36.3% gure 5. 5.5% 41.6% 45.5% 50.1 18.9% % 53.9% 53.6% 55.2% 60.7% EBRI has earned widespr explanation of emplo ead r yee b egar enefd as it programs $7in ,49the pr 5 ivate and public sectors. The EBRI GIC Employee Ben 90 s ar 60s % e guaranteed ine v 28.6 fit Spec estment con 18% ialists. tracts. 2012. 29.4% Annual28.7 40P 1(k erc) ent Benc age h ofm arking 13.3%P Surve ercenty age 2011 of Edition. New York, NY: 57.3% Deloitte 14 Asset Alloc . 2003. “4 01(k ation and EBRI ) Plan maintains an Asset Allocatio Particip d ant analy n, Age Account Ba zes the mo lanst ces, and Loan comprehensi Activity in ve databa 20 se 02of .” $7Investment Company 401(k) ,346 -type program Ins s in the titute EBRI/ICI 401(k) Data 501–1,000 30 base ...................................................................................................... 34.1% 15.3% 6.1% 7.4% 2.4% 27.2 14.7% .................... 6 14.2% 40s 54.4% $40,000 34.8% bal8. an 2% ced f34. unds 0% eq30. uity 2% investment 3.8% inve 6. s5% tment$7 12. ,29 4% 2 equity6. in 4% vestm 4. e4% nt non-26.9 target-date balanc 22. ed6% funds 11.1% the case for Plan Sponsor Council 200 www.ebri.org/ 5 Form 55 the 16 yea pdf/briefspdf/EBRI_I 00 of rs tha Am Annual erica. 201 t the Redata ports 2. ba . Was 5se 5 Bth An _011-2 has tracke hinnual gt010_No349_EBRI_D on, DC: Su d rvey of 401(k U.S. ) Profit plan Departm par Sharin C te icipants, r IIA.pd nt o g a f Labor, Em n f d 4e01(k latively f ) Plans: R ploe yw ee B parti eeflecti ne cipants ma fits ng S e 2curity 011de Plan use of allocated to Other stable- 40s eq 62. v uity alue fu 2% 50s funnds inc ds 3.(Fi 8%glure ude synthetic 2 2. 17% ), whic 38.7% h is on GICs, 2.4% which consist e way t 1.7%o hold e of a portfolio 1.5% quiti 9.6% es. However, 1.6% of fixed-in $71. in ,19 26.5 2% c 1 dividual ome 22% securities 51.8% 1. asset a 3% “wrapped” with a llocations vari 1.4% 20.1% ed DistribIssue Briefs utio 250%n of Plans and ,EBRI Notes Participants, and Assets by Plan Size for our in-depth and nonpartisan periodicals. Definition of 401(k) Account Balance 50s Note:80 T% he tenure variable is gener ally year 30.3% s working at c 14.2% urrent employer, and t 4.6% hus may overstat 14.7% e years of par 8.9% ticipation in the 401(k) plan. 21.5% predate the 40 addition, based on Form 5500 data, ICI es ? N oA t401(k) parti e0% :l300% l “Funds”1(k) plan are n include 28 mu .9cipants cont % tual P fuln an d 3 o s, s 1 t included in this ban .3% k colinued to seek diversification of their investment lect 2i9 vetimates only about .1 tr% usts,analysis, which focuses on 401(k) balan life2 in 7 sur .4% ancP e ar sepa ti $730 million flowed ou 3 ci3 p ra .an 0 te% acco ts unts, 35 a .4 nd % any poo 603 sle 9t of 401(k) plans as t d in .3% vc est e amounts. ment A 4s 2 p s . 21% r8 et o% duc ss. t prThe shar 21% im 4 ar 7h il.y 6 e result of in % 21% veste of ed i 5n2 t.401(k) he 7% 59.9% 60.9% 63.0% 67.5% of their acco All unt balance in target-date fu25.9% nds (F (Median igure 37 Tenure: ). Fifty- 8 eYears) ight pe 13.6% rcent of recently hired part 60.5% icipants holding non– Inves With tm Compa ent Opt 22.4 ions ny Stock, by Offered by Part P Databook on E lanicipant Age m ....................................................................................... 32 ployee Benefits plans is a statistical r parteiferen cipant ce work on em s Percplo enty age ee ben $7 of,02 as efit program 7sets s Bogdan, Holden, and 2012). 60s Source1,001–5,000 : Tabulation worl s fr od. m EIts co BRI/ICI mputer Par35.1% ticipant -simul Directed a 14.0% Ret tion irem analy ent Plan se Dat s 5.6% a on So Collect ion cial Pro Secu 7.4% ject. rity reform 3.2% and retireme 16.4% nt income a 12.0% dequacy Consulting LLP. Available 21.3 at www.deloitte.com/assets/Dcom- $6,946 In a 50s give 53. Perspectiv 2% n age 30. grou 8% e 9, p, lo no. 9.8% $6 nger ,85, an 56 21.0 tenur 32.d 2% EB e t RI Issue e28. nds 5% to mean Brief, no. 3. that 7%261 a hi (Se 6. gh 9% p er te perce mber 16.2% ). Avail ntage 8. of 6% able partic at 5.4% www.ic ipants will i.org/pdf/per09-05.pdf hav 21% e accou 21%n 19. t bala 4% an nces 12. d 1% Figure As in seprevious cu A 8, ri gte yPerc indi Grca ou ent Ch years, the dat te p d.$6,81 ange i 5 n Total R abase for year eturn In -en dexes $6d ,83 2011 sho 9 ...................................................................................... 12 ws that participants’ asset allocation vari $6,846 ed considerably with 60s 37.7% $6,821 10.0% 52.3% 60s an organization that “tells it like it is 25.0% 12.6% Figure 13 18.3 3.9%,”18.4 18.4% 14.7% 20.5% 34 widely across this borro guarantee (typi Sources and SourAdministration Experience ce: win $6, Tab g 717 ul partici privil cat Types of Data ally by an ins io. ns C ege. At y p fhicago, ro ants. (Fe m EB bruary). For exam Ru IL: Pla Ie /rance company I C ..................................................................................................... ar-e I Par A n tic d 20 n vple, ip Spo ailable ant11, a -D nb ire sor Cou 21 out at or a bank) to pr cted percent www 49 perc Retn ire cil o .do men of ent of l.gov/ebs ft Amer P those e laovide benefit payments n partic Dic ata a. a/pdf/2005pen C ligibl oipa llece n tio ts hel for loans n Proje dc no sionplanbulletin.pdf t. had e according quity fu 401(k) plan nds, to the plan at book val wh lo ile ................ 6 ans outstandi 15 percent of n ug e. 50s Note: The an 64. 20 a <100 Participants lysis 9%includes 4.4 0% 01(k) plan 2. pa6% rticipa100–500 nts w2. ith4% two or few1. er 6% years o 501–1,000 f te 30% 1. nu5% re in the 2010 ye1. ar 5% indicate1,001–5,000 d a1. nd1% in a plan o1. ffe2% ring compa1. ny4% >5,000 stock as 17.7% 80% and work for $6,659 ce-related issues. converting a loan into a “dee accounts invested in comp 20% med distributi $6,64any stock remained at 8 p 4 on of participant loans.” See U.S. Departme 20% 20% e 20% rcent in 201 20% 1. Thi 20%nt s sh of Labo are has f r, Emplo allen by more th yee Benefits San half ecurity See Endnote Equity, bond, 11 for additional detail on target-date funds. money, and/or balanced funds 63. 8% 15.8 34.6% 27.8% target-date >5,000 ba Slanced f our ce: Tabul unds ations had mor from 35.8% EBc RI/IC e th I Pa an rti 9 cipant- 0 6.6% perce Directed nt o Refti rthe e 8.1% ment ir acco Plan D unt ata 7.9% bala Collecti nce on P inves rojec 1.9% t. ted i n 15.1 non–tar 19.3% get-date 15.0 16.5% balan ced As a cross sec The 20 a 33 11 EBRtIion, or sna /ICI are 40 uni 1(k que. ) p s database co hot, of the ent ntaiire ns informat population ionof on 40 64,1 1(k) p 41l 4 an p 01(k arti ) plans c50 ip sants, th with $ e 1 d.41 atab 5 tr ase in illion in clud assets an es 401(k)d 60s 47.2% 20s 24.9% 11.1% 27.8% 24.3% 57.8% 3.5% 11.2 14. 19% 3% % 21.3% 6. 2.1 4% % 7.8% 14 >.8% 20 Year19. s 3% 13.1% an investment option. 85.9% >30 Years 19% 28Plans With Company Stock and GICs, TheUnitedState analysis inclu All de s/ sLocal%20 participants w A itss h tets/Document w and/or Other Stable-Value Funds o or few 32.7% er years o s/us_consultin f tenure in the year g_Deloitte indi9.3% cated. %20401k%20Sur 58.0% vey_2011%250s 0edition_12082 age. greater The Van Younge than www.ebri.org/ Age Group guar $ dr Grou 100, partic 00 p. ipants 0. Fo pdf/briefspdf/0903ib.pdf 2012. r e t e How Americ x 19% nde ample, d to 1 favor 19% >0–50 percent 6 a peSaves 2 equity f rcent o 012: f u partici nd A s Re and pants port on bala in >50–90 percent nced th Va eir nguar funds, 60s with d wh 20five ile 11 ol Defi tder o 10 ned partici years o Contri >90 percent pant fbution tse were nure Pla ha more nd acc Da li ta. kely ount 70% 401(k) Account Balances Increase With Participant Age and Tenure a 11.6 12.3 6 • Visit EBRI’s blog. 18% Note: Pe 18% rcentages do not 18% add to 18% 100 percent because of 18% rounding. 10.9 18% 18% 18% (Fi Social Securi gure 4 250% 6). As ty replaces a m in previous ye uars, loan ch higher acti fracvity varies tion of pre-retir 10.3 with age, te ement earn nure, ings for lo account wer-income workers. balance, and salary. For example, t Of those he first- partici EBRI/ICI 401(k) Database 60spants he 67. ld more t 6% 9.7 h 3.an 7% 80 perc 2.2% ent of their 2.1% balances 1.4% in equity f 1.4%unds (Fi 1.4% gures 2 1.6 0% and 271. ). 1% Furthermore, th 1.3% e 16.9% Investment O Of w ph tions ich: t a............................................................................................................ rget-date funds an option 45.8% 26.9% ................... 7 21.5% Figure This b update e 34,All Ma ny Rec xtends previous findings from ently Hired 8.7 401(k 35.7% ) Plan the projec 8.4 Partic 7.6% ipants t for Hold Ba 1996 through 7.8% lanced Funds 0–2 7.9% 2010. For year-e Years ............................................. 