A greater number of 401(k) plan participants are investing in target-date funds over time. At year-end 2012, 41 percent of 401(k) participants held target-date funds, according to a report released today by EBRI and the Investment Company Institute (ICI).
- The bulk of 401(k) assets continued to be invested in stocks. On average, at year-end 2012, 61 percent of 401(k) participants’ assets were invested in equity securities through equity funds, the equity portion of balanced funds, and company stock. Thirty-three percent 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 2012. At year-end 2012, 15 percent of the assets in the EBRI/ICI 401(k) database were invested in target-date funds and 41 percent of 401(k) participants in the database 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 2012, nearly 54 percent of the account balances of recently hired participants in their 20s were in balanced funds, compared with 51 percent in 2011, and about 7 percent in 1998. A significant subset of that balanced fund category is in target-date funds. At year-end 2012, 43 percent of the account balances of recently hired participants in their 20s were invested in target-date funds, compared with 40 percent at year-end 2011.
- 401(k) participants continued to seek diversification of their investments. The share of 401(k) accounts invested in company stock edged down to 7 percent at year-end 2012. 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 2012. At year-end 2012, 21 percent of all 401(k) participants who were eligible for loans had loans outstanding against their 401(k) accounts, unchanged from year-end 2011, 2010, and 2009, but up from 18 percent at year-end 2008. Loans outstanding amounted to 13 percent of the remaining account balance, on average, at year-end 2012, down 1 percentage point from year-end 2011. Nevertheless, loan amounts outstanding increased slightly from the previous year.
- The year-end 2012 average 401(k) account balance in the database was 8.4 percent higher than the year before, but may not accurately reflect the experience of typical 401(k) participants in 2012. 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 2007) is expected to be published in 2014.
Figure 25 Figure 47 Average Asset Allocation of 401(k) Accounts, Figure 1 Figure 5 Figure 21 401(k) Loan Activity Varied Across 401(k) Plan Participants 20 30 Figure possible, U.S. largest Plan Participa perce Asset Allocation and Investment Options reports Gustman, active hired Year-End 2012 Snapshot of 401(k) Plan Loan Activity to Because The presum Interna Sponsor Asset n pa tendenc partici t 25, . increases that rticipa of 200 no ts e Al of nly Average pa Allocatio 32 th 5. lan in p tr Revenu h Council y ants at tlonger n 401(k “T percent icipants ese L., of ts in the he hold the and in changes average Asset n Inf ) -ten chan e t of of account plans h ing of S Thom luenc in e e 401(k) Am ure DC rvi pla ge t Allocation ba haccount in erica. ce. eir d represent n e lanced in plans as the partici balance-to-sa an of 2 th 1981. 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Funds S participants repr in 2012 ex im nt er sal ze an acco e Soci pe s e o d Sharin a esent e nt tfn .................................................................... riences h offer I unt balances However, a for the d RA Certain rough al O ry leve ISec n p ir the Contri g th vestment automatic t with acco ia e . ons u compa n ls databa I rity total Cash n d and fewer butio it unt 20 4A 01(k ia s 12, f n c n or fect then bala important Options se u ro enrollment, n y years mber s ) ss different year- Defer 37 stock, as on Plans: nce Rec fall pe a 401 of of e red whol off inves rcent .................................. nt bala tenure. emp R to (k likel Ret A eflecti up ) e note rrangem ted nced of Accumulations lreflects y from oyees irement t reflects iFor he n ng that end cro fu balanc 29 partici nds, example, 2 at e012 t nts tpercent h Trends.” h tthe e h e ss- or e e Under Plan p tenure d ants both. at in 27 18 in 401(k) Plan Characteristics, by Number of Plan Participants, 2012 Jack VanDerhei is director of Research at the Employee Benefit Research Institute (EBRI). Sarah Holden is senior 401(k) Plan Asset Allocation, Account Balances, and Loan Averag 401(k) Participants e Asset Allocation oRepresent a Range f 401(k) Accounts, by P of Ages articipant Age Percentage of Eligible Participants With 401(k a ) Loans, Figure 27 Number of Plan Participants Percentage of account balances a , 2012 variable 2011. experienc funds, the References The Endnotes sectional influence among Indeed, sponsoring database Experience. N Retireme Employee investment B compar ER participants 59 is snapshots of eW th o firm. percent two o f e nt.” had rking “typical ed time Plans.” competing optio Cwith Ihicago, five n in can Pape t vestment oh ftheir n ” at F or 7 s partici lead 401(k eder 4 tha r, i n fe per IL: 60s di forces. no. wer t ta viduals o p a ) c l Pla Co ants ent with false R plan 1 plan y e 4 mpany n e gis 105 First ars iSpo n Many Recently Hired 401(k) Participants Hold in two conclusions. parti have T offers t2 er oth (J of ,0 tal n 1 empirical or 46, une sor eir I c 1 t Pl n e ipants. been , fstitut ans nure can ewer 20s 70 ). Cou no. Cperc si a with without e n 217, an For years mbridge, gni research cil Pers Td ent of o exam tal their ican 5 Nov f pective of Amer percent Par in eq Figure 12 tly Figure 43 tenure, embe suggests that pl 201 tcurrent iMA uity ce, iaffect ic pants 0, a. newly : 11, rfun had Natio 61 10, the no. employers d ho perc s mo formed 1 aver nal w h 92, e 8 re partici higher earners ent ld 1 Bur age an : tha Ttar 5 otal d plans eau i5 n account n g EBRI and 544 p As 2 et ants 30 0 o -dat s0 –5 would f e may y 9 ts Issue Econo e , 554 allocate *a e 5 ba rs 6 tend to contrib funds— not lance 9. te p of Br m ercent nd to pull down the aver reflect te ic ief, Av their nure increased Researc which eno. r age in 401(k t (Figure h 2 2e Ac 008, 8 u tend h. 3 te higher length c 17 ount ) (J Available assets. uly). 4 percent with to 6 8 Bal ) . perce be of The anc Avai tim highly Figure e age at nt median e labl they ine the 22 at director of Retirement and Investor Research at the Inv Figure estment 18Company Institute (ICI). Luis Alonso is director of Figure 45 Asset Allocation to Equities .................................................................................................. Percentage of accFigure 10 ount Figure 14 balances, 2012 ......................... 19 Figure 30 Figure 26, Asset Allocation by Distribution Part Percentage icipant of Age, 401(k of active 401(k) Tenure, ) Acco Account unt Balance plan participants Size to , or Salary Equity Funds, , Select and by ed Y Participant ears Age ...................... 27 Availab Activity in 2012 ility and Use of 401(k) Plan Loans by PlF an Size igure 7 1–10 Asset Allocation Distribution of Non-Tar 4 get- 01(k) Participant Account 16,704 87,801 $6,619,953,042 $75,397 Tenure Composition of Selected 401(k) Account Balance Categories 1 Percentage of 401(k) Plans Offering Figure 4 Loans, by Plan Size, 2012 have presents concentrated 200 tenure co acco percentages nso 7, unt balanc ww ww lpartici idatio 43 of w.ici.org w.nb tperc parti hn of their multiple acco e pof er.org a distribution Ratio of 401(k) ient ted e, n cipants salary; but wo / equity piid n n /pa f/ 2 aper 401(k) Loan 0 therefo p i401(k n 0 sec ers/ uld tell us no 6 1 th of , 1u a e -w1 ri 0 plans, nd )re, database 2 ties plan. 41 .p A 7 one df 05 ccou perce unts. for parti and One Balances as thing ab would that High Concentrations in Balanced Funds Among participants n at nt cipa w t reason ww. tiBalance a h n expect g n eir o e 1 ts, ue 998 grou t co b curr and ri.org that nsistently the (Fi a ent p—as to Salary assets Percentage of g job /p ratio ur em df Fi e tenure their /bri 3 ployer g in their 50s or 60s with more than 30 of 6 u by participating ). refspd account e o fo for Participants Conce 4 nly may ur 0 was f/ com eebri q n no balance 401(k) e ui tration ight t b ty _ workers. inations refl ib investment. _07 years ect A to is ccou -2 high sa le 00 Simila in Their 20s, iof n n lary g 54.p 20 in e n th st t vestment to 12, rly, Another of Balances d among rise f the aggreg partic uncha with years ipati 1 rec of by nge 2salary. fer e percent Tenure o ntly d of tenure, the ings. ate average n from inh However, the ired The of 2 04 parti par 1first 011.account ( ticipants k) cipants tax plan, 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 Research Databases at EBFigure 9 RI. Steven Bass is Associate Economist c at ICI. This Issue Brief For data on 401(k) plan assets, participants, and plans 401(k) plan assets, by throparticipant age, ugh 2011, see U.S. Department 2012 of Labor, Employee Benefits Asset Allocation 1996 to Eq2000 uities 2002 Varied2005 Widely 2007 Amon 2008 g 401( 2009 k) Plan 2010 Partic 2011 ipants 2012 Non-Target-T da at rget- e Date 37 Equity Date Balanced Bond Money GICs /Stable- Company Distributio 11–25 n of Participants’ BalaDomestic Stock and Bond Market Indexes nced 13,818 Fund Allocations 235,763 by Age ................................................................ $16,875,338,636 $71,578 ............. 19 27 Fifty-nin Withi Poterba, U.S. At year-end Joint n th e Jame e perc Co yemmittee a 2012, 60 percent of non-target-date balanced fund s ent r,-en Steven B of da Percentage 201 la the on nc F. 2 4 Ta 0 E e V 1 xation. B t e (RI/ICI nti, k) o E pla a of participants w qui nd 20 ndata s 06. Davi for tyba Funds Techn which d se, A. it Wis ical loan is, e pos iby th E . x 2 dat pl account s P 0ibl 0 anatio a 7 a e . wer rto “Rise tic n e l ink iassets balances pa ava ofo ifH.R n n ilable divi 401(k t were A . duals 4, ge in in specified ranges, 2012 )th assumed , Pl th e T ans, across e “Pe e2nur 0ns Lifetime 12 ito on plans e EBRI/ICI be , or Protect invested across Ear Sa nin i4 lon a 0gs, r a 1in Act y (majority k) equities and of database 2006” Wealth of (see th aof s at e fered Figure 27, Asset Allocation Distribution of 401(k) Participant Account Balance to Equity Funds, by Participant Age, Size of 401(k) Account Percentage of for Participants Balances participants w With 401(k) Plan Loans, ith bPercentage, account balances less 2012 by than $10,000 at Plan Size, 2012 year-end 2012 AllRecentlyPercentage Hired 401 18% (k of participants w ) P EB la Percentage of recently hired participants holding R n 18% P I/IC arI 401(k) D tic17% ipa ith ntaccount s T 19% a etabase R nd tbalances o18% Bec, e Le dpresents a s 18% in specified ranges, 2012 s Likely 21% to Hold C 21% omp 21% any Stoc 21% k particular category in average balance with code their ta contributi rget 20s would account is ly -da th a wi m e on thout t tend ong e bas balance fu limits nds; e to ol egro der q be uity and at up, incr pulled pa yf nondiscriminatio rticipants, e eased unds which ar-end down Snapshot had 4 cons percent 2012, if equi is a istla ts h ty rge at 80 n of of ea rules, ex the percent plans Y ch number posure ear- with rewhich gula that E the of of tnd h tions rough aim offer participants rece consolidati 401( to for ntly neit non ensure k) 40 hi A her 1(k) -red o tar ccount retired. n cthat of g o partic plans et-date mpany their employees Bal ipants were multip ba stock alan nces not h le o ced nor of ldin accounts. intro all fun GICs g income tar duce ds, gan et Future an d d -date ranges until d other anot joint fun 19 her stabl attain 8d 1 research s .3 h e e percent -v the ldalue more with Aon was Hew written itt. with 2011. assistance Navigating fr om the the Pat h Instit to Retireme ute’s research nt: 2011 and Universe editorial Benchmarks staffs. Any . viLincolnshire, ews expressed IL: in Aon thisHe report witt. are Security AdminiE stration quity T 2013a A ars gs etet -da and al teloc 2013 Funds B at alia b. on ncFor ed distotal F tri unds but Bretireme on ion ad of M 401( nt Fo unds ne assets, y k) G par IC including s tiF cunds i/pant Stable- those ac C c F om unds ount in pan 401( y bal k) plans, through the third anc Val es ue Stock 26–50 10,212 371,371 $25,390,609,052 94% $68,370 42 Month-end level, 60s December 2002 to November 2013 Decem By Jack Van ber 2013 • No. 394 Derhei, EBRI; Sarah Holden, ICI; Luis Alonso, E Figure 39 a,b BRI; and Steven Bass, ICI Age Group Acti Pv er ec 401(k) entage Plan of rec Particip ently hiran ed ts partP icer ipant cent s of age fered of and parthic olidi 20s pant ng c som , 2012 pany a stock, by par b 92% ticipant age,1998–2012 Investment Co a Holden, recordke pla Distributio Retireme Passed n loa . Sarah 201 Tenur epers n pr by 3. n nt.” ovision mpany I , .e, of “Ef the Jack This or Participants N f ects House BSalary improve ER Va to n stitute, Quarterly Su nDer oW part f So on o ............................................................................................................. rking hei, icipants cial s’ J b, uly the Company c a S Pape n e 28, id d curity e(Figur Luis n 2 r, tifi 006, no. Stoc ca P Alonso. ppl o e ation licies 1 an 4 k ementary 3 3091 d Allocations ). of as on 2009. active The (May Consid BeData). n lo “4 ). epartici an fit ....................................................................... 01(k ere CaC feature mbrid d The laimin ) p by Plan ants allocation the gg e, wa , A a Retireme Se MA: sset n s d more nat r e Nati Allocation to sult e on equiti comm onal nt ed Aug a bin n e B d s in target-date funds only , the ust u cAccount Savi reau 3, reclassific associated ng. 20 of ”06. Economi Bala NB JCX- ER ation nces, with W ....................... 38 c oof Researc -06 ran varies w large k................ in nearly d g (A Loa Pa ugust plh. p n ans i a1.2 th the e r, (as 319 28 ). 100% balanced fund assets, selected years 401(k) plan participant account balances, 1996–2012 funds. held than benefits this Age feature G compa 90 r Thi ou of perc Plan Size by prty-s the will ne yn F 401(k) ix stock t explore un of perce ds their Nas u plan, mber of n the thei F t acc uof nd longitudinal constrain rparticipants o sonly Part unt balanc icipant equ the Fiu ty aspe nd s e abili in in sin vestment. t cts h ttarget-date y e of of 201 Fthis high-incom unds 2 database consolidati Tw felve unds Fue individuals n d perce swer (Figur on V in en a t ile more ue nh 3 th ad F 7 to save in the u ese ). n e detail. d q Fi suity plans, fty-seven S ex toposure w ck h plan. See Holden and iperc ch genera O throu ent therog flly h U r e n some o cently kffer now e combin nq h Va uity ire nDer Td ota fun ation lhei ds, of 7051–100 % to Wi equi de Cross Sect t 8,025 ies, by age, 569,723 perc ion of ent t age he 401( of par $36,088,127,399 k) tic Uni ipant vs erse , 2012 $63,343 those of the authors, and should not be ascribed to the officers, trustees, 89%or other 89% sponsors of EBRI, EBRI-ERF, or their quarter At year-of end 201 2012, 3, see the Investm averaent ge ac Company count bal Ina stitute nce was 2013. $63, For 929 4% a discussion of trends bet and the median accouw nt een defined b balance was enefit (DB) and $17,630 (Figure 9). 3% 88% 20s 12%2% 11% 10% 11% 10% 10% 13% 13% 13% 13% 21 400 Average Asset Allocation of 401(k) Accounts by Participant Age and Age Group39.6% 1998 1999 2000 2001 2002 Percentage of Account Balance Invested in Balanced Funds 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 me funds’ million Older, Tab 2a0s No. Available Activity Washin su u target rlonger-t lations of the Surve partici e19071 d All Plans bgton, yin dates. p th at 30 ant enure 2008.” (M e.7 ww DC: nu ay). % accou For w mb d., U.S. Inb Cam n target a er vestmen n n 3 e y d ts 4. of p r of Consumer Fin Joi .org b 2% hi tridge, -date h gher n a at t/p r tCommittee t iw ap c -incom Company ip funds, e MA: ers/ re a 1n 1 multi ts .7 w1 Nation % e investors in 30 participants a p th nces reveal th o Ins P le 91 n e e al rTa accounts c tp 6 itute Bur en l.4 an xation. were ta % ) eau ge . R N e ten o assumed ine searc of fo Availabl at 1 A w d ty .9 E c ne about conomic to c % -four h od un have Pers by to e t half percent B at be sin a pective larger l a R 3 www g of in n .1 elcsearch. e % e a traditional in Ifund of n . accou jct.g 15, divi ve pla s duals. twhose no. ed o Availa nn v/ 5 s t .i5 IRA n x- wit 2, bal % E 38- This ble q an target h ances, u assets mo i0 d tyat 6 3 EBRI proce . F re .4 p udate d % nd in which than f s 2010 Issue dwas ur 10,000 3 e are .0 resulted allo nearest Br %im ief, ws portant partici n EBRI 1 o to from 00 . their 33 % p and ants 5 for $70, 101–250 000 7,133 1,137,359 $65,879,803,323 15% $57,923 . 2012. 2012 Universe Benchmarks. Lincolnshire, IL: Aon Hewitt. (Median Age: 45 Years) 84% a bond target-date partici 2001c Asset fu p for ants nds, Allocatio a 30s complete fu h m o nds, o ldin ney n g non of fno unds, discussion Rec -n-tar tar eg ntly a et-dat g net-date d Hired of balan 20% e EBRI/ICI balanc ba ced Participa lan 19% funds ed cfindings ed fun nfun ts as d 18% ............................................................................... s, d invest an s or ha d c other d F o m 20% mpan imore gure 49 ent research oy tphstock. tions. 20% an 90 o n Another As perc the 20% a ent rrelationship esult, 28 of23% tpercent m heir any acco between part 23% ofunt icipa partici ba contribution n 22% lance ts pants with .................... investe were 23% no rates equ in d iin ty plans and 19 staffs. Neither EBRI nor EBRI-ERF lobbies or takes positions on specific policy proposals. EBRI invites comment on this defined The Figure account 28, contribution Per balances centage (DC) o of f plans, 401(k) 401(k) see pla Plan About Changes in Account Balances Poterba, n partici Partic Pipants p Venti, eants rcentage at and With year-en of Wis o u At e cEqu c2007; o d unt 2012 ity BHolden, Fund ala exhi nce Balan bit Inv Bres wide ady, and Hadley 2006; Br ces ted variat Wh in Eq o ui Have ion. ties More Equity than Exposure, ady an three-quarter d Bogdan 2010 by s of 380 11% $65,454 a 10% 12% 20s 60.8% 61.1% 60.5% 401( 58.1% k) plan c 53.9%har 49. ac 6% teris 4 28 9. tic 8% s by 45 num .4% ber 1998 40. of 0% par 35. tic 4% ipants 32.9% : 32.3% 30.3% 26.2% 23.0% 10 90% 1–100 41.7% 20.2% 4.7% 15.1% 6.1% 5.2% 0.1% 30s 42.4% 13% 22.1% 8.1% 8.4% 2.8% 4.2% 6.1% 3.1% 2.8% 100% 251–500 3,330 80% 1,179,111 Figure 16 $63,347,473,310 $53,725 $63,929 Inv 40s estment Options A 22% mong 401( Z21% ero k) Pl 20%an Part 22% 1–2i0 c% ipant 22%s Wit 22% h >2 Tw 0%–8 o or Few 26% 0% 26% er Years of >8 25% 0% Tenure 26% inclu rollovers ICI meetin 65th birthday. This to (Octobe ww ded begin s g y w.nb stem from th a eir loa rer.org to ). employer-spon n of The equity in consolidat Av provision, come-r classification ailabl /papeplac e ers/ po at e co w1 rtio a www.ici.org/pdf s e ccount mpared ored does ment 90 n was estimated using the i 71 retireme not nee bala wconsider id th nc s i3 nt es n5 /p retir plans. percent for er15 the e individu ment. -0 numbe In 2.p of ad d ditio pl als n f r dust ans For an of n across d distinct , acco longer-t ry with ww avw.e erag unt balances are n 1 dat 0 investment b e or a e nured ri. provi equity fe org/ wer d pdf partici ers perce partic option /bto rie p n et o ants provide ipants. fs tage spdf presented f unpaid lo in /EBRI for t Partici a hthe eir mor _ IB to a 2an balances. p ssigned 0 e _ a a s 10- accurat ngiven with t loan 20 09 target-date salari particip e activit _No estimate e3 s35_K ant, y - 60% Age G 15% roup 15%Zer401(k) o 15% Loan 1–20% Amounts Varied >20–40% Across >401(k) 40–60% Participants >60–80% >80–100% that funds non-tar salary. offer ha For get-dat d 360 GIC an exposure analysis se and balance other to of equit d 401 stable-value fu(k) nds y-relate particip at yd ear-en inve ants’ funds sd tments contribution 2 as 01an 2. throu inves activity g tment h comduring opt pany ion, stock the in a be dditio or ar ba mar n lanc to ket ed the of fun 2000 base ds to 200 or opbo tioth n2, s. (Fi see Alternativ gure Holden 29). ely, and 15 Age Group >0–50 percent >50–90 percent >90 percent research. 30s Participa 61.9% nt 62 A.g 3% e or 61. Tenure, 6% 60.2012 0% 57 ............................................................................................... .2% 53.3% 52.3% 47.6% 43.6% 40.4% 37.4% 36.2% 33.6% 30 ................ .0% 26.4%28 and 2013; the particip and 101–500 ants Brady, Burham, and Holden 2013. in the 2012 EBRI/ICI 42.5% 401(k) 20.3% database had 5.2% account bal 14.9% ances that 5.0% were lower 6.3% than $63,92 0.5% 9, the size of Year-End 2012 Snapshot of 401(k) Plan Loan Av Activity erage ............................................................................................. a $61,346 b $60,329 23 Whe Introduction 40s n analyzi 501–1000 50sn4g 5. th 3% e chan 15 ge .7i% n part 17%icipa 7. 2,185 0% n 17% t account 9. 17% 8% balanc 1,535,977 19% es 3.3% over 19% time b5. , 8% $86,247,266,366 it is 19% importa 722% .1n % t to have 3. 22% 4%a cons $56,151 22% 2.istent 6% 23% sampl 100% e. EBRI/ICI 401(k) databas 75% e in 2012 ver 9 sus 2011 DOL Form 5500 for all 401(k) plans Utkus, Russell Steph 20 A00 ll eIn n dP., ex.a Tacoma, nd Jean A. WA You : Fn ran g. 5 k 1. 20 2% Ru 10. sse Resilie ll Comp nce any. in 6 .Vo 2% latile Markets: 40 271(k .4%) Participant B15 eh.a 0vior % September . 2013. 2013 Universe Benchmarks. Lincolnshire, IL: Aon Hewitt. 20s 20s Median 401(k) Account Balance 8.9% 84.9% 1.2% 2.2% Among Longer-Tenured 7.3% 4.8% 19.4% 7.8% 63.5% betw varied but of fund calculated avera rather Update. een modes g 340 $ ethe 20, acc pd t000 tly using the o y f pes unt by an plan of balanc d options $40, Mo size es 0 rningstar Lifecy 00, , per ranging presented. the individua Per media from centage of Pre cle Allo n l. 20 laccou iminary percent catio ac nt re b cn sear ount balanc a Indexes ( of lance partic ch analyzing 1. was ipants see M es $6,,6 1998 and 2012 o with 3rningstar 201 54 million partici inloans 2012 out (Fi3b) g standing ure pants drawn fr . 16). in Lon 40g1er-ten (k om the 2000 ) plans uredwit h 11 to 40s 501–1,000 59.8% 60.6% 59.5% 401(k) Loan Balances as a Percentage of 5 41.5% 8.8% 55.9% 19.7% 52.6% 52.0% 6.2%47.3% 401(k) Account Balances 13.7% 43.6% 40.7% 4.7%37.9% 37. 6.8% 0% 34.4% 2.0% 31.4% 27.5% perce VanDer nt hei of 80 % 200 60s par4c. ticipants For summary were in statistics plans 9% that on 9% ocontribution ffer compa 9% n activity in 2012, see The y 10% stock but 10% no $58,328 stable 11%-value Vang 12% pr uaoducts, rd Group 2013 $58,351 13%while13% th and Aon Hewitt e rem14% aining 22 1,001–2,500 1,685 2,629,617 $151,937,055,030 $57,779 $58,991 the 22 50s average account 38.4% balanc 13.4 e. % 70% In fact,7. 39. 1%6 percent 12.5% of part 4. icipants 3% ha1d 0.accou 2% nt bala 7.9% nces of 3. 9% less than 2.3% $10,000, 10 w 0% hile $60, Age 000 30s Group 86.0% 7.6% 6.4% Comparing average account balances across different year-end snapshots can lead to false conclusions. 30s 8.1% 2.4% 3.5% 7.2% 19.8% 59.0% Over Hewitt At ye 200 the ar-end Associa 7– 320 pas Decem t 2012, 1.8 percent of the parti three tes. ber 20 deca 2 09. 00des 9 Ho . V w ,alle 40 Well 1(k y Forge, Are ) plans Em PA: c ployees ipants in the d have The grown Vanguard Savin to g a taba be anGroup, d the se In were vestin mos Va tmissing ng g wid in u30s ard e4 s0 p1 a rea C(e birth k) nter d Pl pr ans: date ivate-s for Retir 20 entry, 09 ector e He ment were e witt m R ployer-s younger Univ esearch erse pons tha (Marc nored 20, h). or Figure Availability 29, Average and Use Asset of 401(k) Allocation Plan for Loans 401(k 50s by ) Pl Pla an n Parti Size cip ........................................................................ ants $56,878 Without Equity Fund Balances, by Participa ................ nt Age or 23 2 50%1,001–5,000 (years) 40.6%Participants, by Age and Salary, 2012 18.5% 6.3% 12.7% 4.0% 7.9% 4.1% 50s Tenur 57. e 6% 58.8% 57.4% 57.9% 53.9% 51.2% 49.5% 45.2% 42.3% 39.6% 37.8% 37.6% 34.4% 31.3% 26.9% partici 2,500 401(k) Plan Asset Allocation, Account Balances, and Loan EBRI/ICI 401(k p partici ants ip nants )their database sug to 20 24 s ear pern cent gests that the ing mor of $55,502 for Participants W partic e than ipsheer number ants $80,0 in00 4ith Loans, by 0to 1( k $ ) of in 100, plans vestment 00 Participant Age, T 0 with 23% had 1a 0 options medi or fean wer presented a enure, ccou participants nt does balance not (Figu of influence re $48, >5 4– 410 ). 10 Y participants. Loan 8, ears whil ratios— e those 40s 84.1% 8.9% 25% 7.0% Ass Prior et Allo to 2005, 2,501–5,000 catiothe n to U.S. Equ Depar ities tment of Labor 743 Private Pensio 2,604,097 Figure 23 n Pan Bulletin $154,768,532,768 updates reported a count of $59,433 active 401(k) plan percent 2013. 60s of pa 20s r3 ticipants 2.2% wer 12.e 5 % in plans 6. th 68 9% at .8% offere 27% 15 d .both 2% co Figu mpan 5. 2.9 6% re 20 % y stock 15.a 3% nd st1 a7. ble 1% 6 -valu .7% e pro 3.d 3% ucts1 1 in .2 2. additio % 2% n to 10 0% the base Balanced Funds Plan Assets 21% 1 10.2 S&P 500. percent 300 Ne40s w ofYork, particip NY: ants Sta 8. had n9% dard account & Poor b ’s. 3. alances 6% greate4r .6 th %an $100,000 8.8% (Figure 10). 32 The .5% variation4 in 1.6% account balances 0–2 6% 5% 4% 5% 7% 6% 9% 7% 5% 6% Barclays Ca `>pit 5,000 al U.S. Aggregate Bon 38.0% d Index. 12.1% San Francisco, 8.1% CA: Barcla 10.8% ys Globa Tenurel 3.8% Investors. 11.3% 10.3% 60s 5 50s 4.1% 55.5% 53.6% 55.7% 51 81.1% .0% 49.5% 47.8% 43.9% 10.7% 40.4% 38.4% 38.7% 40.5% 8.2%36.8% 30.8% 26.7% retireme older At year-end 20 Benchmarks. Available than . nt 201 Tenur 69. pla 0. at They n 12, on average e “4 ........................................................................................................................ in ht 01 Lincolnshire, the tps://i were (k) Unite Pla nstitutio not n d Asset ,included participants in their 20s had Stat ILn : es. Allocatio al.vangu Hewitt in In this 2 Associates 012, n ard. analysis. , Account com/iam/pdf/CRRRES.pdf an estim LLC. Bal aances, 73 ted 32% percent 52 an millio d of Lo n their an America Activity 401(k) n w iplan no rkers 200 assets 9.” wer Invest invest e active ment ........................... ed in 40 Com equities— 1(k) ppl an an y 29 70% Account Size, or Salary Participant Age Group , Selected Years Inve stment Options 5,001–10,000 61% 418 2,929,555 $194,811,866,253 $66,499 earnin the Suggeste On average, amou g mor nt d ci 30 e of pa s than tation: rticipants the loan $100,000 Jack outstandin have VanD 10.4 had erhei, a distinct g m divi e 53 di Sa ded .0 an op % rah account tions by Holden, thbut, e r e bal main on Luis an $51,569 average, ce 5 ing .0 Alonso, % of account $46,3 choose an89. d balance—vary Stev only Among en 22.5 6.Bass. 0% lon (Hold ge “4 only r en -tenur 01and (k) slightly ed Pla Va nDer 1 part n5 w Asset .9h% ihei en cipants partici 2001b). Allocatio in pth an In n ei ts , r are 60s 401 All (k) Plan3 Lo 9.2% an Activity 14.9Var % ies With 7.2% Participant 11.8% Age, T 4. e1% nure, Acco 9.unt 6% Balance, 7.2 an %d Salary 3.5% .................................. 2.4% 100% 23 401(k) Plan Assets Are Concentrated in Equities Percentage of participants that had bee Average Asset Allocation of 401(k) Accounts, by Participant Age and Investment Options 280 50s plan assets n ad 10 justed from the number of acti .9% 5.7% 6ve .9 % participants 2actually 1.3% reported 31.1 in %the Form 2 5500 4.1% 59% filings to options. Activity in 2012 >2–5 60s 15% 14% 77.0% Non-T 12% arget14% - 15% 12.4% 15% 17% 18% 10.6% 18% 18% For Among example, indivi All dual the a partici ddition pant of sa , the large 39.2% allocatio numben r of of 14.9% account new plans Figure 37 ba 7.2% with lances smaller to equ 11.8% balanc ities (equity es 4.1% to th fu e nds, datacompa base 9.6% wo ny uld stock, t7.2% endand to pul thel partly All reflects 6 20.5% the effects 61.0% of 60.partici 0% 5p 8.ant 7% a55 ge, .3% tenu 51. re, 6%sala 51. ry, 0%contributio 46.3% 42. n 0% behavior, 38.7% rol 36 lovers .2% 35. from 5% ot 3her 3.0%plans, 29.3% ass25. et 7% $49,024 >30 Years 40> % 10,000 366 10,739,454 $733,586,395,593 $68,308 31 partici through equity Institute pants. Salary Range 40 s R By funds, esearch year co -en P mpan e drspecti 2012, y sto v4 c e0 k, 16 1 and th (k) , 46 20s npl .2 o. % an e equity po 3, assets and EBRI ha rtion o 30s d Issue grown 6.1 f balanced f %Brief, to reno. pr40s esent unds; participa 350 (November). 1 38 0. 2% percent n 50s ts in their 30s of Available all retir 17 e. ment 5 at , o % 60s n average, assets, had 73 So urce: Tabulations from EB RI/ICI P articipant-Direct ced Retirement P lan Data Co llectio n P roject.a All 1996 2000 84.5% 2002 2005 10 2007 8.2% 2008 2009 2010 7.3% d 2011 2012 260 >5–10 60s 15.5% 24% 23% 7.7% 21% 14. 22% 1% 23% 26.23% 3% 25%16.4% 27% 26% 20.0% 27% with group Account addition, At year-end $2 ed 0,00 $50, Ba the bas lan 000 0 e preliminary d t 2012, 60 percent of balanced ces, oon $4 the and 0,0 00 sLoan ize analy in of sActivity a sis the lary found 37 ir in 401 in 2012, that (k 20 )1 mutual fu pla 401(k) 2 the .” ns Eme B (as RI particip dian nd as Issue me ac as ants sets we co ured Brie unt are fby , balanc re nnot o tinvested he . 39 nnumber a e 4, ive—that was anin d $equities ICI 54,8 ofis, pl Research 67. a when n (see part For given icipa Investme lon Peg rnts n er sp options, -ten e)c .nt tAmong ive ured Company , they Vol. parti parti 19, do cIn ipa cnot ipants stitute, nnts o. 12 in Source: Ta P blu a la n tis o W ns fr ithout Compa om EBRI/ICI Par$47,004 n tic y ip S an toc t-Dik re , GICs cted Reti /S ret m ae b nle t P-V lan a Da lue ta Funds Collection Pro ject. exclude: 23 Inves Figure tment 30, (1) E quit Asset o inpy dividuals tions B Allocatio areeligible grou n toped Equities to participate into T arget ei Var Percentage of account balances, ght -dat ied broad in eWidely a 401(k) dat cate e balan- Am gori pla ong nes who .401(k Equity funds had ond ) not Plan elected Participa 2012 coMto oney nsist n have ts .......................................... of their poolGIemployers ed Cs inve and Ot stments her make prima Com..... rily pany 30 U.S. Department of Labor, Bureau of Labor Statistics. 2012. National Compensation Survey: Employee Benefits in down Bloomber a 100 Average the gaver Loan Data. age Balances New account York, ......................................................................................................... balance. NY: Bloomber This co guld L.P. th en be mistakenly described as an indication that balanc ........................... es are 23 equity portio All n of balanced3 fu Many Many Recently Hired 401(k) Participants Hold nds ) varies 64,619 widely arou 24,019,828 nd the average c$1,535,552,420,774 of 61 percent for all participa $63,929 nts in the 2012 4 Holden, allocation, VanD RAt year-end o w perc erhei, en Sarah 60t% ages Al wit 5 Ja l0s2012, 9.8 percent of the parti h ck , m drawals, and ay L. no 20 Steven t ad 02. d tloan o Co 100 Bass. mpany activity, perce 16% 2013. nt bec Stock an 46 auA d s .2 14% e m ic % employer o n ipants in the d erica’s f r401(k) o unding. 16% Com Plans P cont erc m ent ribu itment a 13% : tabase 7 ages Results .7tion % are to were rates. d 12% oRe o llar- f tirement a w missing eight Survey This 16% ed research av 3 a 1. Secu aof er 6% date ages 15% ISC rity: .