2.0% nd 2010 res 19.0%u lts, see Holden, 16.0% 32 Administration 2012b. However, some loans are included in All 54. since 1999 2% 31.8% . Recently hired based on the f 7.2% 35.8% 401(k) partici acts 31.6% . As the Bylaws state: p 4. ants c 2% o rentrib gular plan di 6.3% uted to thi 13.1% stributions and cannot be trac s6. tr 1% end: They tended to be less likely to 4.5% 7.8 ked (see Holden, 24.1% 10.9% funds 20s at yea 30sr-end 20 10 11.82 .6% 30.4% 52.2% 20.8% 7.5% 15.8% 3.6 7.0 4.9% % 1.4% 7.1% 19.2% 16.0% 24.0 millio "Balan20s cn edparticipants funSource: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. ds” include (Fi mutg ua ure l fun 1 ds ). As is , bank co 14.8% the case llective trus in ts, th life e 4 insur 0an 1(ck) univ e separat e 10.0% e rse at lar accounts, g an e, d an most of the y poole 5.9 d inves pl 6.5 tmans in t 75.2% ent produh ce t pr dat imar aily base ar investede in a mix of equities and fixed-income Figure partici 15 p9, S ants napshot of Year-E who are young and t nd 401(k hose )wh Acc o are ount Ba new to t 17% lances h eir jo ........................................................................ bs, as well as older participants and those who ... 14 have been $30,000 Figure 50 5.5 5.2 011.pdf 70% 200% 4.9 40s 4.4 balanc 35 Poterba, . 2 es in Valley 008 Jame ex b. For Private cess of $ s, Steven ge, PA: Th Pensio 1 F. 00 V ,0 e n Pla e00 nti, a Van in ng B 20 n uard d ullet 11 Davi (Fi Grou ind A. ,g Abstract of ure p, Wis 1 Va 5nguar ). e. How 20 2 0 d006 7 e C . ver, 4 e “Rise o 4.3 Form nter for 4 4.6 perc 5 f 401(k Ret 50e 0 4.n Ann 3 irem t of ) Pl partic u e ans, Lifetime Ear al nt R Re eipa po search. rts nts in t . Washingto Available hnin eir 60 gs, and s with n at , DC: Wealth bet U.S. we e at n 20 to invest i Some record n fixe keepers supplyi d-income secu ng data were u rities such as bon nable to provide co d funds, 4.1 GICs an mplete asset allocati d other stable-valu on detail on e funds, or mon certain pooled asset classes ey funds (Figure 21). Plan a s Average 401(k) account balance, by age and tenure, 2011 >20–30 Years Distribution16% of Participants’ Bala Contact EBRI 2.5 nced Fund Allocatio Publications, (202) 659-0670; ns by Age fax publication orders to (202) 775-6312. perce partici year replaceme For an 30s np Sourc tage ants i anal e of : Tabulat nysis tracking t pla n partici t rate (scheduled Social Security benefits as n ios offerin nsp fants h rom16% EBRI/ g arget-date fun o loans, th ldin 24% ICI Pa g no rticipan 41.5% e e h q t-ui Direct ighest percenta d ty fun 16% use an ed R 12.3% d es varie tid th remen 16%e t P d pers ges w lan Da a percentage o ith istence ofta Colle pa age, 9.7% rticipants with 2.4 wi of ction th 67 their Pro f average c ject. percent use f 6.5% outs rom 20 are of pa tandin er earnings) fo 1.7% 07 rticipants in t throu g loan 2.1 gbalances h 8.7% 20 r retired worke 09, heir see 20s, 44 per- were Copelan 15.4% among rs in d All Equit 40s 30s y, bond, 60. A target-date fund typically rebalances its portfolio to become less focused on growth and more focused on income as it 8% money, 78 3. 4% and/ .7%or balanc 2.4% d ed funds 21.2% 46.4 2.,2% % 1.5% 6.3% 1.4% 11.3% 1.6%5.7% 1.1% 16% 1.3% 67.5% 201. .3% 4% 22.9% securities. VanDer Pierce, and Burham 2012). hold employer stock hei, Alonso, and Bass 2011. Results f . or earlier years are available i Figure 42 n earlier issues of ICI Research Perspective 44% About C EBRI make hanges in Account Balances s information freel ............................................................................................. y available to al 5% l. ............... 7 PLANS WITH COMPANY STOCK AND GICs AND/OR OTHER STABLE-VALUE FUNDS small: 46 perc with t . 2 h a eir 004 curr 60 a. %“40 ent em ent of the pla 1(k) ployers Plan A n for ma sset Allocati s have ny yea L 25 or oan on s fewer r, Account F s. Thes rom partici 4 e ann 0Bala 1( pk ants u)nces, an al u Pl, and 29 a pdat ns T e d Loa se of n pe d the n e rce Activity i d data t nt have 26 o bbas e S n e2 m provide 003. to all1 ” 0Investment Com 0 partic snapsh ipants (Figur ots of 401 pany (ke 2). In ) 15% >10–20 Years Balanced fund, 0target b “In all its activities -date fund, and non–target-date , the Institute shall balanced fund use varied somewhat by 15% age group among • 200% EBRI’s reliable health and retirem Per approaches and passes the target date of the fund, which is usually included in the fund’s name. centage of plans Subscriptions toe EBRI nt surveys ar Issue Briefs e just a click away through the topic boxes at are included as part of EBRI membership, or as part of a and for one or mor For example, 30 years 40s Minor i https://institutional.vanguard Departm Retireme 40snvof ten among e estment of their clients. The final EB e nt.” nt o uoption N re wit fpartici Labor, Em BER W s are n hp their ants in oo rking Pape t sho plo curr w th . n; there y com/iam/pdf/HAS12.pdf ee B 42.5% ent eir r 22.7% 20s, th e femployer , no. RI/ICI 401(k) data ore nefits S , ro 1 w perce 3 e avera 8.1% 091 e ha cu n (May trity A d age Figure g accou s w e a ). C d ill no base includ llocation mini na t ad t3 7.9% mbrid stration (Dece bd ato la t nce 10.7% 100 p g o es only plans f e, MA: equity an se g rcen reate 30 7.0% t. Per Nati m s r than ber). d conal en balance o tage r which at least 90 percent of all p Availa 1.8% B $1 s a urreau of Economi 00 e d dollar-w ble at f ,0u00 nd 66.6% . s eighted 12.0% Twas 7 he p av e5 rce ec r ages. perce Researc ntage 16.3% nt of h. lan 50s 74 40.6% 4.7% 7.8% 21.3% Figure 35, and Ma GIny Rec Cs and/ eor ntly Hi other .4% red stable 40value 1(k) fPl unds an Participants Hold Target-Date 33.9% Tenure (years) Fun 27.d 2% s ......................................... 32 24.3% Sources an partici the 1940–1949 pants in their birth cohort (individuals age d Types of 30s, 40s, or 50s Data (Figur de 47). 62 to 71 in 2 In addit 011) de ion, pa creased as income increased. The me rticipants with five or fewer years of tenur dian replaceme e or wit nh t rate cent of partici 2011. 60% pants in their 40s, an -0.814% d 5014% percent 14% of participants in 16% their 60s holding no equity funds. The percentage of Orders/ EBRI assumes 14% a public service responsibility to make its finding -1.6 s completely acce14% ssible 14% at www.ebri.org (20s www.ici.or 56. b 2%A g/r s25. s ee bsearch/perspective 4% t Alloc 8.2% a -2t .5i on 47. D 5% ist ) an ri -3bu .0 d 29. tEBRI Issue Brief i7% on of R17. ec8% ent(lww y H 2. w.ebr i3% red i4 .org 0 4.1 7% (/k p)ubl P2. a ications/ 5% rticipa 1.ib 3% nt ). Ac6. cou 7%nt B3. al 8% ance 22.0% 13.0% Figure Individual 10, 4 Dist 01(ribution of 401(k k) participants’ asset allocat ) Account Ba ion to lances, bala by nce Size o d funds f Account varied wi Balance dely aroun ........................................... d an average of 21 percent 15 at Age P Perc erc ent ent age of age of Ac10% el count igibl Be par alance I tic nves ipant ted in Non-T s, by partarget icipant -dat age, e Balanc 2011 ed Funds Deloitte contrast, only Distributio 100% 50s A Consu targe 50s tn -da of Plans, 2 percent lting t The analysis includes the 2.3 million recently hired participants (those with two or fewer years of tenure) holding balanced f e fun LLP an d typically of t Participan d I rebalan hn e vestment Co plans ce ts, and As s ia ts po have 34.3% rt22.4% folio more than mpany I sets by Plan S to become le 6.6% nstitut 2, ss fo 500 e. 2 cu ize sed partici .................................................................. 011. o7.4% n grow p Insi ant th 10.1% de the Struct and s. However, more 8.5% focused ur participants on e of Defin 2.2% income as i an e t approa d C 67.5% -419.8% d assets are .2 o unds in ntributio ches an ...... 7 d n/401(k 16.7% ) account Institute P balances, asset allo erspective cation, an 10, no. 2, $199 annual sub d an loan activity d EBRI Is scription sue Brief acro to ss wide , no. 272 EBRI Not cross sections of e s (A and ugust EBRI Issue ). Available participants. Ho Brie at fs. www.ici.org/pdf/ Change of wever, Address: the per10- cro EBRI, ss- 40s 50s recently hire 60sd participants, a 67.6% nd recently hir 35.0 ed % participants 13% in th 4.7% eir 13%20s 13% were more 8.7% likely to be highly19 concentrat .3% ed in increases to 45 www.dol.go the top of the page. 50 percent Of whicv h: /ebsa/pdf/2006 ta for rget-dat partici e funds pants i pensionplanb an opt n th ion eir 60s wit ulletin.pdf h more t 24. 7% han 30 years of ten 17.4% ure. 15.7% assets could be identified. assets, compared with 50 percent o 401(k) Pl f assets among part an Characteri icis pti ants in cs, by th Pl eir an A 60s. Amon ssets, g 2011 participants in their 20s, the -10 30s 56.3% 34.9% Age Group function strictly in an objective and 8.9% 38.0–2 3% 26.1%>2–5 12.1% >5–10 2.6% 6.