$45,519 of Ereport BS hire Investor 14% Mem entry exami bers. 1 Attitudes 14% a 4n n .6 d es Was % were the hi 13% n relat a not gto nd included in n iActions, o, nDC: ship Russell 2000 Index 2006 >10–20 401( 27% k) plan averag 26%e asset 26% allocation, 26% percentag 26% e of total as 26% sets, sele 29% cted years 29% 29% 30% 240 $20,000–$40,000 All 10.2% $6,635 4.1% $16,449 5.9% $46,093 13.0 >20–30 Y % ears $66,304 25.7% $54,867 41.0% 35 amountin By percent NoJack tww e: Thw.ici.org e investe an g Va alto ysisnDerhei, $3.5 in d c/ lin ude pd equities; s trillio f/ 40 per 1 (k)n. 1 plE 6 an BRI; - I p 0 pn aa 3 r rticipants t.p ic an ipdf an Sarah ongo ts and with ing tw in w oww. oHolden, their collaborative r fcewe erb 40s yri.org ears had o fICI; t/p enu6 df re e 9 ffort, /bri in percent inves Luis theefspd year th in A e dilf conso, Em /E ateBRI_I d pl and ted in equities; participants in their 50s had oyee in EBR a B_0 plan B o e 11 I fne fe; -20 fit arn i1 nR gd Steven Bass, ICI 0 co e _search N mpo3 any50_ stoI cn 40 k a stitute s1k_ an inve Ust pdate (EBRI ment o-0 p) tio9.p nan . 58 d d f th e 1–100 40.9% 22.2% 14% 3.8% 14% 18.0% 14% 7.2% 53% c their in Quarterly Target (Dec divide b plans emb 60s their -date with er earni Supp ass 20 fu 513). lementary ets ng nds 00 mor among or were fe ewer tha avail Data all n pn articipants, $10 ) able . . Indeed, Allocation 0,0 in 00, 72 less per tthe h to e than cent equities medi loan1 of an ratio pth ercent in ae ccou targ w 40 a1(k s of nt et-date 15 participants ba ) p per lance lans c funds ent i n wa of th ifollowed s s e the $32 assumed year rema 3,8 -e35. a nd 1/ ini to 2 n ng v 012 asset ary assets data with allocation bas iinvest n 2 e012, (Fi or strategy. g age. ur wh e ile 2 Asset 2). in plans These Age SouF rcunds e: Tabulations from EB TR ot I/Ial CI Participant-D funds irected R $43,215 etireme ced f nt Punds lan Da28% ta Collectio Fn unds Project. Funds Stable-Value Funds Stock EBRI Em Ag ploye e Grou e B p enefit Research Institute Issue Brief (ISSN 0887 20s ?137X) is published monthly by the Employee Benefit Research Institute, contributions; invested A target Private -dat in e 6 fstocks, und I 0n sand dust typic(2) ry ally including in rebalan nonves the cUn es ted equity it ite sformer po d rt Stat fmutual o lio Equity 51 es, employees to.1 bec % Marc funds, om Target- e h les 2 who bank 012. s f D oate cus had Washi c ed o8 llective ono .4 Non-Target- n g % t n ro(at gton, wth trusts, the and DC: D m time ate ore life U. fo the S. cus insur 2 Bond 8. Department Form ed 0% oance n inc 5500s om Money aseparat e as were of it app La e ro sub bor, acco GICs 1 a2 c.mitted) 5 % B /Stable unts, hes ur e and au - C incurre an pa o s d fs es Labor oth ompany d the ethe r >20–30 Age Group 25% >0–50 percent 26% 25% 24% >50–90 percent 24% 25% 27% 26% >90 percent 26% 28% database. declining, 220 but Fortactually y-one perc woul ent d of tellpa us rticipants nothing had about more consiste thanntly 80 perce partici np t ating of theworkers. ir account Similar balances ly, the inve aggr sted egate in eq average uities, between 30 acco % unt balances and partici 5 pants’ age, tenure, and salary. this analysis. Employee 2013. Washin Bengton, efit Research DC: Inve Istment nstitute. Com Avail pany able Institute at www.e (Febr bri.org uary). /pdf Av /isc ailabl ebs.pd e at f Endnotes Figure 31, ...................................................................................................................... S >$40,000–$60,000 101–500 Asset o urce: TAllocatio abulat$41,156 ionsn f ro Distribution m EB RHigh Concentrations in Target-Date Funds 43.4% I/ICI $14,045 P arof ticipant 401(k 22.5% -Direc ) Part ted $28,572 R icipa etirem n 4.8% t ent Account P lan Da$66,161 ta 17.9% Balance Collection to P r 6.6% oBala ject$94,425 .nced Funds, ...................................... by $86,268 Age .................. 42 30 Note: The median account balance at year-end 2012 was $17,630. 36 Investment percent investe Cod mpany in equities; Institut ane d (I participants CI) collect in annu their al 60s data b had on48 millio percent ns ofin 4 vested 01(k) in plan equities. participants as a means to examine target110 dat0 e 13t o f th h S 20s e ft. un Nd W , w , S hic uite h is 8 u78, sua W lly a inc shi lu 30% ngt deon, d in D thC e 30% ,f 2 und’ 0005 s nam -405 28% e1, . at $300 24% per year or i 25% s incl29% u >10–20 Y ded as pa ears 26% rt of a member 24% ship 26% subscripti25% on. Periodi- 20s 40.1% $39,885 13.7% 46.2% >30 13% 16% 15% 17% Year 17% 18% 19% 19% 19% 20% Group plans with allocati Deloitte/ICI mor o 1998 on ffer 50 T e to e % e th nur De d equities atn e 2012 fined arget-date (5, year 000 Contributi for s ) 1998 ptarget-date artfun icip on/401(k) d 2012 ants, s to 68 funds thFunds e perc 2012 Fee loa was ent nStudy ratio based of Funds the 201 was 2012 on participants 1 13 Mo dat perc ra n Balanced Funds ingstar indicate 1998 ent in (Figu an that the 2012 alys re database. in is 4 2010, of 51998 ). Funds target- the 2012 date A m m Funds edian ong fund 1998 partici numb asset Value Funds er pants allocation of 2012 investment who 1998 wer (see Stock eoptions 2012 Brady, 80 Peter. 200 a 2010. “Measur 27% ing Retiremen <100 t Resource Adequacy. 8622 0.19153 ” Journal of 19.1532 Pension Economics and Finance 9, no. 2 break pooled in inv servic estments. e 48period % Similar established ly, bond fu by their nds plan are (see any U.S. pool Depa ed ac rtment countof pri Labor, marily Employe investee d Bene in bofits nds. Security Balanc Administration ed funds are Statistics. EquitiAvailable es inc12.8% lude eq at uityww funds w. , c bls om.gov/ncs pany stock/,e and bs/ the ben equit efits y po/rt 20 io1 n 2/e o f balanc bbl00 ed 50. funds pd . “f F unds” include mutual funds, bank account c * Asset balan 501–1,000 s do ce notwo add uld to the ten totald b ecau to be se 43.1% ofpull roundi ed ng.down 22.5% if a large num 5.8% ber of older 17.2%participants >2–5 6.5% Years retired. In addition, changes in while 10 perc 30s ent held no equities 22% at all at 20% the end 22% of 20119% 2 (Figure 19% 30). 25% 22% 20% 29 21% 20% Holden, No t all cal ww par s p w.ici.org $40, Sarah tos ic>$60,000–$80,000 ipant ta 000 30s ge , sra a Jack / r te p e o d pai ff/ fe Va d i pp ren d nDer r_1 tW his a3_r sh inv hei, in eeti gto stm Luis r n, D _s entec_u C o$28,669 Alons , p and tion pdat 47.7% a . S o ddi e, eand e. tio Figure pdf nal m Steven 22 ail .$50,015 ing oBa ffice ss. s. P2011. OSTMAS $106,271 12.8% “401(k TER: S ) end Plan ad dr Asset $146,435 ess cha Allocatio nges t 39.5% o: n EBRI , $140,058 Account Issue BrBa ief,lan 1100 ces, Account Si$37,323 ze Percentage of recently hired 401(k) participants The how Cop y ratio th right Inf ese of 0 par – participant 2ticipants ormation: ma acco na This unt ge tbalanc re heir port 40 66 e is 1 .7 to (copyright k) % salary accounts. is eposit d by ithe vely 2.7% Em corre ploye late ed Be wnef ith 1iage 9. t R 0% e se anarch d tenure. Institut Pa 1 e 1(EBRI .rticipants 6% ) and in by th eir the Refer Investment Options, All Ages ences 180 ............................................................................................................................... >5–10 Years 37% ........................... 47 24 collective trusts, life insurance separate acco unts, and any pooled investment product primarily invested in the security total Morningstar 20 offered among Figure offer d ed 32, target Asset -date 13b and the 525 plans i Allocatio funnote 37 ds, n 60 Distribution nperc the sur for additional ent vhel ey w 100- of d401(k a t500 discussion). h s 14 (see Del em ) at Partic year-end 6971 ipa oitte nt Account 20 Consultin 0.15486 12. 40sTar Balance g LLP get-dat 15.4856 and I to e fun Bala nve dstment nc assets ed Funds, Company represen by Tenur ted Institute 22e pe ............. 20 rcent 11). of Plan 31 ALL 13t (April h St. N ): 1001–5,000 23 40s 40s W 35% , S 5– u2 ite 8 62. 78, Washington16% , D 44.2% C, 20005 15% 46.0% -405 20.6% 1. C 16% opyright 20 13% 6.9% 13 by Em 13% plo 13.1% yee B 16.6% 18% enefit Re5.7% s16% earch Inst15% itute. A40.9% ll ri16% ghts reserv 15% ed. No. 394. 9.5% 2008a an pooled 38 VanD GI The Cs erhei, ar positive e 20 accou guara d 200 % Ja nt nck. eed correlati 8b for further ts inves inv 20 e10. stm on ted e“T nt between in c he odetail). This change in metho nt both Impact racts.s tenure t19 ocks 9 of 9 A and an u20 to d 02 matic account bonds 20Enroll 0 . 7They baldology a ment F 2008 nce igur areis e in classified results in a dramatic in expected 41 20 4 00 91(k) 20 P into 10 because lans two 20 on 11 long sub Futu 2012 crease in the n c -term ateg re Re ories: employe tireme target-dat nt u es mber of individuals Accumulatio have e had funm dn s os: re and A time <$10,000 12% 11% 11% 12% 11% b, c 12% 16% 16% 15% 15% Relationship of Age a the sample >$80,000–$100,000 of recordkeepers nd Tenure to and cha$48,108 ngesAccount Balances in the set $83,325 of plans for whic $160,499 h they keep re $214,001 cords also can $211,345 influence the change 29% 8.5% For Equity, bond, money, and/or and year-end Loa >2 n–5 Acti 2011 vity data, in 20 se10.” e Holden ICI Resear et 59 al. .5% 2012. ch Perspective 17, 4.2% no. 10, and EBRI 23.Issue 0% Brief, no. 36 136 .3(De % cember). 40 160 indic % ated. 42% 7.9%holding the type of fund indicated, AT A GLAN CE 2012 50s 43.3% 13.3% 43.4% 60s In Investment the —havin 17 year g Co 50s ha s mpany d that more the I n time stitut dat a to base e accumulat (I12% CI). ha s It been may 11% e as trackin be se ts use 12% —tende g d loa with n10% d out ac to tivity permission have 10% amo high ng er 13% but 401(k ratios, citatio ) pla 12% whil nn of e part those the 11% icipa source in nts, th 11% ei there is r requ 20shas 11% had ired. been the lo little west >5,000 41% 48.2% 13.3% 8.6% 17.1% 7.0% 20s 60 66.9% 26.5% 7.4% 53.6% 42.6% 11.0% 5.1% 6.0% 4.0% 1.4% 3.7% 1.5% 10.5% 3.7% N o t e : “ F unds . 201 $10,000–$20,000 ”100 inc 3. lud Natio plan as e mun tual al fCompensation s unds ets , bank26% co llectiv 501- Sur e 23% trus vey: t1000 s, lifeEmployee ins 22% urance3481 s26% eparat Bene e fits ac 0.07733 c 25% oin untPri s, and vate >2–5 Y 26% a 7.73281 nyIn po edustry o ars led 28% inveis nt m the ent 29% pr Unite o ducd t 30% S pr tates, imarily inv 30% March ested in 2013. Sponsor the assets Council of 40% plans of America offering 2013 such indicates funds Nin eth w their at 401 in i(k) n 2012, vestme Par the tic nt iav plin ants Tend erage n eups. umb N er of investment fund ot to Hold options available for bFigure 2 reported non-tar balanced funds get-dat as b active e ba participants lanced funds. in 401(k) A tar 44.5% g plan et-date s; in 2004, the fun 18.8% d pursues number of acti a lon 6.6% g-term ve part investment 17.0% icipants strategy, increased 6.6% usin to 53.1 g a mix million of asset (new Distrib to Holden, accumulate Simulation u Sarah tion of Participants’ Balanced Fund Allocations b >5– 60s an , 10 Stu Peter account dy Bra Based d bal y, ao and nce. n PlM an However ichael Design 50.2% H 39.5% , adley. a Mo rollover 5.5% dificat S&P 5 2006. from ions 00 “401(k) 6 of a .1% previous Large PlaPlan ny A 12.6% s: employer’s A ge S25-Yea pon28 sors.” .6 plan r % ReEBRI t could rospective.” Issue interfere 47.9% Brie 15 In .with f, 2vestment % no. this 34positi 1 (Apr Com ve il). pany in aggreg 140 ate >$100,000 P art 60s a icv ipa erage nts inc accoun 39 lud %e 39% the 24. t bala 0 m 10% illnce. ion $46,389 401 (k 9% ) plan part10% icipa $119,461 nts in t8% he year-end 8% 201 $270,125 2 EB11% RI/ICI 401 (10% k) dat $343,985 abas9% e. 9% $323,835 22 9% Figure 33, Asset Allocation Distribution of Participant Account Balance to Company Stock in 401(k) Plans With .......... 32 This 32 Available report is an at w uww.ici.or pdate of g/ EBRI pdf/an per d 1IC 7-I’s 10 .p ongoi df and ng research www.ebri. into org/ 401(k) pdf/brie plan fspdf partic /EBRI ip_ ants’ IB_12- activity 2011_No through 366_ 40 year 1(k -end )- All 44.5% 18.8% 6.6% 17.0% 6.6% Age the sea cn urd ityacco indic >$20,000–$30,000 aunt ted. balance are positive 26% ly co 25% rrelate22% d amon 4.2% g 27% particip 26% ants covered 26% by 28% the 2012 29% databa30% se. Examination 31% of 30s 67.8% 33.37 4% % 8.0% 46.1% 38.2% 7.9% 5.1% 8.1% 4.1% 1.9% 3.2% 2.1% 9.4% 3.1% ratios variation. Other (Figure resear From ch 17). 19 suggests 96 In throu additio th gat h n, 20 most for 08, any 401(k) on given H aivgh erage, participants Co age ncentra less and th ten do an tu io not re one-fifth ns com make in b Co inati active change of mp 401(k on, any the S ) tpartici ratio os ck to o their pfants accou asset with nt allocations bala accence ss to toloans during salary hany ad varies Brady, Equity, bond, money, and/or Peter, All and Michael Bogdan. 2010. 43.9% “A Look at Private-Sector 3.4% R 13.3% etirement 2012 E Plan B Income RI/ICI After 42.8% ERISA.” Investment 39 Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. 100 Plan Assets-- 1001- Percentage of Account Balance Invested in Balanced Funds 5000 9054 0.20113 20.1128 participant Washin 10 $30, %T contributions > en gton, 000 1u 0– re ( 20 year DC: s) U.S. cwas De Di 19 pa st among rtment ribut40 the ion of .5 % 686 Labor, of plans 40Bure 1(sk) uau rv P eyed; Aon Hewitt 2013 indicates an a o l8 a f .1 n Labor % s, PStatistic articip 0–2 Y sant . Available 3 ears 3. s, 9% and at Assvet erage s 17.number of 20 5% 120 Note: R 401(k) Plan ow percentages A sset may ns o t add to 100 percent because of20s rounding. 2.7% 6 2.3% correlati method) classes, See Institute Available Holden on or 30 from % because asset R e 44.4 at te search al. www.ebri.org/pdf/bri allocation, million 2008; a rollover PeHolden, (old rspecti that could method; v the Van egive 1fund 2 Defspdf/EBRI_ , erhei see a sh no.provid U.S. ,o 2 r and t- (November). tenured emplo Department er Alonso ad IB_0 justs 2009; 4-20 A to of v 10_ y ailable b ee a high a Labor, Holden, ecom No3 4 e at Employee 1 VanDerhei, less _ w Au cco wto-Enrl.p w fo unt bala .cuse ici.org/ Benefits and d on d nce. pd f Alonso g f/ Security rThere pe ow r1 th 2010; 2-and is 02 Ad some .pd ministration and more f discernible Holden focuse 2008b et d al. evidence on 2011 and Plan a >$30,000–$40,000 s With GICs /Sta cble-Va 25% lue Funds 25% 23% 26% 26% 26% 28% Bar1.9% 28% clays Capital 29% 1.7% U.S. 30% Figures Company Stock, by Participant Age 40s 64.5% 37.2% 9.7% Percentage 39.1% of 31. rec 9% ently hired 7.2% participants 5.9%offe9. red 9% 30s com 5. pany 1% stoc 2.5% k holdi 4.ng 4% the 3.1% 8.0% 3.4% Report availability: 2012. Update. The Account balances are based on administrative records and cover the account balance at the 401(k) plan participant's current emp rp ed port f is divi This dedr e into port four is availa sectible onson : the the firs Int tdes ernet crib at eswww the 2007 .EBRI/ICI ebri.org an 40d 1( ak) t ww databas w.ici.or e; loyer. Retirement g t he second presents a Indivi balanced funds; and GICs dual 40 0–2 1(k) participan and/or ts’ asset 27% allocat 24% ion to 27% balance23% d funds 21% varied wi 25% dely aroun 22% 13% d an 19% avera 13% g21% e of 22 13% percent 22% at the 40age composition of account balances finds that 51 percent of participants with account balances of d less than somewhat loans given year. outstanding. wit > For 20– hexample, 30 salary. At year For an -e example, IC nd I survey 2009, amon of t 37 he .4 reperce % cordkeepers g partici ntage pants of coveri p in 1 artici 0.th ng nearly 2 6% eip r ants 20s, who th 4 millio e ratio were 3n DC plan participant 5. ten o 6% ffer ds etd o loans increase with 1 slightly 6. lacco o 4% ans unts fo outstandi with salar und that n yg for Company 100100 IPe Age Group nPar stitute rce tic nta ipants Rge esearch o-f- plans Perspectiv , par >0–50 percent >5000 ticie pant 16, s, no. and 2 16888 (Nove assets m >50–90 percent 0.37516 ber). by nu Availa mber37.5156 ble of pl atan www.ici. partA ic ggregate B >90 percent ipan org/ts, pdf ond 2 /p 012 Index er16-02.pdf Asset Allocation b ? The bulk of 11 401(k) asset y Investment Opti s contin on ued s an to be inv d Age, Salary, an ested in stocks. d Plan On Size averag e, at year-end 2012, 61 percent www.bls.gov >$40,000–$50,000 /ncs/ebs/benef 24% its/20 The Em 1325% /eb plo bly0ee 052. 23% Benefi pdft Research Institut 25% 26% e (EB 25%RI) was founded in 1978. Its 27% 0–2 Years 27% 27% mi29% ssion is to investment savings held in plans at previous employers or rolled over into IRAs are not included. Account balances are net of loan balan 1–100 options in 2012. Deloitte 43.9% Consulting 16.0% LLP, International 6.6% 2% Foundation 9.1% of Empl 3.9% oyee Benefit 16.3% ces Plans . , and the International Thus, to ascertain what is happening to 401(k) participants’ account balances, a set of consistent participants must be 2010b). As the U.S. Department of Labor notes: “In a purel income over time. Non-tar percg entage et-date of ba thlan eir cacc ed ount fundbalance s include y ec indi onomic asset cated 30s allo sense in cation com and pany orfor hybri sto rese cd karch ,f 1998–2012 unds, purposes, in addition individuals to lifest in yle these of and 50s rollover 2012 60.5% for assets Age Group >data 2–5 35.0% among for earlier 11.3% the y pears. a 35. rticipants 7% 24% >0–50 percent 29. with 25% 2%account 25% 6.5% balan 21% ces 6.greater 6%>50–90 percent 22% 13. tha 0% n26% $100,000, 5.9% 23% 2. as 7% 1 percent 20% 6.7% >90 percent of 21% them 5.4%had 21% 6. two 5%or fewer 3.3% other stable-value funds 41.8% 15.5% 7.3% 9.5% 2.2% 18.0% snapshot bof > 3 participant 0 account balanc 4es 1.0% at year-end 2012; 12.1 th %e third looks at 33 partic .0% ipants’ asset 14 al.0 locations, % including year-end 20 80 12 (Figure 20). For example, nearly 43 percent of participants held no balanced funds, while 32 percent of Figure $10,000 1, w 401(k) >$50,000–$60,000 ere in Plan th 20s eir C 20s harac or teristics, 30s 24% (Figure by 24% Number 1 11.3% 1). Similar 22% of Plan ly, 624% 0 Participants, percent 25% 8.8% of p 2012 articipants 24% ................................................... 25% with accou 26% 79.9% nt ba26% lances gr 28% eater ............ than 7 Longer-tenured participants are used in this analysis to capture the longest possible work and savings history (see note a). T contribute to 60s , to encourage, and to enhance the development of sound empl he tenure variable tends oyee benefit low-to ticked Figure 9.7 percent -moder up 34, 0% 20to % 101–500 Ma 100 of 21 ate ny DC percent Par Rec salary plan tic ently participants ipants 34% an gro Hired d uremained ps -- (Fi 401(k 42.4% cha gure n)ged at 18). Pl tahn the at However, Partic 16.1% lev asset el ipants fr alloca om at year-en Hold hig tion 5.8% h of salary Batheir d lanced 2010 le account 10.0% vels Funds throu the balances g ................................................... h ratio 2.2% year- teend nds in 2012 20 to 17.6% 12. declin an d Ho 6.6 e wever, somew percent not hat. changed all A ...... 32 12 20s 36.3% 14.7% 49.0% Asset allocatio of 40 >1 5–10 ( nk) also part vari icipants’ es with assets partici 23% wer pa21% n et in age; vested 23% Figure in equity 23 19% demonstra secu 18% rities tes throu 24% this gw hi th equity 20% an analysis fu19% nds, to hfe 20% ae sset quity allocation porti 18% 60s on of by Society Holden, VanD 25 Equity, bond, money, and/or % erhei, of Sarah Certified Jack, , and and Employee Da Crai nielg SCopelan chrass. Benefit Specialists d 20 . 13. 2008 “De . “The f2013 ine d Impac Cont report ribution t of th at the av PPA Pla onn era R P earticipants’ tirement ge number of f Savin Activities, g unds offered b s for 40 2 17% 012. 1(k)” Participa y ICI the nearly Research nts.” 40 EBRI Report 0 This analyze 60s paper 50. d0% . Futu is 30. an re 1% an researc nual 12. 1% update h will 31. e0% to xamine ICI an 25. lid nked 0% EBRI’s data o 6. n to 1% goi ana Fn igur g l18% yze re e 8. sea 7% 22 thrch e co 16. int nsistent 9% o 401(k 7.8% sampl ) plan 3. e 3% partici of partic 13. pants’ 3% ipants activity. 9. in8% the Th EBRI 5. e 7% pr /IC evious I data 3.4% years of tenure groups funds. . should 201 Co Sa to be years with the current employer rather than years of participation in the 401(k) plan. One reason that job tenure may not lm a2. ry p not ,“4 a and 6 percent n 01 be y st (k) included oPla ck nis Asset eq of them had b in uity the Allocatio count in the of plan’s netween two and five , active Account sppart ons Bal icipants.” or ances, (the em years of However an ploye d Loran ). tenure (see Figure 12). , the Mo Activity form ney fu ischedule n nds 2011.” consist needed ICI reflect length of Res of to those earch make fun Perspec the ds designe tive d >$60,000–$70,000 23% 24% 22% 23% 24% 23% 25% 25% 25% 27% Who we are 20 $20,000 30s 23.8% 30s 40.9% 15.5% 30 10.1% 12.6% 74.4% 46.5% analysis of 501–1,000 401(k >10–20) participants’ use 15% 42.0% programs and so of tar14% get-dat 15.9% e, 16% und public policy or lifecycle, 13% 7.0% funds; through objective 13% 9.7% and 17% the fourth 2.0% resear 16% fch and ocuses 14% educati 17.3% on par 15% on. EBR ticipants’ 14% I is the only 401(k) partici p . ants 2013. he ld “A more Look 23 tat h.an 2Pr % i80 vate-Sector percent of R e their tirement accou Pla nts n in Income balanc After ed funds ERISA.” at the ICI en Rd esearch of 2012 Perspective (Figure 31 ). 19, At no. year-en 8 d 40 $100,0 balanced funds; and company stock 00 were in their 50s or 60s. Th 32.3% e positive 18.6% correlation betwe 11% 5.1% en age and 13.0% account bala 5.5%nce is expected becaus 18.3% e similar partici U.S. the asset De ppatt ants partm participation in the 401(k) plan, particilarly among older participants, is that the regulations for 401(k) plans were not intr allocation ern 100 he ave nt occurs Plans of access of Labor, their -amon - to contribution Employee 401(k) g partici 22.7% plan pants Be s during 2012 (see sum lo ne ans—factorin in fits thS eir ecurity 60s 45016 (Fi g Administration Holden and Sc g in ure all 19). 401(k ) .partici hrass 2013). C 2008a. pants Privat wio e th vering a year Pe an oduced until 1981 nsion d without Planearlier, the ICI survey Bull loan . etin, access Abst in ract the of All 64.8% 33.9% 9.1% 40.3% 32.9% 7.4% 5.7% 10.7% 4.9% 2.4% 4.6% 2011 Form 4.1% 6% 5500 8.6% 3.3% investment balanc options ed funds, and also and compa by participant ny stock. age. Thirt Because y-three a percen sset allocatio t was in n fixed is influ -income enced by securities 40s the invest such ment as stab options le- 13 value For (April Issue year-end ). Brie >$70,000–$80,000 Ava f, 2011 ila no ble . data, 31 at 8 ww (Jun sew.ici e e). Holden 26% .Available org/pdf et al. 23% /p at pr_ 2012. ww 13_r w 22% .ec_survey ebri.org/pd 22%_q4. f/bp rie 23% dff spdf/e 22% bri_ib_0 24% 6-20087 24% .pdf 24% 26% updat 401(k) plan sp Figure e 2, was Distribution $20 “ 40s 4onsors surveye 01(k ,000–$ ) Plan 40 of ,0401(k) 00 Asset d was 19 in 20 Allocatio Plans, 6 Part 1. n3% , 40.1% 12. icipants, Account Ba anlan d Assets............................................................... ces, 5.4% and Loan 12.9% Activity 23.in 2%2011,” publishe 47.0% 10 d .2in %Decemb ................... er 2012. 7 collection effort from 2007 through 2012. Figure 31 Fig adjustment to maintain ure 35, Ma is a >Dist 20–30 no ny stable longer Rec ribu ently shar tio required. n e o Hi price. fred 401( 40 Using 11% Sta k) 1(k b Plan le )Na -va Pl10% tional as, Part lue n Partic products, Compensation 11% icip ipants an such tHold s, an 9% Survey as Target-Date d A guar 8% sset data anteed in s, b 12% and Fun y In historical dv s ves est 11% ..................................................... men tment co relation t 9% Opships and trends evid tntr ion 10% a s, 2012 cts (GI 9%Cs) and ent in 32 18, no. 1,001–5,000 9, an40s d EBRI Issue Brief, 39.5% privat no. e, nonprof 3 17.3% 80 18.1% (December). it, nonpartisan 6.3% Ava , Washington, DC-b ilable 9.8% ww 9.0% w.ici.org/ ased organi 1.9% pdf/per1 zat 8- 73.0% i09. on com 18.2% pdf m an itted exclusivel d y to Equity, bond, money, and/or 10% 18% 22% 43 loan activity. Share of Participant's Account 2012(Octobe , nearly r). 58 Av pe ailabl rcene t of at 40 www.ici.org/pdf 1( k) part dicipan /p ts er19 held -0 b 8.p alad nc f ed funds, up from the 56 percent of participants 50sholding younger work >$80,000–$90,000 100 50s ers Plans are likely -- to have 23% lower 23% 38.1% incomes 21% and to21% have had 23% les 13.0% s time 21%to accu 23% mulate 23% a bala 48.8% nce 23% with 25% their current 25 2005 21.3 Form % 5500 Annual Reports. Washington, DC: U.S. Department of Labor, Employee Benefits Security database, of recordkeepers Sourc only >$ es 40 : Bloom 18 ,0covering 00 percent berg, Barc –$60,0nearly lay 00 ha s Gd lobal Inv loa 24 nmillion es s tor outsta 51 s, Frank .4DC %ndin Rus plan sell Com g at participan pany year , and Standard & Poor's 21-end % 7.5 t accounts %2012. fo O . und n avera that 29.g 3% 1 e, 0.5 ovpercent er the past of DC 117 1.plan 8years, % participan 1% among ts PLANS WITHOUT >30 COMPANY STOCK, 14 GI 7%Cs, OR OT 8% HER S 10% TABLE8% -VALUE F 7% UNDS 9% 9% 7% 7% 7% available investments to >5pa ,000 rticipants, and bon Figure d an 24 d 42.6% money presents funds. asset 13.8% allocation 8.1% 6% by salary 9.5% range and 2.2% by investment 18.2% options. Salary Because 401 balanced funds, company stock; (k) plans were introduced abo public poli ut 32 years cy research agand o, oedu lder and longer- cation on econ tenured e omic securi mplo ty ya ees wo nd emuld no ployee b t have p enefit is articipated sues. 50s 19% 16.9% 9.3% 1.3% 1.5% Balance 73.8% Held in Company 0 the other Form ww stable-v w.ebr a 5500 60s i.org data, alue f /pdf EBRI /b unds riefs and ,pd ICI A fare /sset Eestimate BRI_IB 38report All_1 ed o 36.4% the cati 2- as 2 number 012 on on e _No Di cat stri of 3 e8 gory. a0 buti c.40 tive1 The on k-eoy2 401(k) of other 12.8% 401(k) 01 participants 1.p category dfParti to is cbe ithe p ant about resi dual 52 50.8% million fo r other in 2012 invest an m d ents, the >$90,000–$100,000 22% 22% 21% 18%20% 22% 20% 23% 22% 22% 24% 11 41 Figure Inves 3, All index 401(k) tA m ccou entn es tOpt S are s Plan izeions et to 100 in Dec C Of harac fered teri by emstics, ber 2002. Plan Nu by mb Plan er of Assets, Plan 2012 P ................................................................... lans Participants Assets.................... 7 >$60,000–$80,000 44.3% 8.5% 33.9% 13.3% Figure balanced 36,fu Ma nds c ny at Rec year ently -enHired d 2011. 401(k At ) yea Parr-en ticipants d 201 Hold 2, balance High Co d fncentr und use ations by partic in Bala ipants nced occurred Funds .............................. through target-date 33 Year-End 2012 Snapshot of 401(k) employer. A In ll addition, they are less 41.8% likely to have 15.5% rollove Participants’ Asset Allocation 17% rs 3. 7.3% from 9% a previous 9.5% employer’s 2.2% plan18.0% in their current plan partici VanD Holden, changed the 20s The In the Administration erhei, 77. p asset ants Sarah datab 8% Ja as all wi 26. a ck, o , set allocation of their a th se, there has cation and 5% loans and (Fe Jack path 7. Lori bo 8% ruary). u Van tstandin L that u been a downward trend in 40 cas. D 60. 16erhei. % the A 6% v20 g, ailable target-date 10. ccount balances in 20 a 2001a b53. out “T at 3% he 14 . ww “401(k) Im fund perc w.dol. pact 7. ent follows 3% Pla o gov/e fo n Auto-Enrollme f1(k) 11 and 7.7 per the Asse to b7. splan shift rem a 7% t /p Allocatio df a participants’ its focus inin /20 7.2% g n 0c t 5account ent n p an , e from Account ns d 4. changed Autom 9% ionplan holding gr balan owth 1. Bal atic bul 9% s thcof e ances, to e le Contri , asset rema income tand in.pd 4.0% concentration an buti allocation ine Sto f d ove d c on Lo kur n an Escalation pai time of Activity d their is (Fi in, typical gur company on in e 1999.” 46). ly 20% All EBRI’s member 38.8% ship includes a cross-section of 13.3% pension funds; businesses; trade associations 16% 47.9% ; information and GICs b is and/or other stable-value availabl 60s e for a subset of part 16.4% icipants in the 2012 EBRI 8.3% /ICI 401(k) database. 75.3% Participant asset 15 allocation in 401(k) $10, plans 0% >$100,000–$200,000 000 for their entire careers. 22% The R 20%evenue Act of 19% 18% 1978 contained 19% a provision that became Inte 18% 19% 19% 19% rnal Revenu 21% e Code <100 partic Leipa ss Tha ntsn $10,000 100 to Par500 ticipants >$40,000–$50 501 to 1,00 ,000 0 1,001 to 5, M000 ore Than $100,000 >5,000 The S&P 500 is an index of <$10,000 500 stocks chosen f 39% o39% r market size37% , liquidity, and indus 35% try gr36% oup representation. 39% 39% 35% 37% 38% number such as of real 401 estate (k) plans fund to s. be The about final A515,000. ccount category, The Bal unk 15% estimate a 15% nce nown to, of Bal consists the anced number of assets Funds, of active that by 401(k) co A uld g 15e %plan not be participants identifiedis . based on a >$80,000–$100,000 38.6% 9.3% 37.9% 14.1% Brady, Peter, Kimberly Burham, and Sarah Holden. 2012. The Success of the U.S. Retirement System (December). Equity, bond, money, and/or balanced funds Size of 42, Ac 165 count Balance 8,678,685 $469,802,480, 44 229 30s 77.9% c 34.2% 8.4% 49.2% 43.6% 5.6% 7.2% 9. 2008 9% 4.8% 2.5% funds funds anPlan d no s Wit n-target h Co 0–2 mp -date any St balance ock labor un d> f 2–5 unds: ions; h 41 percent ealth car >5–10 e prov of 40iders and insur 1(k) part >10–20 icipants ers; government org held tar >20–30 get-date anizations; funds, and service firms. 19 >3 0percent held accounts. ? Seventy-two >$200,000 All percent of 4 18% 01(k) plans included ta 34.9% 15% 14.9% 13% 8.6% 13% rget-date funds in t 8.8% 13% 12 9.4% % 12%7.9% 13% h 13 2.5% eir investment line % 12% 75.7% 17.3% 12% 13% up at 14.9% stock. Investment Retirement In the The Rus wake sell 2000 Index Income Coof mpany the Adequacy.” collapse meas Inures stitut the perf of e Enron Pers EBRI ormanc pective e of in Issue the 2,000 s 2001, 7, Brie participan no. mf, alles no. 1 t U.S. c (Jan 34 ts’ aware om 9 u ary), panies (November). (bas an nes ed on total m d s of the need t EBR I Available Issue arket capitaliz Br o at ief, diversify may ation) inc no. luded in the Rus 230 (Febr have increase su eary). ll 3000 Avaid and lable U.S. referred At contributions year- Departm end to as $10, 2de the 012, unt 000–$20, ring glide of 3 2011 9 Labor 000 perce path. (se data nt e Since Holden ofin 40 32% dicate discussi 1(k and ) th pl 32% on Schrass an at s loan of paasset rticip 31% 2013). amoun ant allocation sAnalyzin t’ 29% s account tend ug 2 s to 30% u a ba be 012 lly laa focu data, The nces ne 33% s gli on w ge ibl re the e 31% Van in po percentage vested guard Group 2 rtion 28% of in pl eof q an ui the 30% ty a013 reported that “only ssets. fun portfoli ds, 30% on o invested average, in Figure 4, EBRI/ICI 401(k) Database a Represents a Wide Cross Section 27% o 12 f %the 12%12% 401(k) Universe ..................................... 8 also varies with plan size (Figure 25, top panel), but much Salaof ry Ra the ngvariation e 11%a,b can be explained by >90% differences in the Figure Sec. 401(k). 37, . 201 Ma >$ 3. The 10 ny “4 0, dlaw Rec 01 00(k) 0went ently Parti into Hired cipants effect 11401(k % in on 16.7% th ) 30 1–25 Janu Par e .8Wake % ticipants ary 1, of1980, Siz the Hold e of Fi bu nancial High 1 Ac t 0.it 1% cwas ount Balanc Co 11 Crisis: %ncentr not until Changes ations e November 43. in 0% in Tar Ac g1981 count et-Dat that Ba e Funds lance proposed 16.2% s.......................... , 200 regulations 7–2011.” ICI were 34 Age Group c>0–50 percent >50–90 percent 11% 11% >90 percent Table of Contents Of which: target-date funds are an option 11% combination Index ( 1–100 of y w Ra hich tr data ngacks the 3,000 lar e from U.S. Department gest U.S. companies) of. Labor, Bureau 30, of Labor Statis 364 tics 2012 and 2 6,500,543 013; 10% U.S. $347, Depa 328, rtment 062,256 of Labor, Year-End 2012 Snapshot of 401(k) Participants’ Account B 40s Washin 74.0% Salagton, r 37. 