>10–20 8% 3.Fi 3% 20g s ure >20–30 1.4% 35 5.9% >305.9% 20.6% 9.4% 401 more than for the lowest This pattern (k) pa ? Participants’ 401(k) loan activity remained stea rticipants holding n 30— household lifetime earnin years of t is driven in par so that all deci enure w to by equity fun seio restriction re ns less lik that gs q d u relate to emp s also varied s ely to intile was 70 percent; for the middl placed on loan amounts. use the wi loyee lo th ten an provision than ben udy, although loan re—par efits, ticipa wheth e quintile, the median oth nts er er par with made balances increased slightly tfive or icipants. Fift in Cong fewer ress Social Security e yeen perce or bo ars of t ard n et nur room of e wer s or e 60s 60s 50% 2011, the 1.7 million recently hired participants holding target-date funds in 2011; and the 0.6 million recently hired partici to Company Stoc -9.1k 27.7% in 4 22.3% 01(k) P 6.1% lans With Com 7.1%pa 9.2% ny Stoc 8.7% k, by P 2.4% articipant 68.5% 30.0% pants Age 14.4% passes the targe 150% t date of the fund, which is usually included in the fund’s name. 12% 12% year-en Several recor d $20, 2011 000 dkeepi (Figure n 401( g o 20 k r)gan ). Loan as For exam izations a 1100 13th St. NW, Suite 878, Washington, provided r ple, 44 percent ecords o of participants n active partici helpdants in no DC, 20005-4051, (202) 659-0670; fax number, balance 401(k d) fun plad ns, s at year-end 2011. while 31 percent o Th f ese Group Zero 1–10% 11–20% 21–30% 31–40% 41–50% 51–60% 61–70% 71–80% 81–90% 91–100% Plan 150%Fees: A Study Assessing the Mec -11.9 hanics of the ‘All-In’ Fee. Washington, DC: Investment Company Institute, sectional a concentrated i 36 Russell 20 02.pdf 00 nal In ysis is not w an nd lar e d xg www.ebri.org/p . Tacoma, e plane s. For ll suited to WAexample, 67 perc : F df/briefspdf/0804ib1.pdf ran ak Ru ddr 46.6 essing th sse %ll Cent omp e que oany. f partic s tion of t 6.9% ipants ar he im e in pact of pl 5.5 ans with % partici more t pation in han 402, 1(k) plans over 500 part 19.1% icipan t ts, and ime. 50 Al % l 78.2% a such fu Relationship o c nds. Total Pl Fo an r exam As f EBRI setsple, /ICI 56 401(k) Data percent of rec Total base Plans ently h Plans to t Tiored par tal Par he U tictiicipants pants niverse o in t f All heir 20s h T401(k) Pla otal Assee ts ld m *ns .................................... ore than Aver 90 age Ac percent count Bal of t anc h7 e eir 7 Figure Subscriptions 36, Equit Rec y, bond, e holding non-target-date balanced funds in 2011. ntly Hir money, ed 40 and/ 1(k or balanc ) Parted icipa funds nts No , w Hold Higher Concentrations in Balanced Funds ................. 33 average alloca 40s Target- 53.8% d All ate funds o 41. tion to 9% f 11. equ ten 0% iare ty funds used as th 27.7% was 17. e de 33 9% 19.7% percent of assets, compared with fault investmen 9.8% t in 2. automatic enrollment plans and 8% 7.10.5% 7% 5. 32 0%perc 1.ent of assets a 4% 7.8% in plans’ investment lineups 69.8% m 9.ong 2% partici 17.3% pants in 9.1% Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. GICs are families’ guaranteed inv $4ho ,400 m estmen es, are t contbased racts. on the highe st quality, most depe nda ble informatio n. EBRI’s Web 60s site posts Many Recently Hired 401(k) Plan Participants Hold Target-Date Balanced Funds Figure partici replacement ra The EBRI/ICI pin 2011. 11, ants Age wi 401(k) databa te was 42 percent; and for th th account Composition At year-end 2011, 21 percent 20s ba se environment lof Se a$3,426 nces of lecte (202) 775-6312 less t d 40e highest quinti $10,024 1(k is certified to han ) Accou $10, ; e-mail: of all 401(k) 00 n0 h t $15,146 Balance be le it was 29 percent. See Congressional Budget Office 2012. a fully compliant with the ISO- d loa subspartic criptions@ebr n Cate s outst ipants gories andin i.o ................................................. 15 who wer g. rg Me >5–10 Y embe eli 27002 Information Security Audit rsh gear ible for loan ip Information: s s had loan Inquiries s more likely not to be i Per nc veste entage of d in e Rq em uity aini fu ngnds. The percentage of participants ho Age Group lding no equity funds tends to fall as -20 32% 16 a c Percentage of recently hired participants in plans partici plan 20s recor p d ants h dkee epers 80. ld more t 6%unbiased manner and not as an advocate incluh 2. de an 3% 80 mutual perc 1.fun 7% ent o d co f their acco mpanies, 1.4% ins 0. unt 8% urance s in balanc compa 0.8%ed f nies, an unds at 0.8% d co thensulting fi 0. en 5% d of 20 0. rms. Al 1 5% 1 (Fig though ure 0.4% 31 the ). At y EB 10.e 1% RI/ICI ar-end $0–$250,000 10,995 90,610 $1,107,875,896 $4,167 $12,227 these same pl Minor investment options are not shown; therefore, row percentages will not add to 100 percent. Percentages are dollar-weighted • 80% T and e and Need a number? Check out the nure Ne com (ans account y w ea pany Row percentages may not add to 100 percent because of rounding. York, NY: rs)stock fo De r 71 percent loitte Consulting LLP. Availa of all EBR plan a I Databook on Employee Benefits. ssets. Because most of the 0. ble 9% at www.ici.org/p 13. df/rpt_11_dc_401k_fee_stu 9% plans averages. have a small 14.numb 7% dy.pdf er of Cross sections chan For 401(k) asset figures, see In . 2010a. Private gePensio in composition ove n Pla vestment C n Bulletinr, time o Abstract of mpany Institu -2beca 0.5 use the 2007 te 2012. Form select 5 ion 50 2011 of $4, 0 Ann 089 data ual provi Repo ders an rts (Version d samp1. le4) of . Washingto plans using n, a DC: 50s 49. Because 3% 39. few 8% plans fall 13. 8% into thi21. s ca 6% tegory, the 13. s3% e pe-2 rce 2.1n tages may 8.3% be heav 3.3% ily influenced by 9.5% a 5. fe3% w outliers. 1.4% 11.8% 16.6% 14.5% 8.5% account Relationship Between Account balances in balanced funds, compared Balances a with 46 n percent d Salary of recent hires in their 40s and 45 percent of recent The Typical 40% all 401(k resea ) Plan rch finding Participant s, publi ........................................................................................... cations, and news alerts. EBRI also extends its e $3 d ,97 uc 2ation ............ 10 and public service (see Plan Spon their 60s. Youn sor Council of ger parti 401(c kipa ) Ac America 2012). At year-end 2 nc ts had much ount B regarding alance high EBRI 2010 er al membership an locati 20s 011, 72 pe ons to ba d/or con lance rcen 40s tt of target-date mutual fu ributio d funds, ns to EBRI-ER partic a,b60s ularly to F should be dir targe nd a All ssets were held in DC t-date ected funds. to EBRI A b $3,902 $3,893 $3,889 standard. More 40% over, EBRI has obtained a a legal opinion that the methodolo $3,832 gy used meets the privacy standards of the Gramm- salary increas outstanding against their 4 es (Figure 27). $3,824 01(k) accP ounts, unch ercentage o anged f recen from year-en tly hired pard ti 2009 and year-end 2010, and up cipants, 2006?2011 A target-date fund typically rebalances its portfolio to become less focused on growth and more focused on income as it approac 100% 30s $8,745 $20,425 $34,450 $52,583 hes and passes the target date of the fund, $3,785 > Age Group $250,000–$625,000 0–2 Note: “Funds” include mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investment product 85.6% 27% offering 9,491 >0–50 percent co60.5 mpa % ny stock 159, a029 s a 13.1 n in % ve>50–90 percent stme$4,027,629,392 nt op2.0 tion % , 2011 19 >90 percent $25,326 10.1% 201 project has S&P . 1, 500. Ne 2 56 004 perc b. col w Of ent of “Ap lYork, NY: Sta ected dat wh pic en h: 4dix: 0 ta1 rget (a Ad k) fro -dat partici ditional nm dard & e 19 funds p 96 ants h F throu Poor ian gur opt e e ’s. s ld bala g ion for th h 2011, t nce e EB d h f R e unds, Iuniverse o /ICI 0.7% u Partici p from fp da an the ta provi t-Direct 5311. percen d ed Ret 1% ers m t of ia rement y vary from partici Plan pan Data Collect y ts holdi 10. e7% ar to y ng ebala ar. In ion nced 60s30s 38. Note: “Fund 0% 31. 80. s” i 4% 2% nclude mutu 14.3% 3.9% al fund 18.s, b 0% 2. ank 9% coll 10. ectiv 2% $3,7 2. e tru 0 3% 0sts, li7. fe8% insuran 1.2% ce 2. sep 6% 0. arate 9% accoun 9.9%0. ts, an 8% 4.d any 9% pooled 0. 1. 5% 6%inv 40s estment pr 27. 0.8% 5% odu28. ct prima 0. 4% 4%rily in 10. ve 7% 6. sted 5% 8.9% Figure 37, Ma-30 ny Recently Hired 401(k) Participants Hold High Co $3,ncentr 661 ations in Target-date Funds .............. 