1–100 0% DC: 9. Investme 9% 101–250 42.nt 6% 10 35.0% Compa %251–500 37.n 0% Per y In 17.2% 501–1,000 cstitute. entage 5.6% Avail of 1,001–2,500 Par 5.0% able 8.t3% ic at ipants ww 12. 2,501–5,000 13.7% w.i 1% , c 2012 i.org/ 6.0% 5,001–10,000 pd 9.6% f/3. ppr 0% alances _12_s >10, ucces 000 s_retirement. All Pl 10.1% ans pdf Plans Without Company Stock, and GICs, >$20,000–$30,000 28% and/or Other Stable-Value Funds 28% 28% 25% 26% 29% 27% 25% 27% 26% . 2008b. Privat 13.5 e Pension Plan Bulletin, Abstract of 2006 Form 5500 Annual Reports. Was 10%hington, DC: U.S. 9% 15. 9% 9% Years of Tenure 40s Participants non-target-date balanced funds, and 3 percent held both. Target-date fund use varies with 23. participa 9% nt age and tenure. year-end d 20s 2012. At year-end 20 About the EBRI/ICI Database 12, 26.1% 15 percent of the assets 8% 11.8% in the EBRI/ICI 401(k) database 62.2% a were invested in some equities, 12 [percent] at ww plan ww w.ebr the w sponsors .glide of ic i.org i.DC org/ path /plan pdf changed pd/b fgener /participants p rief 12. er0 9sa plan 7- plly d01.p f/ reflects E design BRI_IB d trad f an ed the (se d _0 w www.ebri.org/pdf/bri e declining i11 thin VanDerhei -201 their 0_percentage No3 accounts.” 20402). 9_EBRI_DCIIA. In e of Similarly, faddition, sequities pdf/0201ib The p some in df th .Va pd e of ngu f portfolio this ardmovement Group 2012 re as it approa may ches ported that “only 11 be the and result passeof s the the same So as urca et : Tyear-end abulations f2011, rom EB R com I/ICI p Pared art26–1 icipant with 00 -Direc 37 ted percent Retirem27 ent at .0% Pyear-end lan Data Co2008, llection P an rod jec4 t.8 percent at year-end 2007 (Figure investment Form $20,000 oerly ptions the Lehm –$40,000 offered an Brothers by U.S. Aggregate Bond Index plan 18% sponsor 8% 17%s. For , the Barc 13% exampl lays Capital U.S. Aggregate Bond Index 19% e, the percent 20% age 19% of plan is co24% m pos ased of sets se22% invested curities covering gov 25% in compa ernm25% ent and ny stock issued Research (see Sour Holden, ce: Pers Tabulations pective Brady, from an 19, EBRI/ICI Par d no Hadley . 7 tic a ipant- n 2006; d 8% EBRI Dir Percentage of Account Balance Invested in Target-Date Funds 7% ec Employee ted 7% IRetir ssue em Num ent Brie Benefit ber of Plan Data f, Part no.Research I icipant Collec 391 tion s in (October Plan Projn ecstitute 2005; t. ). Available and U.S. Intern at www.ici.org al Revenue 7% /pdf/per1Ser 9-0v7 ice .pdf Age Group101–500 >$30,000–$40,000 23% 35.7% 24% 17.7% 25% 22% 5.4% 23% 14.0% 26% 7.2% 25% 23% 24% 13.0% 24% Distrib 50s 70. Equit u 3% tion of Plans, Participan y, bond, 33.8% money, 11.3% and/or 40. balanc 4% 11.6 ed ts, and Assets 35. funds 4%, 5.0% by Plan Size 10.0% 16.1% 6.5% 3.7% Employee Benefits Source: Tabulations Security from EBR Administration I/ICI Participant-Direct 2008a, ed Retirement 2008b, Plan D20 ata C 10a, 2010b, 20 ollection Project. 11, 2012, 2013a, and 2013b; and analysis of Figure 5, 401(k) Sour 30s ce: TPart abulations icipa frn om ts EBRI/ICI Represent Participant- a 33.5% Range Directed Retir of Num em Ages ent ber Plan of ....................................................................... Par Data ticipant Collec s in tion 13.3% Plan Project. 53.2% 6% ................... 9 EBRI’s work advances knowledge and unders 14.6% tanding of emplo >y 50-90% ee benefits and their Percentage of Figure Introductio Account 38, balan Asset n.................................................................................................................. $0 participants ce Allocatio and tenur n e Dare istribution also positi of 4vely 01(kcorrelat ) Account ed amon Balanc g e parti to Ba cipants lanced in Fun the ds 2012 Among database. ........................................ Recently A Hire partici 5% d pant’s 5 Departm cNote: Per orporate bonds 12.4 ent centages of , m Labor, o rtgage-bac may 47 not add to 100 per Em .2% ked s plo ey cuee ritiesB , and as ce ent bec nefits se aus t-bac S e of e ked s cu rounding. rity ecurities ATd (rebalanc he mini tenur 5% stration e ed m variable onthly is by (Dece gener mark ally et c m yapitaliz ber). ears wation). The ind or Availa king at c 31 ble urrex ent 's at em total return c ployer, and ons thus ists of price Younger 15 Ag % e N partic ote: Ripants ow percent were ages m may ore no tlike add lty o to 100 Perc h per o ent ld cent age tar bec g of et aus A-dat c e co ount fe rof unding. unds Balanc "tE e h quit an Inves y o fun ltder ed ds”in partic inc Blalanc ude ipa med utn ual F ts. unds fun At ds,year-en bank colle d ct2012, ive 52 percent of 401(k) target-date Plan Loan Activity Varies Wi >$40,000–$60,000 Note: At b year-end 2012, funds the av and erage account 41 20% percent balance 23% oth Particip f among 401(k all 24.0 million 21% ) partici ant Age, Tenure, Account Balance, 26% 401(k) particiants pants in 28% the was $63,929; dat 27% abas the median e he 30% ld account target-date balance w 26% as $17,630. and Salary fun 26% ds. Al 4% so 28% 4%known 4% as regulations Sourcput e: >$40, Tabulations in 000–$50, place fr000 om by EBRI/ICI Par the Pension 22% ticipant- Protection 101– Dir21% ected 2,500 RetirAct em 22% ent Plan of 42% 2006 Data Collec 20%(PPA), tion 21% which Project.limited 24% the 22% length 20% of time 4%21% participants 4% 21% could be target date, [percent] 20). Altogethe 20s of 501–1,000 Note: which is usually in DC r, Tplan he equity tenur participants e var secur iable isidicated in the f ties—equ gener traded 34.9% ally year 33.4% ity in s wtor fhunds, keir und’s ing 19.1% accounts,” at c 41.4% ur th name. rent e equ employ T iin thy er 4.4% e 2011, , portion target and thus 8.6% down m date of ay 13.6% over balance from generally state 16 year 8.5% d percent sf u 6.9% of is n par the ds, tici pation 2.7% da in and te 2008, in at the com which 401( ma p kan )king plan. the y stock— it typical 18.6% “the lowest investor level The 60s EBRI 59.4% /ICI 40s 30. Participa Age Group 7% 11. nt-Dir 8% e 35. cted 6%Retir >0–50 percent 31. em 0% 33.9% ent Plan 4.Data 7% Collect 13.5% >50–90 percent ion Proj 21. 13.5% 2% ect is 12.the 2% largest, 4.8% >90 percent most 52.6% representative repository rises with and pl GIan Cs size, and/or in ot part, her stbecause able value few funds small plans offered company stock as an investment option. For example, less 1981). and ww apprec maySour w.e over iation/deprec csb e: tate y ri. Tabulations oear rg/ iation plus s pdf of par fr/ om tic b inc rie i pation EBRI/ICI Par om fs e as pdf in the 401( a /EBRI perc ticentage of ipant- k)_ plan. D IB irec _ the original inv 010 ted Retir -1em 3.No ent estm Plan Data 39 21, ent. 1092 .K-Lngt Collecd.p tion Pr df oj ect.6,629,570 $378,940,206,085 Burham, Kimberly, Source: Tabulations Micha f erl om B o EBRI/ICI Par gdan, an ticd ipant- Daniel Directed Schrass. Retirement Plan Data 2013. “Own Collection erPr ship oject.of Mutual Funds, Shareholder Sentim 23 ent, Factors That Affect 401(k) 1996 1997 1998Participants’ Account Balances 1999 importance to 2000 2001 the nation’s econo 2002 2003 2004 my among policy 2005 2006 m 2007 akers, 2008 the news 2009media, and 2010 2011the public. It 2012 samples Note: T of trus consistent tshe , liftenur e inse var uranc plans iable e se isparat gener in the e ally ac EBRI/ICI c year o us n tw sor , and king at c database. any po urrent o led em inv ploy es er tm , and entthus pro duc mayt over prim sarily tate y inv ear e ss of te par d in tic eiquit pation iesin the . The 401( tenur k)e plan. variable is >$60,000–$80,000 >$50,000–$60,000 18% 19% 23% 19% 20% 20% 24% 18% 19% 24% 21% 24% 21% 26% 19% 23% 19% 22% 19% 25% The tenure 100 20 12 wit Participa EBR h anI/ICI employ nts, 40by 1(k er Participant ser ) database ves as a Aco proxy ge ntai .............................................................................................. ns for informat the leng ion th of on tim 64,6 e 1 a9 wor 401 ker (k) has plans partici with p ated $1.53 in 6 the trillio 401(k n in assets ) .................. plan. an In d d 2e 4ed .0 35 , The Group ww Van 30s . w.dol. g 200 uar1 50s db gov/ Z . Grou ero “Tebs he p. Im a20 /1–10% p pac 12. df/t200 How of 6 Em 11–20% pAmeric ens aployer 46.8% ionplan a - 32.8% 21–30% Selecte Saves bulletin. 25.9% 2 d 012: I31–40% nves pdf A t ment Report 41–50% O 6.8% p on tions 13.5% Vanguar 51–60% on 401 11.3% d (k 20 61–70% ) 11 Pla Defi n 3.8% Partic ned 71–80% Contri ipants 53.6%bution ’ 81–90% Asset Pla Allocati n 91–100% Daons ta. : 1,001–5,000 36.9% 16.1% 4.4% 14.1% 5.4% 17.0% participants in their 20s held target-dat 2,5 e 01– funds, 10,000 compared with 34 percent of participants in their 60s (Figure 31). About Figure All 75. the 6, li0% fe 401(k) EBRI/ICI cyc33. le 7% fu Part 20s nd Databas s, icipa 9.th 3% e ns ts ee f 44. Re ................................................................................................... und 4% present s are38. de a 9% 7.8% Range signed of to 5.Job 5% offeTenur r a d 8. ive 2% es rs ................................................................ ified 8.0% 13.2% portfolio 5.7% that 3.a 2% utomati 84.1% cally re .............................. balances ............... to be mor9 5 e fo required observed since [they] began t r whom that fund is design to hold Of wcompany hich: targetstock -dat erd wo e acking this dat fcontribute unds uld reach retirement age and sto are an d to opt a in 1999.” their ion accounts Utkus and Young 15, by 334 their p maki empng new invest l2010 reported that 13 percent oyer; 4, spec 568,ified 159 ments in the f rules regarding $258, und. 469, of DC plan the 386, notification 815 of represented of information 61 about percent individual of 401(k 4) 0 1 plan (k) pla parnticipants’ participaassets nt accounts. at yearAs -en of d Dec 2012. ember 31, 2012, the EBRI/ICI database than 1 percent of participants in small does this b plans (100 y conducting participan and p ts or ublishing policy re fewer) were offere search, analysis, d company stock and special reports on as an investment In the 20 ge 12 >$80,000–$100,000 nerally > EB $60, R y 000–$70, I ea /I rCI s wo40 000 rking 1( k) at c d urre atab 17% nt 16% em ase plo, y 8.4 87 er, 21% 17% and petrce hus17% n m 18% t ay of o p vers arti 22% t16% atc e ip years ants o 17% 21% f wer partic ei pin at 19% 20% i opl n ans in the offering 401 19% 23% (k) plan. loans. 17% 20% Ho 18% wever, 19% 17% as 21% has been and Use 60s of the Internet, 2013.” ICI R 50s 32.1% esearch Perspective 19, no. 12.8% 9 (October). Available at 55.1% www.ici.org/pdf/per19- What we do 40s 50.3% 18.9% 6.4% 13.6% 4.7% >5,000 31.1% 19.2% 7.5 5.2% 11.2% 12.6% 5.5% 18.7% 20s 30.4% 2.4% 2.6% 2.1% 1.5% 1.5% 2.6% 1.4% 1.3% 1.3% 52.8% million 26 61 percpartici ent ofp partici ants d (Figure pants wi 1) th . As account is the b ca alse ances in thof e 40 less 1(k) than universe $10,00at 0 h large, ad five most or fe of b,w c the er years plans oifn t e th ne ure, data whil base e 7 ar 7 e In any Valley Prelimin given For ary yg ee, ar, Fi 30s ndin PA: the Th gs.” cha e n Van Worki ge g in uard n a g partici paper Grou >10, p 12.0% p, 00 prepared ant’s 0 Vanguar accou for dn C t te h balanc nt e C er ent for e er is Ret 9.8% for thie rem Pensi sum ent oof n Ran th esearch. ree d Re factors: tirement Available 78.2% Re searc at h (CPRR) Current Recently hired >$70, partic 000–$80, ipants 000 were 16% more likb 15% ely to hold 16% target 15% -date fu 16% nds than 18% those 17% with more 16% years 16% on the 16% job: at year- 3 focused >$100,000 All on income over 14% time. emplo y 16% ee benef 31.0% i 13% ts issues; holding educational br 6.4 16% 14% 12.9% 14%iefings for EBRI memb 16% 14% 56.1% ers, congressional and 14% 16% PLA Holden, blackout periods; and required Lo NS W w acco Equit I TSarah Hy G unt , bond, IC E, s balances quJack A ity Fun m ND/ oney, Va d OR OT s nDer among and/ HE hei, or quarterly st C R S balanc this omp Luis T aA ny S group B ed Alons L to E fcunds -V kate ca Ao L n ,ments , UE be and B F aexplained UNDS laCrai nthat ced g Fu mu nds Copelan in st tw include o dpossible . Bo 2008. nd a Fu notice nds ways: “401(k) highli (1) G ghting Pla ICs their n an Asset employer’s d the Othe importance Allocatio r 40 Mon 1(k) ne , of y Fund Account plan diversification s has o nly participants Figure 50s 39, Average traded in Asset their All retirement ocation of accoun 44.5% 401(k) ts in Accounts 2009, 17.5% ana by lyzing the plan Partici 6.7% pant As administered ge an 18.0% d Investment by Va 6.9% nguard. A Options Among on Hewitt 2013 401(k) included statistical information about: 22.8% option, EBRI/ICI the See In case vestme whil for 401(k) Ae l lthe 55 nt Company In 17 perc Data yea ent base rs otha f...................................................................................................... partici stitute 2013. By 2013:Q3 t the 32.3% p data ants ba inse pla has 18.6% ns tracke with, m 40 d o1(k) 4 re 01(k 5.1% than plans ) plan 5,had 000 par 13.0% $4.0 participants ticipants, trillion 5.5% in rewere lat assets. ively offered few parti c ................................ ompany cipants 18.3% stock made as use an of 5 Figure 30s 09.p 7, dDom f 38. estic 1%Stock 4.5% and Bond 4.3% Market 3. Indexes 7% .............................................................................. 2.5% 2.2% 2.5% 1.7% 1.9% 2.1%................. 36.5% 24 12 9.3% 12 . 201 Source: T 0a >$80, . abul 000–$90, Private ations from 000 Pe EB nsion RI/ICI P a Pla rti 14% cin pant-Di Bulleti rected Reti 14%n, Abstract rem 15% ent Plan Data Col of 14% 200 23.0% le7 ctiForm on P 14% roject. 5500 16% Annual Stab 16% Re le-Vports alue F 15% u nd (V sersion 15%1.4). 15% Washington, 80 177.7 40s 0.10847 10.8473 13.7% 9.5% 76.8% small: perce 10% n47 t ofperc parent ticipants of the with pla n account s have 25 balan or fewer ces gre partici ater tp hants an $1 , and 00,028 00 2009 pe had rce more nt have than 26 1 to 0 ye 10 ars 0 partic of ten ipants ure (F(Figur igure e 12 2). ). In https://institut Pension Policy iIssues onal.vangu Confar erd.com/iam ence, federal agen at Miami /pd cy f/HAS1 s University, t aff, and th 2.pdfe news Oxford, media; OH,and sponsoring public opinion survey June 8–9, 2001. 9.2% s on emplo yee 20s Lifestyle f 60s 73. and 4% cu om nds maintain a p 29. pany 6%stoc 7. k3% r45. edetermined risk level and ge 1% 37.9% 33.0% c 16.1% 12.1% Inves nerally tm 544 3. en9% t Cate 6.6% use go6. ry words 0% such 2. 3, 22.9% 9% 493, as 963 “co 0.9% nservative,” 9.6%9.1%$229, “moderate,” 750, 3.7% 055,920 or end 2012, $70, 52 000 percent of participants with two or fewer years of tenure held target-date funds, compared with 40 Changes in Asset Allocation between Year-End 2011 and Year-End 2012 (see recently found Balances, U.S. that been Plan Joint 14.e Participa 5 and Committee stablished percent Loan nof ts Activity (79 on pa Wit rticipants Taxation percent h Two in 2007. or of 2006). traded Fewer all ” 401(k)- Inve in Year stment their type s acco of pla Co Tenur unts mpa ns in e in nexistence ........................................................................... y 2012. Institute Similarly, in R 2011 esearch Aon were Hewi Persp established tt e2012 ctive found 14, after no. that 1992 3, 14.6 an [tabulations d EBRI pe 8.4rcent % ..... 36 of of Plans With Company Stock and GICs /Stable-Value Funds investment 40s Note: T o >p $90, he tenure vari 43. tion 000–$100, 6%in 2abl 0 000 1 5. e i2 s 8% . general Thus, ly years w 13% 4. to 9% an orki alyz ng at current 13% e 4.the 4% pot 13% emple oyer, and thus m 2. ntial 8% 13% effect 2. ay overstate years of parti 4% o 13% f plan size, 2. 