34 given 29 partici provi pants, t U.S. De derh vary from partm e asset size ent of yea Labor, for many r to year Employee $3,6 plans an 59 d Form is modest. About because 401(k Ben 5500 efits Security ) partici 17Administration perce pants j nt of t oin or >2–5 Y he (Ju leave pl plans ear ne s) . Availa have assets of ans. ble In additi at $2 on, the 50,000 data or lba ess, se role to improving Ameri Zero President Dallas cans’ finan cial Salisbur kn 88% owle y at th dge e above thro 75% address, ( ugh its a 202) 659-0670; ward 87% -winning e-mail: publi 79% salisbur $3, c se 619rvice y@ebri.org campaign or opponent of any position.” hires in their 100% 60s in 2011 (Figure 38). Concentrated target-date fund use ranged from 43 percent of recent hires in their Figure plans (see Inve target-date, which is usually included in the fund’s name. The ratio of 401(k) account balance (at th 12, Tenure Com orstment Company Institute 20 lifecycle, position of Selected fund pursues a lon e current employer) 12). Plan Spon 401(k g-term ) Acco invest unt Bala sor Co ment strategy, using a m to salary alone is not an uncil of nce Cat America 2012 r egories ............................................ ix o eindicator of pre ported an increase in the inci f asset classesp that aredness for follow a 16 dence 20s primarily invested in the security indicated. 11.6% 10.2% a 78.2% a Participa Average Loan Balances Year-End in th >n $625,000–$1,250,000 >2 $10, e ts’ a 2011 Snapshot o se –5 curi 000 ccount ty indicabalanc ted.38 f es vary not 401(k) Partic 9,665 on ipants’ Account 53.1 ly with % age a 259,013 n d te Balances 11.1 nure, % but .............................................................. also with $8,810,480,199 3.1 % salary. Figure 16 reports the acco $34,016 15.2% 10 unt Leach-Bliley Ac 17 from 18 perc t. At no time has any nonpub ent at year-end 2008. Loans outstandin 82.6% lic personal information that is personally g amounted to 14 percent identifiable, such as a Social Security of the remaining account ® -33.8 Employee Ben A A c lg l e 54.1% 37. efit Research 3% 40s 10. H1% o >10–20 ldin I gn 28. $14,582 B stitute. a 6% lan Years ced2 18. Fun 003% 5 d$29,162 . s “History 10. of 3% 4 $48,899 01(k 2.) Pl 4%ans8. :$84,757 An 0% U Hpdat o2. ldin 4% g e .” Tar $128,158 FAC 1. g4% et-T DS from ate 10. Fun 1% dEBRI s 12. . W 6% ashin 18. gt6% on, DC 9.:3% Holding Non-Target-Date Funds • E Pquit Instan roje y,c bond, t ftly ge or Year- money, t e-m En and/ d 20 ail noti or 03 balanc .” Investment Co ?ed cations of the latest EB Pe funds rcen,t age ompany I f Accounn t stitut Balan RI data, e Pers ce Invepective stesurveys, publications, and m d in C 10, ompno. 2A any Sto (A ckugust). Availabl eetings e at funds additio Estimates of 40s at yea n, th 30 e s r % -end 20 80. a the number of mple 0% 1 of 10. –10pla 4. % 3% At year-end 2 ns401(k) plans a at any 3.3% give 0n 1 provi 1 n2. , ba d active participants 7%lance der cd a 1. n 4% fu 2% chan nd use ge. T 1. are base by part 0% hus, 7% aggre ic d on a combination of data fr 0. ipants occ 9%gate figures in 0.u 5% 5% rred through tar this r 0.4% 6% eport gener om U.S. Department g0. et-date fu 4% ally 5. nds 1% should and GICs are guaranteed investment contracts. and a n 60% other 30% 3C0h poosetoSave ercent have p and lan assets the companio between n $ site 250ww ,001 w.c an hoo d $1,2 setosav 50,0 22%0e.o 0>2–5 (Fig rg ur Years e 3). 34 contains only www.dol.go 30s the acco v/ebsa/PDF/200 unt balances h 7pensionplan eld in 16.8% the 401 bulletin.pdf (k) plans at partici10.4% pants’ curr -37.0 ent employers. R72.7% etirement savings held 30s 20s holding m -40 ore than 90 percent of their account balances in target-date funds to 36 percent of recently hired retirement. A complete analysis of preparedness for retirement >$1,250,000–$2,500,000 >5 50% –10 76.7% b 9,917 40.7 24% % 475,5685.5 would require estimating projected balances at retirement by % $17,815,180,285 4.9% $37,461 25.6% of automatic enrollment in 2011. Of more predetermi Asset A ned reallocat llocation o ion, t f 40y 1pically r (k) Plan eba Pa than 800 pla larticipant ncing to shi n ss s With ft i urveyed, 45.9 ts focus from o ut Equity Fu percent had growth nds to i an uco tomatic enrollment in 2011, me over time. At year-end compared 2011, Among Group partici 2006pants 2007 with ou 2008 tstanding 4 2009 01(k) loans 2010 at th 2011 e end of 20 2006 11, 2007 the aver2008 age unpa 2009 id balan2010 ce was $7 2011 ,027, 2006 2007 2008 2009 2010 2011 Sou number, been t balanc Schrass, Dani rce: Tabu es of lations from EBRI/ICI Parti loel, Mich nger ransferred to or shared with E -ten ael ured Bo cipan gdan, partici t-Directed Reti an pants at d Sremen ara their h Holden. B t Pl RI. an curr Data Col ent 20 lecti 12. em on Proj ploy “Ow ect. ers nershi ’ 40p 1(k of) p Mutua lans. R l Fu etireme nds, Sha nt savin reholder gs hel Sentim d at pre entv , and ious Note: "Funds" include mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investment product Factors That A balance, on and company ffect average, st 401(k) ock, and P at year-end 2011 GI articipants’ Ac Cs and/or count Ba , unchanged lances ..................................................................... from year-end 2010. Loan amounts outstanding primarily invested in the security indicated. .. 10 Editorial Board: Dallas L >10% . Salisbur –20% y, publisher; Stephen Blakely, editor 2% . Any views 5% expressed in this p 3% ublication and th4% ose of the authors should A Figure ge Gro38, u Employee Ben p40s Asset Allocatio Zero50s e 1–10% fit Research n Distribution $20,623 11–20% Institute (Febr of18.4% 4 21–30% $35,496 01(k) Acco uary). 31–40% unt $55,571 Avai Balan labl 41–50% ce e to at Ba $97,006 www.ebri. 10.3% 51–60% lanced org/pdf/public Fun $175,962 61–70% ds Among R 71–80% ations/facts/02 $200,908 ecent 71.2% ly Hire 81–90% d 05fact.a.pdf 91–100% not be used to non–tar of Labor, Bureau of Labor St www.ic gand sem et-dat estimate t i.org/pdf/per10-02_appendi e ba inars by clicking on the “Notify Me” or lancedime trends. Re fu atnds: 3 istics, and U.S 9 perc cor ex .n Department of .dt of pdf s we 40 re 1(k encry ) partic pLabor, Employee Benefits Se ted pr ipants “RSS” buttons at the top of our ho ior to helid n tar clusion get-date in th feunds, curity data Administration reports; base to 20 30% perc c ent h onceal t m eld non e page. he ide –target- and ntity 50s 80.0% 4.4% 3.3% 2.9% 1.6% 1.1% 1.0% 0.5% 0.4% 0.4% 4.4% a in plans at >10 pr –20 evious employ 72.0e % rs or rolled ov 31.5 er into % individual ret 3.4% irement accounts 11.0%(IRAs) are not include 26.0% d in the Figure 13, >$2,500,000–$6,250,000 401(k) Account Balances I10,430 ncrease With Participant A 992,902 ge and $41,471,378,582 Tenure ............................................ $41,768 16 20s 48.5% 51.1% 63.6% 64.1% 69.6% 72.0% 29.4% 31.7% 46.5% 48.5% 52.0% 53.6% 22.5% 21.8% 19.3% 17.7% 19.0% 19.5% Th partici e analysi ps i ants i s based on n their sampl 60s. In es of 1.2 m additio illion partn icip , at ants year-en with two ord fe2011, wer years51 of teperc nure in ent o 1998 an f the acco d 3.4 millionunt particbalances o ipants with twof o re r fec we erntly h years oifred par tenure in 2011. ticipants 13 perc Participa also considerin with 41.8 percent of plans in not be ent n ascribed to the officers, ts w of 401(k) ig retirement income from Soc th no equity f assets in 2010, 38.4 percent of plans in und bala trust the databa ees, nces membsmay still hav ers, or ie al Security, de wasother sponsors of the E investe e d in exposur fined benefit pl 2009, 39.6 percent of plans in targe et-dat to t mploye he f ans, IRAs, and e stock marke eunds. Amo Benefit Research ntother DC plans g 2008, 35.6 percent of plans in through com partici Institute, the EBRI Educ pants p ,in th possibly from any stock or eir 20s, ation and 3 1 per- ot50s her stable value >20–f30 unds % 18.2% 2% 1.4% 4% 9.9% 0–2 Y 24.ear 3%s 1% 71.8% 3% 33.2% compare employers or 20 d wit % 20% h -50 amounts rolled over $6,846 in the year to IRAs -end 2010 data are not i base (Figure 48 ncluded in the a ). Th nale ysis. To capt median loan ur bala e as lo nce ng a s outstandin avings h g was $3 istory as ,785 at increased slig Use of the Inthtly from those at year ernet, 2012.” ICI Resear-en ch d Perspectiv 2010. e 18, no. 6 (November). Available at www.ici.org/pdf/per18- 20s 73.8% 4.4% 3.5% 3.1% 2.9% 5.4% 1.8% 0.6% 0.4% 0.4% 7 3.6% Definition of 20, Participa 21 401(k nts, by Participant A ) Account Balance ge .......................................................................................... .............................................................................................. ........... 10 ...... 35 b . 2010 >20 b. 50 –30 % Private 60s Pensio 65.7% n Pla $25,678 n Bulletin 23.7 , $36,949 Abstract of % 2 $53,063 008 4.2 Form % 55 $89,568 00 Ann 30s 15.1% ual Re $159,447 ports (Version $208,892 1.22 0).8% . Washington, DC: of em date consistent plans in the EBRI/ICI data EBRI is sup bala ployers >$6,250,000–$12,500,000 nced and fund employ ported b s, and ee 3 sperce , but y or n wer ganizations from all industries and sectors that appreciate the value of t h base. See discussion in Endnote 2. e 5,261 eld co bded oth. so that 1, bo 095,474 th could be tracked $46,032,866,859 by researchers over multipl $42,021e years. Data Relationship of EBRI/I 30s 60s40% 47.9%81.5% 54.2% 3.8% 59.6% CI 401(k) Database 2.6 7% 1 a.2% 2. 63 6% .0% 61. 8.5% 1% Plans to the Universe of All 401(k) Plans 281. .51% % 35.1. 1% 0% 43.50. %5% 47.3% 0.4%47.8%0.4% 52.1% 4.5% 22.5% 22.2% 18.8% 16.4% 16.9% 17.6% 8 0% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Nov- Mianalysis. nor inResear vestmen ch Fund, 60s t opti Furthermore, ons are n or their ot sh staffs. own ; th a Nothin ccount balanc erefore, row percen g herein is to be co 17.6% tages w es are net ill n nstr otued as an attem add to 100 percen of unpaid loan pt to aid or t. Percen balances. B 8.9% tages are dol hinder the adoption le ar-wei cause of ghted averages. of a all ny thes pending le 73.5% e factors, gislation, it is regulation, not $0 >30–80% 4% 8% 3% 7% in th Distrib eir 20s utio w Of a n s invested of Partici which: target in -dat balanc pants’ e funds ed fu Co an nd opt mpany Sto s, compare ion d c with k Allocati 1.0% 44 24% perceons nt in 2010, 12.7% 42 percent in 2009, 18.36 5% percent in 2008, previous employment. For references to such research, se Account balances are net of unpaid loan balances. Thus, eunpaid lo MacDonald a an bal na d Moore 2011 and Holden an nces are not included in any d Van of the eight as Derhei 2005. set cent of th balanc 2007, about 17 ed fu eir nds, which 401(k percent of plans in 2005, a ) assets was invested in include target-datn ed 10.5 percent fun target-date fu ds. Indeed, of pl nds; amon 78ans in 200 percent g o participants 4. Eighty-two p f 401(k) part in t ice ipants hrc eir ent of plans 60s, with 11 percent no with automatic equity f of t unh deir year-en Fidelity I d n2011, compared vestments. 20 Source: Tabulations from EBRI/ICI Participant-Directed 201108.wi “Impact th $3,619 i of Ma n trket he year Volat -eility on nd 2 Retirement Plan Data Collection Project. 010 20sPartic dataipant base. Exchange Beh Nevertheless, the avior.” ratio o Buildin f th ge loan Futures: outstan Impact of ding possible, 30s . 206.pdf 004 >3 only longer 0 c. “Contributio 70 .0% -ten 6.ure 6n %B de partici havior o 5.0p %ants f 401 18.7 are inc 4 (k) Plan .0% % luded i Parti 3.0n % c this a ip7.0 ants D % n 4.alysis. However, 1u % ring Bull 1.820.0% % and Be it ar 0 is .7 important Markets.” % 0.6 to Nati % note 14 onal Tax Asso .6% 2012 0 that t .4% he tenure 3ciation .8% c 60.3% >$12,500,000–$25,000,000 3,351 1,351,083 $59,194,497,815 $43,813 40s 4 cAll 6.6% 52.8% 57.8% 59.3% 15.8% 59.9% 65.0% 27.4% 10.2% 34.2% 41.8% 45.5% 474.0% 5.3% 49.5% 21.3% 21.4% 18.3% 16.1% 16.1% 17.1% A target-date fu Figure provide unbiased, reliable information on emplo or interpretative 14, d U.S. De for n 401(k) Account d typi ea cal partm ch participan ly rebal rule, or as e an nt of ces i legal, B ts portfol Labor, t inclu alances Less acco 24% io to become l unting, de Employee d dat actuarial, o Than e ess focu ofBen birt $10, sed on r other such prof eh, f fits 000, growth rS om yeee b curity Administration by Partic an whic d more focu essional advice. enefits. h aipa n a sed on n gt e Vis Age a grou in ww come as i it w. p is www.e n (D d Te ebri. ecem t approac assigned; onu rg b re ri.o ber h............................... es an r)g . Available date o /about/join/ d passes th f hir e target date of th at e, for more. from w 19 hich a e fu nd, wh ich Size All of 401(k 10% 80. ) Account 3% 1996 >80% 3. 1997 9% Balances 1998 2.9% ............................................................................................... 1999 2000 2.5% 2001 There’s lo 1. 2002 3% 2% 2003 ts more! 1.0% 2004 2% 2005 0.9% 20060.2007 5% * 2008 0.5% 2009 1% ............ 10 2010 0.4% 20115.9% correct to All presume that Note: At year-end 2011, the average account balance among all the change in the average or median 24.0 million 401(k) particiants was $5 account balance for th 8e data ,991; the median account base as a whole reflects the 10% 100% 100% 100% The 2011 EBRI/ICI EBRI/ICI 401(k) database is a representative sample of the estimated universe of 401(k) plans. At year-end categories described. 28 18 percent in 2007, 24 percent in 2006, 19 percent in 2005, and about 7 percent among that age group in 1998 (Figure 401( allocation enrollment in 2011 applied au 40s ? k ) assets The year-end 2011 aver had 68was invested investments in .6% 6.9% in target-d tomatic enroll eith5 er com .2age account % ate fund pment only to new hires, while an 4y stock or .5% s. balance in t 3.ba 2%lanced3 f .h 7 unds % e database w 18 percen at year-end 1.7% t ap 2 a0 plied automatic enrollment to s 2.2 percent low 0 .811 % (Figu0r.e 6% 28). For 0e .5 exam r t % han the ple, all 4 .3% > Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. $25,000,000–$62,500,000 All 78.2% 2,452 46.6% 2,148,257 6.9% $95,359,396,617 5.5% $44,389 19.1% is us variable is th Participa to the Fig ua 50s u lly re incremain 39, lMarket Vol udn 4 ets’ al 7 d Ave .i8 n t % e time t h in e locations to co rage As g acco fun5 d’ a 3 s n tili .4 h ame. % ty unt at i se(D tn All ba 5 di ecember). Boston, MA: 8viduals o lance r .0 mpany stock r cation of % 5 ehave 8 main .7 4 %0e been 1d (e k) 5 th maine 9 Accounts .1 e same with % Fidelity I d i their 6n 4 in l .2 ib n % 201 current y e Partici w nvestments. 1 i2th 8(Figur .1previou employers and may % pant A es 3446 a s g . 9 years. Thi e a % n nd 4 d4 Inves 29 .2). % In rty-ei tnot reflect t ment O additi 45 g.ht 2%on, perc ptions as i 4ent 5 h.e length of tim 0 n % Among (or previous yea 9.2 49.2 mill % io 2 e n) o r 1 they s, .4 % f 21 .2% 18.1% 15.5% 15.5% 16.5% Target The latest av -date fu Proceedin nd use ailable data from the Departm gs, Ninety varies with partic -Sixth Annual a ip Conf ane t age a nt of Labor ar erenn ce on d te23% nure. Ta e for plan year xati Youn on, Nov ger partic ember 2010 (see U.S. De ipants 13–1 5, 2 were 00 more 3 partment of , Chicago, likely to IL: 4 Labor, Employee hold tar 4–53. get-date Sources: balance wa Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. Bloom s $16,649 berg, Barclay . The tenure variable is generally years working at current s Global Investors, Frank Russell Company, and Standard & Poor's employer, and thus may overstate years of . Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. www.dol.gov/ebsa/PDF/2008pensionplanbulletin.pdf tenure 39 ran a ge i Of s assigned; which: target ou dat tstanding loan e funds an opt bala ion nce; funds in the participant’s investment portfolios; and asset values 20% a 72.2% 68.1% 66.3% d Relationship of Age and Tenure to Account Balances 20s ............................................................................ 9% .. 13 For an analysis experienc The analysis includes the 0.4 million recently hired participants (those with two or fewer years of tenure) holding balanced f e of “typical of the possible impact of The S&P ” 401(k 500 is an index ) plan of 500 stocks parti automatic increases in participants’ contribu chosen cipants. for market size, liquidity, and industry group representation. tion rates in automatic enrollment pl unds in 1998; the 1.4 million recently ans, a <0.5% GICs are gu 39). 201 60s 50s 1, al At y Saran > ol $62,500,000–$125,000,000 u 4401 r5 e ce teed i .ar-end 20 5 : 0% % 6 Ta (k) plans h 8 nb .vestmen 7 u participation in the 401(k) plan. % la 5 ti0 o.n 1t con s 11, % fr7 oe tracts. . am m 1 ld % 5 E3 B a total o ong r .RI 9% /ICI5 P e.cently a 1 5rf 3 % t i.c $3.2 6 1,043 ip % an h t- trillion Di ired partic 4 5 r.5 e 5. cte % 2% d in Re asse t1, 6 iripa 3 e 0 959,335 m ..2 7n e % % ts, and t nts in t Pla2 nth 6 Da .3 1 eir . ta h % 6e % Co 20s, da lle 3tabase r cti $90,984,418,266 2 target .1 o1 % n. P 5r% o je -date 3 e c8 pres t. .4%0ents abo fu .8% nds accou 41.0%u0t 4 .64 % n 4 1ted for $46,436 .7 perce % 0n 4 .78 percen 4 t of 6% .5% that1 4 9 .t of 5 .8 % % 20.3% 17.3% 14.2% 14.5% 15.4% U.S. Deyear before, partment of Labor, but may not accurately reflect th Bureau of Labor Statistics. 2007. Nat e experience ional Compensation of typical 401(k) participants in Survey: Employee Benefits in 86 nonparticipants. perc The analy ent o 0%sis includes the 24.0 m f partici * Less than 0.5 percent. pants in their illion 401(k 20s ) plan partic Visit EBRI on-line today: without e ipants in the y quity fun ear-end 2011 E ds held equitie BR www.ebri.org I/ICIs through 401(k) database. com pany stock, balanced funds, or there is variati 401(k) Pla 19 o 96 bn aroun n 19 P 97articipants d t 19 his 98 average t 19 Wit 99 h 20 Two or 00 hat corresponds 2001 Fewer Years of Tenure 2002 with a 2003 20 g 4% 04 e (lo 20 w 05 .......................................................... 