15% 4% 7.9% the cipati 15% rema 8.1% 1. on i 7% n the ining 8.0% 14% 401(k) pl 1. panels 8% an. 14% of 1. Fi 9% gure 14% 25 28. gro 2%up this borrowing privil c ege. At year-enad 2012, 21 percent of those eligible for loans had 401(k) plan loans outstanding Age Group >0–50 percent >50–90 percent >90 percent 50s 13.1% 8.9% 78.0% Sources DC: ? Ne U.S. and w De contr Types partment ibuti of ons Data of by Labor, ..................................................................................................... the par benefit issues. Employee ticipant, Bene the EBRI’s Ed employer, fits Secur ucation and Re ior ty Admin both; istration search F (June und (EBRI-ERF) performs ). Available at ............................ the charitable, 5 Plans With GICs 169.9 Of whand/or Other Stable-Value Funds ic0.10371 h: target-date 10.3711 funds are an option 5.5 30s 73.5% 32.8% 8.1% 44.8% 35.1% 9.7% 441 4.1% 6.6% 2. 2, 8% 682,263 1.2% 7.9%$166,279, 5.0% 586,231 contrast, 4 Examinin ? More new or recent hires inv g only the 2 interact percent ion of otfh both e plans age have an e d sted more tenure th than eir 401(k) a wit h 2, ac 500 count partici ssets in balanced f balanc pantess. However, reveals that, participants u nds, for a includ given an age d ing assets target-d gro 7.4% up, are avera ate ge “aggressive” Figure 8, Perc >in $100, ent their 000–$200, Chname ange 000to in indicate Total 10% Reth turn e fu 9% Inn d’s risk level. dexes 10% .................................................................................................. Lifestyle fund 9% 10% s generally are inc 11% 11% luded in the no 10% 11% n-target- 10% date 12 percent • 24.0 of milli 1–100 participants on 401(k) with pla n more part32.7% icipa thannts, five in to 18.1% 10 years of 7.2% tenure, and 8.4% 23 percent 4.7% of participants 15.1% with more 6.6% than 30 Sourc 20se: Tabulations from EBRI/ICI Participant-D20.4% irected Retirement Plan Data Collection Projec 13.3% t. 66.3% U.S. The Emplo Issue Department Brie yee B f, no of enefit Research Institute ( . Labor 324 (D Form ecem 5500 ber)data . Availa fo Er Bble 2011]), RI) is a no at ww or w.ici.or npro (2) the fit, no g/ employee pdf npartisan, public policy resear /per1only 4-03.pd recently f and joined the ch plan organization (whether o that n his does or her not participants Choi, 50sJames traded J.46. , David 5% in their Laibso 6.2% accounts n, Bri4. gin itte 8% 2011, C. Madrian, 4. and 5%12.9 an perce 3. d 0% Andre nt ch w anged 2. Metr 5% ic th k. e 2. 20 asset 4% 01. allocation “Defi 1.7% ned of Contri their 1.7% buti contributions. on 1. Pe 8% nsions: Aon 24. Plan 7% Hewitt plans (Figur 20s e by 4i6nves ). As tment in 60s previous options y e and ars, plan loan educa 33.5% s acti ize. tiona 12.6% vity l, and varies 31.1% scientif wit Fig Figure 8 ic func h Median age, ureti 28 11.7% ons of the Instit tenure, 7.6% account 6.0% ute. EBRI balanc-ERF 1.3% e, an is a tax-ex 79.8% d salary. 6.3% empt organizatio Of those n Investment Source: a pe Tabulations from rformance EBR likeI/IC ly ex I Participant-D plains a good irected R deal etirem of ent Plan D Figure 46 Figure 17 tFigure 15 he fluc ata tuation Collection inProject. 401(k) participants’ asset allocations over time. 4.5 Figure 42 40s 69. 40, 0% Rec M >$200, i36. noe r in ntly 9% 000 vestm Hir ent 9.e o 4% pt d ions 401(k are 40. not 4% ) s5% Pl how an n; therefore, Parti 31.7% 5%cipants percentage 5% 8. Ten s7% do not ad dFigure 44 to 4% d Be to 5.10 0% Less 0 pe5% rceLike nt 7. . 8% Perc ly entages 5% to 3.Hold 4% are doll 5% Co ar-w 2.1% mpany eighted avera 5% 9.Stock 5% ges. 5% ............................. 7.0% 5% 37 60 ww E . quit . w.dol. 200 201 y86.2 , 1c 3. bond, 30s gov/ebsa/P . How “Contri m 0.05262 oney, Amb erica utio and/ DF/2 n or Saves 5.26187 Beh 00 balanc 7pe avior 2nsionpla ed 013: fof unds 27.8% A 401(k ,Re nbulletin. port ) Plan on pdf Par Vanguar t icipants.” d 2012 13.9% Inv Defi estment ned Contri Comp bution any Institute Pla58.3% n DaP ta. erspective Valley Forg 7, e, no. PA: 4, 101–500 32.3% 19.3% Figure 7.2% 19 8.0% 2.8% 15.1%5.1 7.0% concentrated account fun balan dsic .n es For lar ten gexample, e dpla ton in s. crease For at year example, with -end te 2012, nure. 68 perc For nearly ent exa o54 m f partic ple, percen tih pe ants t aver of ar th age e e in accou account plans nt with ba balance lances more o of t f hrece parti an 2, ntly c500 ipants hipart red inicipa partic thein r ts, ipants 60sand Plan- Investment specific information Options ............................................................................................................ on loan provisions is available for the majority of the plans in the sample (including ............................... virtually all of 6 balanced fund b category. years 60sof Note: Components may tenur Not50. e all(Fi partic 0% gure ipants 3 5. are not 2 8% ). off add ered to thi 100 percent s 4. inves 2% tment o becaus pti4. on. S 1% e e of e Figure rounding. 2. 22. 7% 2.4% 2.3% 4.0 1.5% 3.91.6% 1.7% 23.8% lobby ?30s or take Total positi investment ons on 28 legislative ret .2% urn on proposals. account 43.5% balan 23.0% ces, whic (mid-point) h de8.6% pends on the 6.8% performa 4.3 1.8% nce of financia 8.7% l markets and on 2011 found t own ww or through w.ebr hi.org at 14.2 percent of participants traded in their automatic All /pdf/briefs enrollment). pdf/E bBRI_IB supported b In either event, job tenure woul _1 11.4% 2a- y co 200 ntributions 8.pdf a and g ccounts rants. in 9.0% d 20 not 10, accurately and 14.6 p reflect ercent actual 79.6% changed 401(k) the plan asset 4.0 part allocation icipation. Rules, SP a40s articipant lary Range Decisions, and the 28.8% Path of Least Resistance.” 13.9% NBER Workin 2012 E g P Ba RI pe /ICI r, no. 57.4% 8655 (December). 5.6 Figure 50s 63. 9, 6% Snapshot 34.9% of 10. Year-E 2% Few n 37. d 5% 11. 401(k 401(k) Participants Had 401(k) A 1 Ratio of 401(k) )29. Acc 5% ccou ount n Ba t 7. lances Balances Greater 9% Accou ........................................................................ Outstanding 5. n 9% t Balance 10.1% Than $100,000, to Salary 401(k) Loans; 4.6% 1. , 3% 11.9% 11.3% ............... 13 Much particiof pants the c im n o pla vement Percent ns offerin in age of th ge loans, larg 401( est Percentage Per thcom e cent Change in Total Retur h k) ighest p Pl onent, an Part percenta of e Eligible quity ici ges fun pant 401(k) d of s, s Wi pa terticipants nds Plan Participants thout to refl n Indexes Equi with ect over outs ty Fund Bal atandin ll e quity g lom an ances arket balances pr ices, were whic among h • 6 4 and ,61501–1,000 c9om em pany ployer-s stock,ponsored and GICs 33.8% 40 and/ 1(k or) plans, 18.0% holding 6.9% 7.2% 2.8% 12.2% 12.9% 271.3 GICs Ratio of 401(k) are 10. 0.16561 guaranteed 3 10. inv 3est16.5609 ment Accou contractsn . t Balance to Salary Figure for Participants 48 in Their 60s, by Tenure 5% The and E Van $60, BRI g 000 uar Issue d Grou Brief, p, no. Van23 gu8 ard (October Center). for A vRetir ailable ement at w R wew search. .ici.org/ Avai pdf/lable per07- at 04.pdf and Age Composition of Selected 401(k) Account Balance Categories 40s 48.2% 16.4% 7.3% 7.9% 2.1% 11.5% these with Alup l same in to th tw pl $20, 50s eir o 42. ans 000–40, years 20s 5% account w 000 of ere tenure 5.i2% n fo balanc r 71 was 17% percent 4. e 4% d $24,276, funds, 19% 28.7% of3. all compared 9% compa plan 18%red a2. sset 6% with with 18% s. Because 51 $224,287 2. percent 3% 17%13.7% mo for in st 2. 21% 4% 2011, of partici the and p 19% plans 1. an 6% ts abo in have u 17% th t 7 eir 1. a 7% percent small 57.6% 60s 17% with number 1. in8% mor 1998. 17%e of th 31. A a6% n 30 the small plans 8.9 ). Some plans without this information are classified as having a loan provision if any participant in the plan has Figure 41, New 401(k) Participants Tend Not to Hold High Concentrations in Company Stock .................................... 37 the Note: allocation “Funds” incl ude m of assets utual funds in , ba an nk c individu oll8.3 ective trusal’s ts 8.4 , life ins account; urance separate ac and counts, and any pooled investment product primarily invested in the 60s Distributio 52.7% n 29. of 2% Plans, 11.2% Participan 33.3%ts, and 26.0% As by sets Participant by 7.Plan 4% 8.2 Size A 6................................................................... g 8% e and 12.T 1% enure 7.2% 1.3% 19.2% 19.1% .................. 6 of Distrib their Cambridge, contrib ution of Equity Fund Allocations 1,001–5,000 utions. MA: Natio Hewitt nal Associates Bureau 35.2% Loans T o2009 f Econo by reported 15.0% Participant ended to and Par mic Researc that ticipant Exposure to Equities Be 19.6 6.1% h. ASmall, g Available percent e and 1996–2012 Tenure of 7.4% atparticipan www.n2.1% bts er.or made g/passet ape 15.0% rs/w tra8 n6 sfers 55 12.1% in their account 60 With 401(k) Plan Loans, by Plan Size, 2012 13 partici p ot . ants 201 her s0 itn able b . their Privat value 30s, e funds Pe 40s, nsion or Plan 50s (Fi Bug lle ur tin, e 47). Abstract 4 01( In addit k )o L f i2 o on, 0 818 an 08 pa B Form rticipan alance 5500 ts swith Ann 5,217, u five al 610 Re or ports fewer (Version years $457, of 059, 1.0) tenur 678, . W e 540 aor shing witton, h generally 50s rose 60s from 19 Who Hav 97 through e Equi 19 Percentage of Account Balance Invested in Non-Target-Date Balanced Funds 99, 41.9% t b y 29.4% e Exposure, fore falli 14.2% Percentage, ng thr by ough Part 20 7.0% 2012 i02, ci 13.3% p ris ant ing A agai 10.2% ge or T n from enure, 2.3% 2003 throu 2012 57.3% 18.3% gh 2007, then 933.1 >$40,000–$60, 0.56959 000 2556.9589 17% 16% 16% 16% 15% 19% 17% 15% 16% 15% 5 2740 security indicated. GICs are ins Ag https:// ww e w.ebr pressr i.org urance compan /oom.vanguar pdf/briefsy products that pdfd /100 .com/nonin 1ib. Perc pdent f guarantee de age xeof d/ A 2c 013. ca s ount pecific ra 06. Balanc 03_How e te Inves of _Ameri return ted in ca_Saves_ Ton arget the -Dat invested e 201 Funds 3.pd capital f over the life of the Figure 10, Distribution of 401(k) Account Balances, by Size of Account Balance ....................................................... 15 partici years of pants, signific tenur th e ant e (Fi asset g su ure bset size 13of ).for th Similarly, at many bal a anced plans the fu is average nd modest. category acco About unt is in 1 5. balanc 7 ta 7 perce rget- e d n of ate t of partic fu thnds e ipants plans . At year ihave n their -en assets d40s 201 wit of 2, h $2 43 u50, p perc to 000 tent w o or of yle e the ars ss, of an o Holden, Distrib The It •u is $ tstanding In 1 possible vestme .53 u Sarah tion of Participants’ Company Stock Allocations >6 5 ,000 tr, lo nt illion that Jack an balance. Company these in Va assets. nDer older, Institute This may hei, longer-t an 34.9% d (ICI) Carol unde enured workers accumulated DC is rtQuick. state the num he 7.6% national 2000. ass “ber o 401(k) o9.2% ciat f io plans n o Plafn U. offering As 8.0% S. investment co plan assets set Allocation, loans 2.6% (e.g., (or part mpan Account in icipants a ies, profit-s 17.6% Bala including eligible haring nces, 15.4% for mutual plan) anloans) d Loa pri funds, o n r to All 69.7% 33.7% 7.9% 40.2%EBRI Issue Briefs 31.2% 9.is a monthly 0% 5.0% periodi 8.cal 3% with3. in 5% -depth 2.evalu 0% at10. ion of em 1% plo 8.y 6% ee benefit iss ues Percentage, 2012 60s Of All which: target-date funds are Percentage of 34.2% an 25.9% option 12.7% participants w6.6% ith account 13.6% 4.8 balances 11.4% 2.6% 47.8% 60.5% 27.1% balances durin >$60, g 2008, which was “up only Av 000–$80, erag 000 e and media 15%n loamarginally” from 2007 (although, they tend 13% n balanc 14% es for 401(k 13% 597) pa 12% rticipant 17% s w 2,i637, th 4 14% 965 01(k ed to ) move loan 13% slarger , $244, 1998–2 13%882, portions 012 461, 13% 235 of their Participants in 401(k) plans may hold equities through a variety of options including equity 4. 1funds, 4.1company stock, and 400% Age Group Percentage of >0–50 percent eligible 401(k) part 44 icipant .7% >50–90 percent s with outstanding 401( 3.9 k) l3. oans 8 >90 percent Figure drop more Relationship DC: pin than 42, gU.S. in Asset 3 2 00 De years 08, opa fAllocatio EBRI a rtment nd of risin t /ICI enur nof g D 401(k) e iLabor, from stribution were 2Data 0 less Employee 09 of base thr lik Recently ely ough Plans to Bene 20 use to 10, fits Hire th t h e m Secur d e lo o 40 U deratin an niverse 1(k ity provision )Admin Partici g o in f 2 All istration 011, pthan ant 401(k) an Acco oth d (Dec e Pla a unt r gpar ai n ember). s n Balance ............................................ trisin icipants. g Availa in to 2Fift Co 01 ble mpany 2 e e(Fi n atperce g ures Stock n 8 t of ain nd .... 20). 6 47.3 Percentage of Participants Without Equity Funds 3.4 ? 50 Withdrawals, borrowing, and loan repayments. Group All Zero 1–10% 11–20% 34.9% 21–30% 8.6% 31–40%8.8% 41–50% 7.9% 51–60% 2.5% 61–70% 71–80% 17.3% 81–90% 14.9%91–100% 2.8 contract. c and trends, as well as critical analyses of employee benefit policies and proposals. EBRI >$80,000–$100,000 14% 12% 12% 11% 11% 2010 14% 12% 11% 12% 11% tenure and closed- another end funds, was account $1 28 5,45 p balan exchange- ercent 7, com ces hav p of ar te raded fu red epcent lan with ly assets nds ( $ hire 136, d Egreater than $100,000 at betw TFs) 761 partici , een and unit i for p ants parti $250 Figure 6 c in ,001 in ptvestme ants heir an in 2d 0 nt y th s $1,2 ear-end wer trus eir 50,0 40s e ts in (UITs). 2012 0 vest with 0 (Fig ed mor ICI ur in e etar s eeks 3 than )g . et to -date 20 enco years funds, urage adhere of tco enur mpared e. nce w toi high th because the Plans With Company Stock introduction Activity Our some in plans 1998.” of 401(k) may Investmen hav plan e offered features. t Company a pla However, n loan, Institute such but no P DeC rspect particip plan arran ive ant 9, had ge no. ments taken 5 (Jgenerall anuary), out a lo y an. an did d It not EBRI is likely permit Issue that employee Brief, this omission no. 218 is PLA Congressional NS W All ITH C 30O 0% M Budget PANY ST OO ffic CK e. 2013. The 2013 Long-Term Projections for Social Security: Additional Information 8% 64,619 24,019,828 $1,535,552,420,774 Figure 11, Age Composition 20s of Selected 40 25.7% 1(k) Account Balance Cate 10.6% gories ............................................................. 63.7% 15 acco balanc Participa unt balanc ed n$50, fu ts’ nds. al 000 es) locations This . Fidelity Investments 200 sectio to co n mpany focuses Loan as stock first a per 8 on re reported maine centage the investing d of tithat n he r liemai noverall e pattern w ning 401( ith only previou k) of account bal 6.6 401(k) spercent years. plan anceof Thi participants participants rty-six perc wit in ent their h (o respect r recordkeepi 8.7 millio to equity n) ng of the 11% The partici 0% ww 20 p 12 . ants w.dol. 200 401(k) EBR 2. wi gov/ebsa/P Ith “Ca /ICI Pla account n ndatab s 40 With 1(k) DF/2 a bse a Compa Accumulation l acovers 00 nces 8pe nof y nsionpla 4 Stock, T6 less arget pe s t rGe-dat h cent by an nbulletin. nerate Part $10, of e the icipant 00 Si pdf gnificant 0 universe Non-t h a Age d arget loa ........................................................................... Incom n of -dat s 401(k outste e a for )ndin plan Future C g. om parti pany Retirees?” cipants, more Investment thCom an 10 binat Company percion ent of .... 37 of At year- 20s end Sour Age Group ce: >2 $100, 012, 48. Tabul 4% 000 at eiq ons f uity r1. om fu 2% EBR nds I/IC w I14% Par e 1.re 1% ti c3 ipant >0–50 percent 9 p 10% -D eircent 1. rect 2% ed R 10% of etirt em h 0. e ent 8% assets Pl 9% an Datin 0. a C 9% >50–90 percent the 9% ollect E ion Pr BRI/ICI 1. 11% oj 6% ect. 4010% 10. (k 9% ) database, 9%0. >90 percent 9% th 9% e same 0.9%9% shar42. e as 2%at 20 22.2% Notes is a monthly periodical providing current information on a variety of employee benefit 20s 25.6% 40.5% 8.0% 5.8% 1.9% 12.4% Balanced The Typical 100% fund, 401(k target ) -dat Plan e Participant fund, and a Av non ........................................................................................... erage-target-date Median balanced fund u $7,495 se varied somewhat by age group .......................... among 6 401(k) Participants Represent a Range of Job Tenures 20s 51.40 8% 40 perc 24. ent 0%at 6. year-en 1% 52. d 2011. 