36 er the ol 2006 der 2007 the 20 partici 08 20 p 09 ant)20 , t 10 enure (lower 2011 the Figure have the 40 partici 1( 15, Washin k) parti 401(k) Account patgton, DC: National ed i c Tihe Russell pn an ats 401(k 2000 in the B Index ) a 20 lances plan measures 11 (particu T EB aGreat the perf x R Association I/ orm Ie CI 4 larly amon r Th ance of 01( an the 2,000 .k) $100, d g ol sm ata allest 000, der base U.S. by partici com were in Partici panies pant (based p plans th sant A since on total g me at offered com arket 401 an capitalization) (k) pla d Tenur nis w e ncluded in ......................... p eany re the in stock as an Russell troduced on 19 ly about 8 funds Benefits Security Administration 2012b). EBR than I Issu older pa e Brief is rrticipants. At year egistered in the U.S. Patent and T -end 2011, radem 51 ark perc Office. en I t of SSN: 0887 participants in t ?137X/90 0887 heir ?13 27X/90 $ . 0s held tar 50+. g50 et-date funds, hired participants holding balanced funds in 2006; the 2.0 million recently hired participants holding balanced funds in 2007; the 2.4 million recently hired 9 Source: 0% Tabulations from EBRI/ICI 401(k) Participant-Directed Retirement Plan Data Collection Project. attributed to those funds. A 0–2 n account bala >2–5 nce for each >5–10 participant is th >10–20 e sum of the >20–30 participant’s assets in al >30 l funds. Note: “F b un16 da s” include mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investment product primarily invested in the security indicated. All >$125,000,000–$250,000,000 47.6% 52.7% 59.9% 60.9678 % 63.0% 2, 67 253,296 .5% 28.3% 3 $117,795,073,319 3.8% 43.6% 46.6% 47$52,277 .6% >30 51.2% 21.9% 21.7% 18.7% 16.5% 17.0% 17.8% see Van The cross-sectional analysis for this pu 60s A D terhei arget6 -9 da and Copeland .3000 Index 2 te % fund Note: Column percentages may not add to 100 percent because of rounding. 0–2 t y (w pi 6 hich c.9 all % tracks the 3,000 largest U.S. com y re 2008; Va balanc 4. e7 s>2–5 % it nDerh sblicatio portfe o4 i 2010; and lio .0 n fo panies). t% o be und that c c o >5–10 m2 e .le 8 VanDerhei % ss fo onso cusl ed 3 idating the mu . 2 oa % n ngr >10–20 d Lucas 2010. For a discussion of the variety of f owth a 1nd .5 % mltiple accounts across a ore foc0 us >20–30 .8 ed %on inco0 m.6 e % as it ap majority of the pro 0ac .5%hes and 5a .8 ctors % Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. 45 total. Gustman, Al Relationship Row a percentages m The da antabase also 27 L., and Thom Between Acco ay not add to covers 47 as Steinm 100 percent because of roundi unt Bala perce nces a eier. n 2008. t of nd Salary the “Ho univ ng. w .............................................................................. C erse of hange active s in Soci 401 al Sec (k) plan urity A participants ffect Rece an nt Ret d more irement than .. 13 Trends.” 10 per- Asset Alloc their balan Private I participants holding balanced funds in 2008; the 1.9 million recently hired participants holding balanced funds in 2009; the 2 ced fun an tion and Investment dust d assets, or 40 ry in the Un percent ited Stat es, Marc of the Option ir acco h 2007 s unt ba . Washi lances ov ngton, erall. DC: U. The S. Department increase in .0 million recently hired participants asset of La allocation to bor, Bureau o balance f Labor d both. In 2011. deed, 58 To un c perc derstand changes in 401(k ent o Less Than $10,000 f participants in their 20s wit ) participants’ hout eq aver uity fun age ds hel account balanc d target-date More Than $100,000 es, it is importan funds—which ten t to an d to be alyze a >$40,000–$50,000 31 y high investment o e er th ars ago A e te target-date Sour n ) p.u tion (Figure 22). Amo cre o e: T Form fund abulations erly f th ty the pi e Lehm cal part frlom y an rebal icipant the EBRI/ICI Brothers U.S. Aggregate ances )n , ac itg thes s 401( portfol cou k) Par ie partic n o Bond Index tt ba to icipant becom lance -D , ipants the Barclay ire eclted e (lo ss Retir focused , 74 w s Capital U.S. Aggregate er t em percent ent h on e Plan grow higher Data Collec th hand e the ld 20 Bond Index mtion o account re percent Pr focused is ojcom ect.posed on balance or less o iof ncom securit e ias es cov ),f it th approac ering and eir account salary (lo hes ba wer la t nces he compared . 2011. Accwit ount P bal h rivate P 32 ances percent o are par etnsion icipant acc Plan f ount participants i balanc Bu es lleti held in 401( n, Abstract of n k) their 60s plans at the partic 20 ipant (Fi sg 09 ' cur ure rent Form em 3pl 1 oy ). er55 Rec s and 00 are e Annua ntly h net of plan lired par l R oans.e Ret por iremt tent s (V icipants saviersion ngs held i wer n pl1.0 ans e at ) more like pr . Washington, evious ly to hold DC: c passes the target date of the fund, which is usually included in the fund’s name. Source: Tabulations from EBRI/ICI Participant-Directed Retirement PlanS Da ala ta ry Co Ra lle nctio ge n Project. 37 >$250,000,000 858 13,198,831 Years of Tenure$932,197,466,769 $70,627 Plan bala holding balanced funds in 2010; and the 2.3 million recently hired participants holding balanced funds in 2011. nces are construct 17 ed as the sum of all participant balances in the plan. Plan size is estimated as the sum of Size of 401(k) Account Balances A Al target-date fund ty l 0% 70.gov 7% ernm pical ent land corporate bonds, y6 rebal .1%ances it4 s portfol .6 m% ortgage io to becom -backed 3.9securities, %e less focused on grow and 3.asset 0% Years of -backed securities (rebalanced m Tenure 4.3 th and m % ore focused on i 1.7% onthly by m n 0 arket capitaliza com .7% e as it approa tion). T 0.5% he ches and passes the target index's total 0.4% 4.0% 19 providers to the single individual owning the employers or rolled over into IRAs are not included. m resulted in >5–10 an overall increase of 6 percent Years in the average 401(k) account (e.g., taxes, savings, mortgages, children At year-end 2011, 63 percent of non–targ ) that impact replacement rates, see Brad et-date balanced fund assets were assumed y 2010. to be invested in equities (see For an analysis of the impact of a and passes the target date of the fund, which is usually included in Siz the e of fund’ Acs c ount namBalanc e. e Figure The investment optio ce funds nt of al mostly 40, NB l 40 Rec ER W 1( occurred in ek) p ntly Hir orking Pape lan ns. s tha ed 401(k th The distributio t e target-date r a , no. plan offers significantly ) Pl 14 an 105 Parti (J n f und cate of assets, part une cipants ). Ca Ten gory: mbridge, a d t ffe icipants, a T oarget Be ct MA how Less Like -date : Natio pa nd pl rti fuc nnd assets acco ly to Hold Co ipants a al ans in Bureau o the dat llocat f Econo mpany Stock ea unted for the base ir m 401 for ic Researc 35 (k) 2011 is simil ................. 37 percent assets. Figur h. of t ar to he e the 22 Year-End Figure Because of t . 2a sample of consi 16, Statistics. Available 005. bb 2011 Snapshot o Median 401(k “T hhe ese changes in the cross sections, comparin Influenc )s Ac e ten at f 401(k) of Automatic count Ba twww. participants. Partic bls.gov/ncs/eb lance Among Longer ipants’ Asset Allocation Enrollment, As with s/sp/ebsm000 previous EBRI/ICI Catch-Up, g average -Tenured Par an 6.pdf ............................................................... d I acco RtA Contri unt balances icipants, by updates, butio an A a nc g s on alysi ro e a ss different year- ns 401 d Salary, of a s (k) Accumulations ample o 2011 end cro ..... f consi .. 17 20 ss- at stent highly conce Note: Cn om trated po return consists of nentin s mequity ay n price appreciation/depreciation ot add securiti to the tes for otal in the that age plus incom first coe lum as grou a percentage n becp— ause as their only equity inv of o the original inv f rounding. estm "Funds ent. ” include estm mutuaent. Another l funds, bank coll 11 percent ectiv e trusts, of life high A tae rgr th et-dae Tte he s f par u am nd plt t e of icipant yp par ically ticipant r’e s salar sb ca hanges lance ov y s its ). Overal er tim pe. ortfolio tl, lo o beco ans from me less focu 40 se 1(k) pl d on groans tended to wth and more focuse be small, d on incomewith as it the vast approaches a majority of 401( nd passes the target k da)te of the fund, which is usually included in the fund’s name. in company st U.S. De A Row percentages may not add to 100 percent because of rounding. ll ock, inclu partment of ding Labor, 51 perc Employee ent 64,141 who hel Ben de none fits S Num 23,983,398 ber (Figure ecurity Administration of Participant 33). s in On $1,414,796,263,998 Plan the oth (D eecem r hand ber , a)b . Available out 6 per $58,991 c at ent had more than target-date fu date of the fund, w nds tha hich isn usual thos ly ie with mor ncluded in the fund’ e ye sars on t name. he job: At year-end 2011, 51 percent of participants with two or Source: Tb abulations <100 Participants from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. >5,000 100–500 501–1,000 1,001–5,000 active partici Sourp ce: ants in t Tabulations h fe rom pla EBRI/ICI Par n and, as suc ticipant-Dh irec , does ted Retirnot n ement Plan ece Data Collec ssarily repr tion Present th oject. e total number of employees at the GICs are guaranteed investment contracts. 