5% 43.7% 8.8% 5.0% 5.8% 5.4% 1.4% 17% 29.5% 9.8% small, contributions ethical (Februa as standar a U.S. ry). and Government ds, Av often promote ailabl were e at Accountability public designed www.ici.org/pdf understand to Office 1997 found be supplemental ing, /per09 and -0 otherwise 5.pto d that more tha f other anad d ww vance employer w.etb n h 95 percent e ri.interests o plan rg/s. pdf Parti /b of $7,346 of rie cfunds, ipants’ acco 401(k) fspdf/0 their plans 200ib. shareholders, untt balances that h pd at f offer loans directors, had at The (Octobe change 1998 Of r). in w any Wa h1999 ic 30s h: shington, in tdivi arget 2 dual 000 -dat DC: e partic fu 2nds 001 Congressional ipant are 2002 an ’s 36.3% account option 20 Budget 03 balan 2004 O ce ffic 46, over e 20 736 . 05 Available $7,292 time 10.1% 200 is 6 inf atluenc 200 16, 7388, ed 200 930 by8 the200 magn 53.6% 9 $1, itude 2010 016,959, of 2011 these 496,36. 537 1 thr 2012 ee 350% Sour 20s ce: Tabulations from EBRI/ICI Participant-Directed R 14.8% etirement Plan Data Collection Project. 10.0% 75.2% 14 Minor investment options are not shown; therefore, row percentages will not add to 100 percent. Percentages are dollar-weighted averages. system 401(k) pa made rticip ex ants changes in the durin 2012 g September, EBRI/ICI 4October, 01(k) data and base November were in 2008, a time of stock market plans that $7,191 offered company volatility. stock as Furthermor an investm e, ent Choi funds. 30s 30s The ass 54. et 5% Com allocat pany i2. on 7% of participan 2. topics. 2% 36.7% funds ts EBRIef without * 2.as 1% 24.9% is a week equity 1.4% balanc ly fun rou d ed s 1. ndup of EBRI r 5.4% fis 4% unds explored 1.7% next, 8.7% essearch toc beca k1. as 3% and use 3.5% insights, as well 40 1.1 4% (k) cpa omrticipants pany 1.7% $7,153 as updates on stock holdi and/ 29. 13.9% 6% or ng no plans, and 1638.2 44 percent of 401(k) plan assets. The EBRI/ICI project is unique because it includes data provided by a wide year-en Other stable- Institute d 2011 Pv . ealue fu rspective Balancnds inc ed 8, fun no. ld ude synthetic s, 3wh , and ich EBRI inveGICs, s t Issue in which consist both Brief, equ no. ities 2of 51 ana d (November portfolio fixed-income of ). fixed-in Availa secuc ble rit ome ies, at securities incr www.ici.org eased “wrapped” in /share, pdf/per with 08-0a 3.pdf publications 1.8% Figure The 30s distri 56. 12, 0% b butio Tenure 31. n 7% of Com account 6.p 6% osition balances 44.4% of Select un 38. der ed 8% s401(k cores )the 5. Acco 6% eff unt ects Bala 5.of 3%nce age 8. Cat an 2% d egories tenure 5.2% ................................................... on 2. ac 3% count balanc $7,027 2011 es. Form In a 5500 give 24.n 6% ag ..... e 8.16 1% recently hire No30s te: T d partici he tenure v pPercentage aants—r riable is gener ecently ally year of active 401(k) s w hire orking at c d 21.2% partici urrent 19 em ppl ants oyplan parti er, and thus in their maycipants, ov 2er 0ss tate y w 11.3% e ear rby years e s of more participati likely on i of tenure, n the t401( o be k) pl an. hi 2012 ghly 67.5% concentrated in such Relationship of EBRI/ICI 401(k) Database Plans to the Universe of All 401(k) Plans Figure 43, Percentage 40s 28.7 of 401(k) Plans 0.Offering 6%38.1% Loans, $6,946by Plan Size, 9.5% 2012 ................................................................ 52.4% 60s 29.1 38 and advisers. A target Members -date fund t $6,856 of ypiIC calI ly r manage ebalances itotal ts portassets folio to becom of $16.1 e less ftrilli ocused on gr on and ser owth and m ve more than 9 ore focused on i 0 mi ncom llion e as ishareholders t approaches and (see Burham, predate About least 40s one Cthe hanges plan 40participant 1(k) in $6,815 Account plan are witn Balances ho t an included outstanding ............................................................................................. 38.2% in this $6,839 loan. analysis, 19.3% which focuses 4.5% on 401(k) 10.4% balance 4.4% amounts. $6,846 ......................... 16.7% 10 factors Sww ourcrelativ e w.cbo.gov :30 Tabulae tions to f/th ro sm ites e Estarti B/ Rde I/ICfault I n Pg artacco ic/fi ipan les surve t-unt D/cbo irectba y es, studi d file lance. Res ti/ rem ates, e tachments/44 nt litig For Plan ation D ex ataample, $6,821 C , leg ollec972 tiisl on ation and r a P-Socia rcontr oject. ibution lSec e 27. gul 2urity.pdf a tion affe of a 26.gi 9 ven cting e dom llar ploam yeeount benefproduc it plans, while es a 40s 90% 60.2% 3.6% 2.6% 2.3% 1.P 6% ercentage 1.5% of 1.6% Percentage 1.2% of 1.3% 1.5% 22.6% . 201 $6,7 1.17 Private stock and/ Peor nsion 18% Plan Bulletin, Abstract of 2009 Form 5500 Annual Reports (Version 1.0). Washington, et equity option al. 2001 fu (Figu nds found re 40s may 22that ). hold Amo 401(k) en qg uities these participants in partici the only for p rarely m a 22.7% equit n of ts, com y made 76 pe pany cha rcen n stock as t ges hel only after dor equi 20 thro the tper y 10.7% ugh 26. c inent 5itial bala or point only less nceof d equit of funds. en th yro eir llment. ac Finally, count 66.6% (For target the balances household -dat overa e funds ll inin surv ,co v * e and/ mpany stment ey or Average Loan Balances $6,659 variety 40s and 54. of 4% ww pla w.e n 33. recordk b 8% ri.org/ 8. epdf 2% eper /bs rie 39. $6,644 and, fs 6% pdf th /1 erefo 10 34.2ib. 1% re, pd represents f 5.5% the 6.activity 5% 10. of 6% partici 6.4% pants 3.in 3% 401(k) plans of varyin22. g sizes— 6% 8.9% accountin guarantee (typi Note: Thg e anal for y s c22 ially by an ins s in cp lude ercent s 401(k of ) p u lthe an rance company par assets ticipants w in ith the two or a bank) to pr or database fewer years at of teyear- n ovide ure inen the benefit d ye2 ar 012. indipayments ca te Des d and pite in a according to these plan ofrife ng shi cofm ts pany the in sshares tplan ock as at of book bala val nced ue. 0 passes t 250%he target date of the fund, which is usually included in the fund’s name. group, ? shorter 401(k) p tenur 50s articip e tends ants conti to meannued to seek that 38.7% a higher perce divernstage ification of of partic 9.8% their inv ipants willestment have accou s. 51.5% T nhe t bala shar nces e ofof 4 0 less 1(k) than funds. Investment 50s For 300% exa Com mpany ple, 57 In perc stitut ent e. Quart of rec30.3% erly ently S u hire ppld ementa 16.8% particiry pants Data. in 5.1% Washin their 20gton, s held 13.8% DC: mor Inves e th 21% 6.0% an tment 90 21% perc Com en 21% pa t n of y 21% t Institute. heir acco 19.8% unt $40,000 Median Tenure: 8 Years Investm50s ent Options Offered by Plan EBRI’s Blog 22.4% supplements our regular publications plans 10.1% participant , off s ering commentar P67.5% ercentage y o of as n questions sets Bogdan, 50s and Schrass 62.9% 2013). 3.8% 2.5% 2.3% 1.6% 1.5% 1.5% 1.2% 1.3% 1.5% 19.9% Figure larger an ingro 13, vecstm w 401(k) ent th op rate tionAccount .when added Balances to a Ismall ncrea ese r account. With Participant On the other Age and hand, Tenur investment e ................................................... returns of a given percentage ..... 16 The 2012 EBRIbalanc /ICI 40 ed 1(k funds ) Pl d an as tabase is a representative Psar ati mple cipants of the estimated universe A of ss ets 401(k) plans. At year-end DC: U.S. Department of Labor, 18.3 Employee investment Bene 18.4 fits Secur inves ity tment Administration inves (Dec tment ember). Availa non-target ble -dat at e balanced funds results Year-End Figure stock, 50s 53. includin from 44, 2% G 2012 IPer Clate s ar 30. centage g e guar Snapshot 1% 5 2012/early 4 perc ant9. eed i of 8% ent Eligible n ovf2 e who st 401(k) 013 38. ment 2% reflecting hel cont 401(k Partic dr ano ct 33. ) s.n Plan 0% ipants’ ehouseholds’ (FiParticipa gure Account 5. 32% 3). se n tOn ntim s Balances With the 6. ent 9% 401(k) other toward ............................................................... 13. hand, 3% Plan and confidenc Loans, 8. 7 6% perc eby 4. ne 2% t Plan ha in d 401(k) more Size, plans, see 2012 than 80 ....................... perc Holden 19. en ........... 4% t of and t10. heir 10 3 0% 8 in equitie 20 s across all 401(k) plan participants is presented. from 43 28 60s very <10 large 0 partic corpor ipants ations to small 100 to 25.5% busi 500 nesses—with 15.8% a 50 variety 1 to 1,00 5.3% of 0investment 18.1% 1,0 optio 01 to 5, ns. 8.1% 000 16.3 >5,000 20.4% and equity fu 60s nds, 60s most 401(k) participants 22.3% 36.5% appeared not to have ma 9.7% 9.2% de dramatic shifts in th 53.8% eir 68.5% asset allocations 50s in 15.8 16.0 $10, Among 000. partici accounts 80Fo %r e pxants ample, invwith ested 89 o u ipe n tscom rcent tanding pan rece of y partici 4ived from s 0t1 ock (k) ped ants loans news ged in at down reporters th th eir e e 20s to nd 7 , p with of 29% per olic 20 cy en t12 m wt akers o , at th or e year ,fe ave an wer d others -e 15. rag 1nd years e 20 un . EBRI 12. p of aid tThis e nur b Fundamentals of Employee ala share e nha ced w has account as $7 fall ,1 e53 n bal by , a n more ces of balanc The Social Security replaces a m percenta es d in balanced ge of 401(k) funds, participants compare uch higher d with wit frac htion 401(k) 49 of perce pre-retir loans nt o outs f ement rec tanding ent earning hires acro is nss for the all lowe ir participa 40r-income s, ann d ts 4both 8workers. perc with ent For and of rec example, without ent hires 401(k) the in first- Copelan 60s Equit d, yC , rai bond, 65. g. 7% 2011. money,“Tar 3. and/ 5%get or balanc Dat 2.e 2% ed Fun funds d Use 2.1%in 401(k 1.5% ) Plans 65.3% 1. an 4% d the Persistence 1.4% 36.1% 1. of 0%Their 1. Use, 1% 200 30. 7–2 1.6% 3% 009.” 18. EBRI 9% c 15 Age Group Because few plans fall into this category, these percentages may be heav 19% ily influenced by a few outliers. >20 Years produc 201 60s2, 47. al e l 2% la 401 rger S All (k) our 24. dollar ce 7% plans : Tabul 11. inc at hions e 1% reas ld fra oes m 33. total E(or 3% BRI/ o Idec CfI $3.5 P28. ar reas tic7% 19.7% ip trillion ant es) -Dwhe irec in ted 4. n asse 6% Rcom etirem ts, p ent oun and 14. Plan 3% ded t 19% D h at e on a 19. da 10.5% C ol a 8% tabase lec larger tion 6. Pr4% o rasset je ecpres t. 5.ents ba 2%se. abo Asset ut 69.8% 4allocation 4 percent also of 19. tha 3% t 11.3% Plans With Company Stock and GICs, 32 10.3 and/or Other Stable-Value Funds Some ww . w.dol. recordkeepers 2003.gov/ebsa/P “401(k) supplyi Pla DF/2 n Asset 10. ng 00 9 data 9pe Allocatio nsionpla were unable n, nbulletin. Account to provide pdf Balances, compan lete d Lo asset an Activity allocation in detail 2002.” on Invest certain ment pooled Com asset pany classes Bass account 2013.) balan ces All invested in compa a ny stock. 33.5% 10.0% 56.5% 6 18% 18% 18% Benefit Programs 18% offers a straightforward, b 18% 18% asic exp 18% 18% lanation of employee benefit programs in Figure 14, . 250% 201 401(k) 3. “The Account U.S. R et Balances irement Less Market, Than Thir $10, d >30 Years Q 000, uarter by 2013” Particip (Dec ant ember Age an ). d Avail Tenu are ble ........................................... at 7.8 17 201 Factors 2. That Affect 401(k) Participants’ Account Balances ................................................................................... 10 All 10 Of59. wh0% ich: target 3.-dat 1% e funds 2.2% are an opt 2.1% ion 1.5% 47. 7.00% 1.4% 1.6% 27.1% 1.1% 6.5 1.3% 22. 1.6% 4% 25.3% Figure less compare This 20s than upd 45, than N d a $1 o te twit 401(k) e:N 0, “h e ot F h 000 x a unds” e tends :lf $ P 7 since er ,02 Loan i in 87. cn en cl 2 previous 1% 7 ude m ta012, ges 19 in Balan 99. t u may h tual ce o ces f not Rec mpared year findings unds, add as e-en bank col ntl to a y 100 dPe from w hire 20 59. ith p rce le er ct 11 4% d c55 ithe v en n e t 401 tage data t rperc bec ust project (k s au base ,of l) ent se ifepartic i40 of nfo sur o r(Figure 1(k) ou fr ance separ ndi partici 1996 ipants 12. ng Accou .3% 48 through p c at ants ). o e account nntribut t Th Ba in e 2011. l a their me s, nces e and any d dian 5.to 9For 2for 0t 3. s his loan pool year-end 3% wit Parti trend: ed i hbala cipants n bet vest nce w 2011 th mee ent ey outstandin n pr With ten res oduct five u d lts, 401(k pr ed and im see to ar 12. g 10 il) ybe was 1% Plan Holden years less $3 Loa ,858 likely of et ns, al. at their year plan loan replaceme 16 60s acces in 2012 s nt was rate (Figu similar (scheduled re 38in ). earlier Concentr Social years. Security ated For tarexample, benefits get-dateas in fund a 2011, percentage use this range m 2011 easure o df from average was 18 44 c per are percent; in 201 cent er earnings) of recent fo 0, 18 percent; in hires r retired in th worke eir 2r0 s s in All Issue 54.2% Brie 30. f, 1% no. 36 7.1 2% (Aug41. ust). 3%Availabl 4.9 35.6% e at ww5. w.ebr 7% 5.5 i.org 6. /pdf 3% /briefs 10. 5.2 9% pdf/E 6.BRI_IB 1% 3. _0 2% 8-2011_No361_TDFs.p 24. df 1% 9.3% 20s 401(k) Account Balances Increase With Participant Age and Tenure 4.1 4.3 27.9% 23.5% 4.3 18.5% 4.3% 1.4% 6.0% 4.2 13.5% 4.6 17% influences investment Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. returns and changes in assets. For example, stocks (as measured by the S&P 500 total return total. The 70% 20da 0%tabase also covers 46 percent of the universe of active 401(k) plan participants and more than 10 Asse Institute t AllocatP ion t erspective o Equity 9, Fno. unds 5, the priv and EBRI ate and Issue public s Brief, eno. ctors 2.61 The (Se EBRI Data 0–2 Years ptember). book on Emplo Available at ww yee Benefits w.ici.org/is a pdf/per statistic 09-al for one or more of their clients. The final EBRI/ICI 2.4 401(k) database includes only plans for which 2.1 at least 90 percent of all plan invested in the security indicated. Fi Figure 42 gure 50 Plan 30s Ag se $30, Age Group 000 16% 84.7% >0–50 percen 55.6% t 7.4% >50–90 percent 4.4% >90 percent 17.3% www.ici.org/in a fo/ret16% _13_q3_ Perc data.xls entage 16% of Account 16% Balance Invested in Non-Target-Date Balanced Funds 30s Equity, bond, money, and/or balanc >20–30 Years ed 39.4% d funds, 14.7% 11.0% 6.1% 16% 1.9% 7.9% 14.3% tenure year-en (Fi d to by 2012, ghold ure Pla n 14 em compared S). ize, plo O ly der 2er 012 stock. wo wi ............................................................................................................................... th rkers $3,785 display in ta h e similar year-e patter nd 2011 n. Fo data r exampl base. e, Nev 63 erthe percent less, of the pa ratio rticipants of the in loan their outstan 60s with d.... ing 39 2012. holdin the 1940–1949 2009, 19 percent; in 2008, 16 33 Results g more fto birth cohort (individuals age han r A target-date fund typically rebalances its portfolio to become less focused on growth and more focused on income as it earlier 90 perc years en percent; in 20 t are of available their acco d 63 to 72 in 2 in 07, 16 percent; and in 20 unt earlier balanc issues es 012) de i n of targ ICI et-date creased Research 06, 15 percent. fas unds Perspective income to 39 increased. per (www. cent ici of The .org/re rec me entl dian search/perspective y hire replaceme d partici np t ants rate ) Definition of 401(k) Acco17 unt Balance .......................................................................................... 43% ....................... 10 PL Figure ANS W15, ITH 0 COM 401(k) PAN Account Y STOCK A Balances ND GICs Great AND/ er OR OT Than HE $100, R ST000, ABLE by -VA Partici LUE Fp UNDS ant Age and Tenure ..................................... 17 . 