18 th changes in balance. This s insu Sour raSocial Security between 1992 an nc ce: e t sT atistic should ep abulations arate ac fc rom o u EBRI/ICI Par ntbe interp s, and any t ic po reted with caution, as it may not repres ipant- oled D ir id nv ec 2004 on re es ted tm Retir ent em pr ent Plan o duc tirement patterns, t pData Collec rimarily inv tion estPr ed ojin ec see Gustman a tt. he ent the total 401(k) assets owned by the security indican ted Steinmeier d. The tenure var2008. iabl e is general ly Investment Co Note: The anaSour lysis inclu mpany I ce: Tabulations des tn hstitute, e 3 f.4 rom m il EBRI/ICI lio Quarterly Supplementary Data n rece Par ntly tic h ipant- ired p Dir aec rticipa ted Retir nts ( em thent osePlan with ). The allocation to equitie Data two o Collec r few tion er yPr ea oj rec s o t.f tenure) in 2s0 in 11, target-date funds the 3.2 million recently h varies w ired participa ith the nts in 2010, the 3.1 million recently hired participants in 2009, universe o Note: “Balanced funds” include mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investmen f plans as reported by the U.S. Department of Labor (Figure 4). t product primarily invested in a a At year- presents t account Retireme Send balan ou Source: h rce e 2 : T distribution 011, c a Te assets of b abulations unt.” latio the nsI fn r avera from EBR ovestment Co m of plans, parti E re BRI I/IC g /Icently h Ce ac I Participant-D I Partic count ipmpany I ainre t-D id c r bal ect ire ipa participants c ed tea n d Rn R nce etirement ts, and assets stitut etireme was $ 1100 13 e Pers Plan D nt P in lan 58, ata C Dtpective a h ta 991 ollection eir 20s St by fo Coreet lle an cProject. tio ur com 11, NW · Suite 878 d th nat Pr oye no. 2, je ect.median ar-en binations an d 20 d accou EBRI Issue of 10 (non–tar in nvestment of t balance Br get- ief wa , da no. 2 fer s $16, te ings. ba 83 lance 64 (J The 9 uly). (Fi d first fu gure nds 9). partici sectional snapshots can lead t Note: “Funds” i p401(k) partici ants i Note: T n their n he clude m tenur 2 e var u p 0 tual ants (those s wit iable funds, bank is h gener o out e false conclusions. For exam ally col q uity that h year lecti s v w fun e trusts, l ora king at c ve been in the same ds ha ifur e i d e rent nsurance separate accounts, and any q em uity ploy er pl exposur , e, newly formed plans would te and thus plan since 20 m e thro ay overugh state non year pool s 03) is exp of – target-dat ed i partic nvestm ipation nd to pull down the aver ein the e nt product cted to be published in e balanc 401(k p ) plan. rim ed arily fun inve ds, an sted d age The analy c sis includes the 1.2 million participants with two or fewer years of tenure in 2011 and in plans offering company stock as an investment option. partici 80 Changes in Asset Allocation perc pants i ent ofn all their ac age gro count ups having no balanc Between Ye es inves loan outstan ted i ar-End 2010 and Ye n comd pin an g at y stock. all ar-End 2011 (Figure 50). ................................................. 17 fewer years www.dol.go Note: T Source: of tenur 1998 he tenur Tabul 1v e var 9/e h 9ebsa/PDF/200 ati 9 io able e nlsd f 2000 t r is om gener arget-date fun EBR ally 2001 I/IC year I Parti 9pensionplan s wc or 2002 ipant-D king at c ds, compar ire ur 2 c0 ted rent 0 bulletin.pdf 3R em etiploy rem ed 2004 er ent with , and Pl an 2005 thus 37 Da percent of partic m ta ay C o over 2 lle 0cti 0s6 to ate n Pyrear 2007 oject. s of par ipa tic 2008 ipation nts with in the 2009 more 401(k2 ) plan. 01than 0 2011 five to 10 years yeC ars om w Note: ponents orkin Tg he a m ttenur a cy u rr not e en var add t e iable mto plis o the y gener ertotal , an ally d because t h yus ear m s w aor of y o kroundi ing verat stc a ng. ur te r ent years em ploy of per ar , tand icipa thus tio n min ay t h over e 40 st1 ate (k)y pl ear an s .of participation in the 401(k) plan. the 4.0 milmix of equities and fixed-income securities. lioN note: Percentages recently hired p do not add to articipants 100 in 2 percent 008, th because e 3.8 m of rounding. illion recently hired participan ts in 2007, and the 2.8 million recently hired participants in 2006. sponsoring firm. Figure 41, Note: Ne The w 4 medi0 an 1 accou (k) Parti nt balan ccipants e at year-Ten end 2011 d Not to Ho was $16,649.ld Hi Washington, DC gh Concentrat 20005 ions in Company Stock ........................ 37 b Figure individual. The in the securi 17, Source: Rat tyT indi i abulations impact of acco o of cated. 401(k from) A EBR ccount Balanc unt consolidati I/ICI Participant-D e to o irn varied with th ect S ed a Rlary, etiremby ent Participant Plan e participant’ Data Collection Age and s age and Project. Tenure tenure ................................... with the current employer. The 20 funds’ target dates. For target-date funds, investors were assumed to be in a fund whose target date was nearest to their R There is category ow percenwide tis ag th es e bas m variation i ay noe t gro add tn u o 100 p, 401(k which perc)en plan cons t bec parti au is sts e o of c fipants’ acco roplans unding. that udo nt ba not lances offer c at o year-end 2011. mpany stock, GICs, or Nearly other stable-valu three-quarters ofe t funds. he 2013. N Available ote: “Funds” at inclwww.ici.org/pdf/ ude mutual funds, bank per11-02.pdf collective trusts, and life inwww.ebri. surance separate org/pdf/briefspdf/ebri_ib_07-20054.pdf accounts, and any pooled investment product pr imarily another 2 percent held company stock as their only equity investment. Fifteen percent held some combination of "Funds" includ Sour e m ce: u tu Tabulat al funions ds, b fra on m k co EBR lle I/ctive ICI Pa trrtu icipa sts,n life t-Di in rect su ed raR ne ce tir se emp ea ntr a Pte lan aD cco atau C no ts, llect an io dn a Pn ry oject poo . led investment product primarily invested in the security indicated. of ten Asset Allocatio uNote: re, and 22 percent The tenure n and Participant Age © 2012, Emplo variable of partic is generally yipants ee B years e .......................................................................................... nefit w wi orking th mor Research Institute at current e themploy an 3 (202) 0er, years ?6 and Educ 59-06 thus of t ation and Re 70 may e nure overstate (Fise g yure ears arc h32). of Fparticipation und. All riin ghts re the 401(k) ............ 17 serve plan. d. * Assets do not add to the total because of rounding. Sources: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project, U.S. Department of Labor. invested in the secur Note: Average and im tyedian indicated. 401(k) loan amounts are calculated among participants with 401(k) loans at year-end. www.ebri.org www.choosetosave.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 monthl 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 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 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 Issue Bri Issue Bri Issue Bri Issue Bri y resea Issue Issue Issue Issue Issue Issue Issue Issue Issue Issue Issue Issue Issue Issue Issue Issue Issue Issue Issue Issue Issue Issue Issue Issue Issue Issue rch report f e e e e e e e e e e e e e e e e e e e e e e e effffffffffffffffffffffff • December • December • December • December • December • December • December • December • December • December • December • December • December • December • December • December • December • December • December • December • December • December • December • December Brief Brief Brief Brief Brief Brief Brief Brief Brief Brief Brief Brief Brief Brief Brief Brief Brief Brief Brief Brief Brief Brief Brief Brief Brief Brief • • • • • • • • • • • • • • • • • • • • • • • • • • r December December December December December December December December December December December December December December December December December December December December December December December December December December om th2012 • No. 380 2012 • No. 380 2012 • No. 380 2012 • No. 380 2012 • No. 380 2012 • No. 380 2012 • No. 380 2012 • No. 380 2012 • No. 380 2012 • No. 380 2012 • No. 380 2012 • No. 380 2012 • No. 380 2012 • No. 380 2012 • No. 380 2012 • No. 380 2012 • No. 380 2012 • No. 380 2012 • No. 380 2012 • No. 380 2012 • No. 380 2012 • No. 380 2012 • No. 380 2012 • No. 380 e EBRI Education and Re 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 • • • • • • • • • • • • • • • • • • • • • • • • • • No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. 380 380 380 380 380 380 380 380 380 380 380 380 380 380 380 380 380 380 380 380 380 380 380 380 380 380 search Fund © 2012 Employee Benefit Research Institute 12 25 34 32 41 31 40 14 15 19 37 29 35 23 20 11 39 24 42 38 30 36 21 16 9 8 18 43 10 26 45 44 46 50 49 22 13 47 48 27 17 52 51 28 6 5 2 4 7 3 Figure 24 Figure 32 Average Asset Allocation of 401(k) Accounts, by Participant Salary and Investment Options Figure 38 a Asset Allocation Distribution of 401(k) Participant Account Balance to Balanced Funds, by Tenure Asset Allocation Distribution of 401(k) Account Balance to Percentage of account balances, 2011 a,b Percentage of Participants, 2011 Balanced Funds Among Recently Hired Participants, by Participant Age d GICs /Stable- Equity Target-date Non-Target-date Bond Money Company a,b Percentage of Account Balance Invested in Balanced Funds b c Percentage of Recently Hired Participants, 2011 Figure 29 Salary Funds Funds Balanced Funds Funds Funds Value Funds Stock Tenure (years) Zero 1–10% 11–20% 21–30% 31–40% 41–50% 51–60% 61–70% 71–80% 81–90% 91–100% d Average Asset Allocation for 401(k) Plan Participants Without Plans Without Company Stock, GICs, or Other Stable-Value Funds Percentage of Account Balance Invested in Balanced Funds 0–2 32.5% 2.5% 2.3% 2.5% 1.6% 1.7% 2.8% 1.5% 1.4% 1.1% 50.0% $20,000–$40,000 40.4% 26.4% 7.1% 13.6% 6.3% Age Group Zero 1–10% 11–20% Equity Fund Balances, by Participant Age or Tenure 21–30% 31–40% 41–50% 51–60% 61–70% 71–80% 81–90% 91–100% >2–5 38.1% 4.0% 3.4% 3.5% 2.3% 2.2% 2.5% 1.7% 1.8% 1.8% 38.6% >$40,000–$60,000 42.5% 22.2% 7.8% 15.4% 7.1% 20s >5–10 28.0% 44.1% 1.9% 5.8% 1.8%5.1% 1.8%4.8% 1.3% 3.0% 1.6% 2.6% 3.3% 2.6% 1.6% 1.8% 1.4% 1.8% 2.1% 1.0% 26.2% 56.3% Percentage of account balances, 2011 >$60,000–$80,000 45.5% 20.0% 7.4% 15.2% 6.4% >10–20 49.6% 7.7% 6.0% 5.5% 3.5% 2.8% 2.7% 1.9% 2.3% 2.9% 15.1% 30s 31.9% 2.6% 2.6% 2.7% 1.7% 1.8% 2.8% 1.5% 1.5% 1.3% 49.5% >$80,000–$100,000 47.8% 18.4% 6.4% b 16.1% 5.9% Target-dateNon-Target-date Bond Money GICs /Stable- Company >20–30 54.8% 8.9% 6.1% 5.4% 3.6% 2.9% 2.6% 1.6% 1.4% 1.3% 11.3% 40s 35.0% 2.9% 2.6% 2.9% 1.8% 1.8% 2.6% 1.4% 1.5% 1.2% 46.3% >$100,000 a 49.2% 14.9% 6.6% 17.3% 5.6% c Funds Total >30 60.7% Balanced Funds 8.8% 5.3% Funds 4.6% Funds 3.0% Value Funds 2.3% 2.0% Stock 1.3%Other 1.1% Unknown 1.0% 9.9% 50s 35.8% 2.9% 2.4% 2.8% 1.7% 1.8% 2.5% 1.3% 1.4% 1.1% 46.1% All 45.6% 18.0% 6.5% 17.8% 6.7% All 43.6% 5.6% 4.5% 4.2% 2.7% 2.4% 2.6% 1.7% 1.7% 1.8% 29.1% Age Group 60s 39.3% d 2.9% 2.1% 2.6% 1.6% 1.6% 2.1% 1.1% 1.2% 1.0% 44.6% Plans With GICs and/or Other Stable-Value Funds 20s 58.8% 17.5% 5.0% 3.0% 4.7% 6.2% 1.9% 2.3% 100% c All 32.5% 2.5% 2.3% 2.5% 1.6% 1.7% 2.8% 1.5% 1.4% 1.1% 50.0% Percentage of Account Balance Invested in Target-date Funds $20,000–$40,000 31.7% 18.1% 12.6% 9.6% 2.1% 20.1% 30s 51.5% 14.4% 7.1% 5.3% 7.9% 7.9% 3.1% 2.4% 100% 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 34.8% 13.5% 14.2% 9.3% 2.4% 18.9% Percentage of Account Balance Invested in Target-date Funds 40s 40.7% 12.1% 9.5% 7.0% 12.5% 10.8% 5.1% 2.0% 100% 0–2 48.8% 1.4% 1.4% 1.5% 1.0% 1.2% 2.2% 1.1% 1.1% 0.8% 39.4% >$60,000–$80,000 38.7% 10.6% 13.8% 9.6% 2.5% 17.9% Age Group 50s Zero 29.4% 1–10% 10.3% 11–20% 12.0% 21–30% 31–40% 8.8% 41–50% 20.2% 51–60% 12.0% 61–70%5.2% 71–80% 2.0% 81–90% 100% 91–100% >2–5 >$80,000–$100,000 55.1% 2.5% 42.3% 2.1% 9.4% 2.1% 1.5% 11.7% 1.5% 10.4%1.8% 2.4% 1.2% 17.0% 1.2% 1.2% 29.9% 60s 22.4% 8.6% 14.7% 11.2% 27.6% 9.4% 4.1% 1.8% 100% 20s 46.4% 1.0% 1.0% 1.1% 0.8% 1.0% 2.6% 1.2% 1.0% 0.7% 43.2% >5–10 >$100,000 62.7% 3.4% 44.6% 2.6% 9.0% 2.4% 1.6% 10.3% 1.6% 11.6%1.5% 2.3% 1.2% 15.7% 1.3% 1.6% 20.0% d All 32.8% 10.9% 11.5% 8.6% 19.0% 10.4% 4.5% 2.2% 100% 30s 47.9% 1.6% 1.6% 1.7% 1.1% 1.3% 2.2% 1.2% 1.2% 0.9% 39.4% >10–20 All 68.3% 4.7% 41.1% 2.9% 14.0% 2.5% 1.8% 8.9% 1.6% 9.9% 1.6% 2.6% 1.3% 18.4% 1.8% 2.5% 11.0% Tenure (years) 40s 50.6% 1.7% 1.6% 1.8% 1.1% 1.3% 2.0% 1.1% 1.1% 0.8% 36.9% >20–30 73.6% 5.4% 3.0% 2.5% 1.8% 1.6% 1.4% 1.0% 0.9% 0.8% 7.9% Plans With Company Stock 0–2 58.9% 11.5% 10.1% 3.9% 7.2% 3.6% 3.8% 1.4% 100% 50s 50.8% 1.7% 1.5% 1.7% 1.1% 1.2% 1.9% 1.0% 1.0% 0.8% 37.3% >30 78.4% 5.3% 2.5% 2.0% 1.3% 1.1% 0.9% 0.7% 0.6% 0.6% 6.6% $20,000–$40,000 25.7% 17.7% 3.9% 12.8% 15.6% 19.4% >2–5 52.0% 13.8% 10.5% 5.6% 7.9% 5.6% 3.5% 2.2% 100% 60s 53.5% 1.6% 1.3% 1.4% 1.0% 1.1% 1.5% 0.8% 0.8% 0.7% 36.3% All >$40,000–$60,000 60.8% 3.4% 32.9% 2.4% 12.8% 2.2% 1.5% 2.8% 1.4% 12.8%1.6% 11.3% 1.1% 1.3% 1.4% 22.5% 22.9% >5–10 41.7% 13.1% 10.4% 7.8% 13.3% 7.3% 3.4% 2.6% 100% All 48.8% 1.4% 1.4% 1.5% 1.0% 1.2% 2.2% 1.1% 1.1% 0.8% 39.4% >$60,000–$80,000 31.3% 14.4% 4.4% 13.7% 8.4% 21.7% >10–20 32.8% 10.9% 11.2% Percentage of Account Balance Invested in Non-Target-date Balanced Funds 8.7% 17.5% 10.9% 4.8% 2.6% 100% >$80,000–$100,000 33.9% 11.1% 5.5% 13.0% 7.5% 21.8% Percentage of Account Balance Invested in Non-Target-date Balanced Funds >20–30 22.9% 10.1% 11.7% 9.1% 23.8% 13.8% 6.2% 2.0% 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 33.7% 10.9% 4.8% 15.8% 5.8% 21.7% >30 14.9% 8.9% 12.3% 12.1% 30.7% 14.5% 4.7% 1.8% 100% Age Group 0–2 Zero 82.2% 1–10%1.9% 11–20% 1.4% 21–30% 1.3% 31–40% 0.6% 41–50% 0.6% 51–60% 0.6% 61–70% 0.3% 71–80% 0.3% 81–90% 0.4% 91–100% 10.3% All 32.4% 16.1% 4.2% 13.6% 8.7% 19.7% d All 20s >2–5 80.5% 32.8% 81.0% 1.5% 2.9% 10.9% 1.2%2.1% 11.5% 0.9%1.8% 8.6% 0.5% 0.9% 0.6% 19.0% 0.8% 0.7% 0.8% 10.4% 0.4% 0.5%4.5% 0.4% 0.5% 2.2% 0.5% 0.3% 100% 8.2% 12.9% d Plans With Company Stock and GICs and/or Other Stable-Value Funds Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. >5–10 78.5% 4.3% 3.4% 2.9% 1.5% 1.1% 1.1% 0.6% 0.5% 0.5% 5.7% 30s 82.4% 2.0% 1.6% 1.3% 0.7% 0.6% 0.6% 0.3% 0.3% 0.4% 9.8% a $20,000–$40,000 29.9% 8.0% 11.2% 6.2% 1.5% 20.2% 20.9% 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 >10–20 78.1% 5.2% 4.0% 3.4% 1.8% 1.3% 1.1% 0.5% 0.5% 0.4% 3.8% 40s 82.9% 2.0% 1.6% 1.5% 0.7% 0.6% 0.6% 0.3% 0.3% 0.4% 9.2% included in the fund’s name. >$40,000–$60,000 32.0% 7.0% 11.4% 7.1% 1.9% 20.1% 18.4% b >20–30 78.1% 5.7% 4.0% 3.3% 1.9% 1.3% 1.1% 0.6% 0.5% 0.4% 3.2% 50s GICs are guaranteed investment contracts. 83.5% 2.0% 1.5% 1.6% 0.7% 0.6% 0.6% 0.3% 0.3% 0.3% 8.6% >$60,000–$80,000 33.1% 7.0% 10.0% 7.1% 1.8% 20.8% 17.5% c >30 79.7% 5.3% 3.5% 3.0% 1.8% 1.2% 1.0% 0.5% 0.5% 0.4% 3.1% Row percentages may not add to 100 percent because of rounding. Percentages are dollar-weighted averages. 60s 84.6% 1.8% 1.2% 1.5% 0.7% 0.6% 0.6% 0.3% 0.3% 0.3% 8.0% >$80,000–$100,000 36.2% 6.1% 10.2% 7.9% 1.7% 18.4% 16.3% d The analysis includes the 11.8 million participants with no equity funds at year-end 2011. All 80.3% 3.9% 2.9% 2.5% 1.3% 1.0% 0.9% 0.5% 0.5% 0.4% 5.9% All >$100,000 82.2% 1.9% 39.6% 1.4% 1.3% 6.2% 0.6% 8.0% 0.6% 8.0% 0.6% 1.4% 0.3% 0.3% 17.6% 0.4% 13.9% 10.3% 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 Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. All 35.7% 7.6% 7.8% 7.9% 2.0% 19.0% 16.0% Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. a The analysis includes the 24.0 million 401(k) plan participants in the year-end 2011 EBRI/ICI database. is generally years working at current employer, and thus may overstate years of participation in the 401(k) plan. a The analysis includes the 3.4 million recently hired participants (those with two or fewer years of tenure) in 2011. 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 Row percentages may not add to 100 percent because of rounding. Minor investment options are not shown; therefore, row percentages will not add to 100 percent. Percentages are dollar-weighed 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. 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. 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 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. GICs are guaranteed investment contracts. Note: “Funds” include mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investment product primarily invested in the security indicated.

401(k) Plan Asset Allocation, Account Balances, and Loan Activity in 2011

401(k) Plan Asset Allocation, Account Balances, and Loan Activity in 2011

Volume 380

Pages 56

401(k) Plan Asset Allocation, Account Balances, and Loan Activity in 2011

EBRI Issue Brief

Jack VanDerhei

Sarah Holden

Luis Alonso

Steven Bass

Retirement