201 2. Private Pension Plan referen Bulleti ce work o n, Abstract n emplo of y 201 ee ben 0 Form efit pr55 ogr00 ams and Annual work force-related issues. Reports (Version 1.0). Washington, For the age 20s distribution 15% of 401(k) plan pa11.6% rticipants and assets at year-e 10.2% nd 2012, see Figure >10–20 5. Year 78.2% s inde percent x) incr of e all ased 401(k) b 16.0 plans. percen t The durin dis gt ri 2buti 012, on while of as bo sends ts, partici (as mp eants asure , a dnd by plans the Barcla in the ys data Capital 40s 15% base U.S. for 20 Aggr 12egat is simila e Bond r to the Asset Allocation of Recently Hired Participants 40s 200% 80. Asset A 7% llocation Distribution of Recently 49.6% 5% 6. Hired 401(k) Participant A 4% 6.0% ccount Balance 18.7% Percentage of assets The 05.p year- 40s could den f an d be plans d 201 identified. www.e 2 EBRI/ICI bri.org 40 /pdf/ 1(kb)ri data efsp 41.4% b df a/0 se 903i shows 9.4% b.pdtha f t, on av 8.9% erage, 39 percent 6.9% of partic 2.1% ipant ac 10.8% count balanc 15.3% es were Loans From 401(k) Plans Tended to Be Small Asset Allocation and Participant Age Group and GICsZ approaches and passes the target date of the fund, which is usually included in the fund’s name. ero and/or ot 1–10% her stable 11–20% value funds 21–30% 31–40% 32.6% 41–50% 51–60%27.6% 61–70% 71–80% 24. 81–90% 7% 91–100% -1.6 -1.5 Deloitte 60 Consu % lting LLP, International 14% 14% Found 14% ation of EmFigure ployee B 3enefit Plans, and the International Society of Certified EBRI/ICI 401(k) Database 30s 14% 16.8% 10.4% 14% 72.7% 14% two to and 20s the EBRI or 56. remain fe 2% wer Issue years 24. ing Brief 8% acco of (ww 8. unt te 2% nur w.eb ba elance ri.org/publi 49. had 4%accou decr31. eas cati nt 0% e balanc ons/ib d slightly, ). es 18. of 4% fro less m than 14 2. 3% percent $10, 3. 08% 00. at year-en In2. contr 5% d ast, 2011 1.0% less to -4.than 6. 213 7% p e on rce e-fi 3. nt 1% fth in of 2012 t22. hose ( 0% Fig in u r 10. es9% in for th the eir lowest 60s. In household addition, lifetime at year-en earnin d 2012, gs quintile 54 percent was 77 opercent; f the accou for n the t balanc middl 18 e es quintile, of recently the median hired participants Social Security in their 20s b Figure 26 50s 50s 76.4%to Company a Stock in 401(k) Plans W 34.1% 44.0% 7.4% ith Company 4.6%8.4% Stock, by 8.7% 7.7% Participant A 2.8% ge 18.0%20.0% 15.3% 100 DC: U.S. Department of Labor, Employee Benefits Secur ity Administration (November). Available at Index) Figure Size 46, incr of -10401(k Few eased The analysis includes the 2.5 million recently hired participants (those with two or fewer years of tenure) holding balanced f 401(k) ) Account 4.2 perc Participants ent Balances (Figures Ha ............................................................................................... d 7 O an utstanding d 8). 401(k) Loans; Loans Tended to Be Small, 1996–2012 unds in ........................ 50s ................ 11 39 universe of plans as reported by Per the cen U.S. tage Departm of eligibl ee nt po 13% ar f tLabor icipan 13%(Figure ts, b 13% y p ar 4)t.ici pant age, 2012 13% 44 allocated MacDonal 20s to d, Of 40s e Bq o 80. w uity nnie h8% ich: fun -Jean target ds 2. n(Fi -dat 0% e, g and e ure funds Kevi 2 2. 10% ), are n wh D. an ic 18.4% Moore. opt h 1.is 2% ion one 2011. way 0.7% t“Moving o 23. hold 7% 0. 17% e 7% q Beyo uiti 10.3% end s. 1. However, th 0% e Limit 19.0% a 0. in ti 5% ons dividual of Trad 0. asset 5% 71.2% itional a16. llocations 0.8% R 4% eplaceme vari 10.3% n ed t Figure 16, Median 401(k) Account Balance Among Longer-Tenured Participants, by Age and Salary, 2012 ................. 20 26 ? Participants’ 401(k) loan activity remained steady, although lo an balances increased slightly in Comp 34 30s In plan ye aring 56.3% snap ar 33. 2011 (latest data available), only 1.8 percent 3% shots 8. of 9% newly 42.hi 3% red 429. 01( 9% k) plan10 partic 12. %4%ipants’ of 2. the 6% asset $3.1 5. al trillion 9% locations 3. in 3% 401(k) provi 1.2% d plan es fu assets 5. rther 9% were insight 4. 8% participant into 20. recen 6% loans. t 9. 0% Employee Benefit Specialists. 401(k) 2013. Pl Annua an Characteri l 401(k) Benc stih cs, marking by PlSurve an Assets, y 2012 Edition 2012 . New York, NY: Deloitte 46 their an 60s 60s d 49). with 15 In 0% more addition, than as 20i nyears previous of 27.4% teyea nurrs, e ha variation d 6.9% account ar ound balances this 8.1% o aver f less 12% age than co 9.1% 12% rrespon $10,000. ds 3.1% wit h age 27.1% (the older the 14.3% was As 16 replacement 60s in investe previous d rai n te years, 2012, the 1.9 million recently hired participants holding target-date funds in 2012; and the 0.6 million recently hired partici ba was 69. lance 7% 45 the d percent; dat funds, abase compa and Contact EBRI for for year r 38. e Per th d3% e -en cw entage highest ith d 51 2012 Publications, (2 of p quinti re ec rc sho ently ent le w s it hir 5. in that 0% was ed 202) 659-0670; 0 par 1 32 partici 1tic , percent. i4 pants 4 p pants’ e in rcent plans See fax publication asset 8. in 3% Congressional 2010, allocation 42 orders to perce vari Budget nt pants ed in (20 considerably Office 2 18. 009, 2) 775-6312. 1% 2013. 36 perc with ent See endnote 50s11 for additional detail Asseon t A target-date lloc 18.2% ationfunds. Distr ibution o 9.9% f 401(k) Account 71.8% 150% a ww . w.dol. 200 $20, 4a 000 gov/ebsa/P . “401(k) Pla DF/2 n Asset 010pe Allocatio nsionplann , bulletin. Accountpdf Bal ances, and Loan Activity in 2003.” Investment Company For 30s401(k) 50% asset 81. 1% figures, 3.5% see Investment C 2.9% o2. mpany Institu 0% 1.1%te 2013. 0.8% 0.8% 0.5% 0.4% 0.4% 6.4% 2011 Form 401(k) 5500 Loan as a 7 Equity, bond, money, and/ S&P 50 or 0balanced funds, widely Rates.” across Sopartici ciety of pants. Actuaries For exam (September). ple, about Available 51 percent at of www.soa.org/research/resear participants held a,b no equity >5–10 ch fuY nds, -projects earswhile /pe 15 nsion/resear percent of ch- 40s Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. Relationship 53.-2 8% 0 39. holding non-target-date balanced funds in 2012. o8% f Age 11. an 0% d Tenure 31.7% to Account 21.6% Balances 10.1% ............................................................................ 2.8% 7.2% 5.0% 1.3% 7.8% 7.3% 60s.............. 17.3% 8.11 8% 33 T2012. otal Pl 60s an At Asyear sets -end 2012, 21T o perc tal Pl ent 17.6% ansof all To 401 tal Par (k) ticpa ipants rticipants 8.9% who Total w As ere se el ts*igible for Av lo eans r73.5% age had Account loan Bal s anc outstandin e g investment F See iThe gu AllU.S. reEBRI/ICI 47Depar , 40 al1( lo t401(k) ment cations. k) Loan 80.of 1databa % Labor, Bala Activity nced se Employee environment Varied fu Subscriptions to nds, Acro 49. Be which nefits 6% ss is certified 401(k) inSecurity clu EBRI dePlan to Issue Bri lifAdministration es be Partici tyle 7. fully 1% ean fs compliant pd ants are included tar ..................................................................... g 2013b. et-date with as part of the 5. fu9% nds ISO- , have EBRI 27002 Information Security Audit membership, or as part of increased in 17. popularit 5% y a 40 Sources a Consulting nd Types of D LLP. Available ata at www.deloitte. offering com com/assets/Dcom- pany stock as an inv estment option, 2012 Figure partici age. p Youn 17, ant, Rat ge the r io -20. partic lower of 5 401(k ipants the ) average), A P t ccount er ende centage of d Balanc to te R nur favor emai e e ni (th ng to equity e S alary, high fuer nby dts h Participant and e ten bala ure nced of Age A th ge G e funds, and part roupicipa Tenure while nt, ol ........................................... th der e lo partici wer the pant av serage), were more acco li unt .... kely 20 in a 80 2008, 28 percent in 2007, 24 percent in 2006, 19 percent in 2005, and about 7 percent among that age group in 40s 80. c 7% 4.0% B 3. a 2% lance t 2.o 5% Equit1. y3% Funds, by 0.9% Par0. tic 8% ipant0. A 5% ge 0.4% 0.4% 5.2% Orders/ and com -22.1pany stock b 0.8% 14.5% 15.0% Definition of 401(k) Account Balance The Minor investment options are not shown; therefore, row percentages will not add to 100 percent. Percentages are dollar-weighted Institute Typical 401(k) Plan All Perspective 10, Participant no. 2, and EBRI 15.8%Issue Brief, no. 272 (A 10.2% ugust). Available averages. at www.ici.or 74.0%g/pdf/per10-02.pdf 50s 49.3% 39. Row percentages may not add to 100 percent because of rounding. 4% 13.8% 25. 3% 16.7% 8.6% 3.3% 9.8% 5.3% 1.5% 11.8% 12.7% 14.5% 8.1% partici 29 35 Tenure moving- p (years $0–$250,000 ants )h be eyon ld more d.aspx thRussell an 80 2000 perc Indent ex10,875 of their balances 75,295 in equity funds $1,054,876,218 (Figures 26 and 27). Furth $14,010 ermore, the 401(k) Ac$199 annual sub count Balance scription 20s to EBRI Not 40ses and EBRI Issue 60s Brie Afs ll . Change of Address: EBRI, b Percentage of Account Balance 45Invested in Company Stock In standard. 17 a give against 40 n More % ageover, grou th39 eirp, EBRI 401(k longer has ) account obtained tenure as, tea unchan nds legal to opinion mean ged from that that year a the hi-e gh methodolo ner d 20 perce 11, a,b gy n20 tage used 10, of ameets nd partic 2009, the privacy sta ipants but will up from havnedards of the 18 accou percent nt bala Gramm- atnces among For an a The ratio 401(k nof aly )401(k) sis tracking target-date fund participants. account Recently balance (at hired thuse and t e partic current ipants hemployer) e pe in rsistence 2012 to te salary of nde their d alone to use be is from mor not e200 an likely 7 indicator through to hold of 2009 bal preanced p , aredness see Copeland funds for 2011. A target-date fund typically rebalances its portfolio to become less focused on growth and more focused on income as it approac Relationship UnitedStat -3 100% 0 es/L between ocal%2 Acco 0Assets/Documents unt Balances and /Consult Salary .............................................................................. ing/us_cons_hc_401ksbecnchmark hes and passes the target date of the fund, ingsurvey2012.pdf.............. 11 balanc 50se (the h 80. igher 8% the 4. acco 2%unt balanc 3.2% e, the 2.7% lower the 1.5% average 1.)1% , and 2012salary 0.9% (the 0.5% higher the 0.4% participant’s 0.4% salary 4.4% , the 199 to Estimates invest 8 (F . igur 201 i n e fix of Of 3a 39). e the w . d-income h Private icnumber h: At target y Pe e ar-end sec -dat nsion of u 401(k) e rities funds Pla 2012, n such plans are B ulleti am an as aong opt n n P d bon er ion Historical active rc e d ent cently fun age of participants ds, h Ta iGICs red par bles 0.7% partic t ian c a iare n pant d d ip ot Gra base s a he ,np ts r d hs 2012 stable in on (2 th a 01 eir 11. -valu combination 1 2% 20s, Data e funds, target Release of -date or data mon Versi fu fre om nds 10. o y n fu 8% U.S. 1. accou nds 0).Department (Figu nted re for 21). Several recordkeepi Note: "Funds ng o "rgan include mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investment product izations provided records on active participants in 401(k) pla 40sns at year-end 2012. These F 60s igure38. 48 0% , 401( 31. k) 6% Loan 14. Bal 3%ance 20.s 3% ........................................................................................................................... 12.3% 8.0% c 2.6% 11.8% 4.9% 1.7% 27.8% 23.3% 10.7% 9.0% 40 45 0–2 and >$250,000–$625,000 www.ebri.87. org/ 5% pdf/b Zrie erofspdf/08,738 80 63 4ib .0% 1.pdf 130, 87% 432 13.4% 74% $3,725,941,208 86% 2.7% 79% $28,566 8.4% 1100 13th St. NW, Suite 878, Washington, DC, 20005-4051, (202) 659-0670; fax number, Figure 18, Ratio of 401(k) Account Balanc e to Salary for Participants in Their >2–5 20s, Year by s Tenure ................................... 21 Age Group 100% Zero 1–10% Barclays C11–20% apital U.S. Agg21–30% regate Bond Inde 31–40% x 41–50% 51–60% 61–70% 71–80% 81–90% 91–100% As perce which is usually included in the fund’s name. This p a cross ntage attern is driven in part sec Age Group of 24% tion, partici or pants snaps hh o by re ot, ldinof g strictions no the e >0–50 percen ent quiity re placed fun population d t s on varie loan dof w amounts. 40 ith 1( age, k) >50–90 percen p lwi an th parti 69 tpercent cipants, of the pa drticipants atab >90 percen ase in in cl t u th deir es 40 20s, 1(k) 46 The database includes 401(k) participants across a wide range of age and tenure groups. At year-end 2012, 51 percent greater year-en than $100, d 20 00 08 0. . Loans For example, outstandin 18 g peamo rcent unt ofed partici to 13 p ants perce in n -33. t th 8of eir the 60s rema with ining five accou to 23% 10 n years t balanc of te, enure on av ha erage, d acc o at unt Leach-Bliley retirement, compare 60s Subscriptions d no wit Acr is it the o h 82. t. primarily invested in the security indicated. rec At 1%e no nt time hires n 3.ly measure that c 7% has in th any e 2.past. nonpub 7% Sia xty-nin lin be use c 2.personal 4% e perc d to 1. information 4% judge retiremen ent of rece 1.0% that ntly 20% is hired t readiness o personally 0. 30s 9%participa 0. identifiable, r5% savings adeq nts in 20 0.4% 12 such uac heas ld y ( 0. a balanc see B 4% Social red ady, Security 4. fu 6% nds, For an analysis $10,000 of target-date fund 1–10% use among defaulted an 2% d non-defaulte 8% d 401(k) 6%plan partic 7% ipants, 22% see Mitchell and Utkus 60 Age Percentage of Account Balance Invested in Equity Funds lower For Ac ll>2–5 example, Was 54. E the quit 1% hin aver y,gton, bond, 36. among age). 0% DC: m 84. oney, Overa 4% 10. partici U.S. 1% and/ ll, De por ants loans 32. pa balanc 3% rtment infrom th ed eir 21. funds of 56. 401(k 7% 20s, Lab 2% , o )th r, plans e Employee 10. avera 6% ten gd e ed 11. aBene 2. llocation to 4% 4%be fits small, 7. Se t 8% ocur equity wit ity 2.h 4% Admin th an 3.e 6% d vas 1. balance istration 3% t majority 10. d (June 1% funof ds ). 4 was 10. Av 01(k 0% ailabl 13. nea ) 1% partici rly e 18. at 7 6% 7 p ants 8.9% in 79 of Labor, perc> ent $625,000–$1,250,000 Bureau of their of Labor balanced St >10–20 Years atistics, fund assets, and 9,452 U.Sor . Department 43 percent 234,160 of of La their bor, acco Employee unt $8,633,289,553 baBenefits lances 21%ov Se erall. curity The Administration incr$36,869 ease in 21% reports; asset as well plan Year-End recor -402012 dke 20s epers Snapshot include of mutual 401(k) (202) 775-6312 fun Partic d cipants’ 11.3% ompanies, 24% Asset ; e-mail: ins Allocation urance subs -37. compa criptions@ebr 0............................................................... 8.8% nies, an i.od rg consulting Membersh firms. ip Information: 79.9% Although the .............. Inquiries EBRI/ICI 14 GICs are guaranteed investment contracts. 20s 30% 77.0% 20% 3.7% 20% 3.2% 20% 2.7% 20% 2.3% 20% 20% 2.7% 20% 1.0% 0.6% 0.5% 0.4% 6.1% Mitchell, Olivia S., and Stephen Utkus. 2012. “Target-Date Funds in 401(k) Retirement Plans.” NBER Working Paper, >2–5 Years percent of 50% participants in th > eir 10% 4–0 20% b s, and 51 percent of participants 2% 6% in their 60s 3% holding no 5%equity funds. The percentage partici Deloitte of Figure pa Allrticipants p49, ants Consu 401(k) who 81. lwer ting 0% are Loan e LLP in youn th Amo an 3.eir 6% g d and unts I 30s nvestment tor V h 2. ose aried 40s, 9% wh w Ac Co o hile ross mpany 2. are 3% 12 new 401(k) percen Into stitut 1.2% Pa th t eir rticipants of e. 2 partici jo011. bs, 0.9% as p Insi .............................................................. an well ts de 0. were as the 9%oStruct lder in the 0. pa ur 5% ir rticipants e 20s of Defin and 0.4% and 1e1d percent C those ontributio 0.4%who wer n e ........... hav /401(k 5. in 9% etheir been ) 41 Sou balanc number, been t rce: Tabu >5–10 es lyear-en atiin on Gr s from EBRI/ICI Parti ex ou 30s p cess rd ansferred to or shared with E 20 79. Z of 12 er 2% $ o , 1dow 00 ci1–1 ,0 pan n 00 t-Di 1 0% rected Reti perc in 20 11 entag 12 –20 remen 45. (Fi % 15.5% e 5% g B 21–3 t Pl point ure RI. an Data Col 0% 15 fr). om 31 How l–40% ecti year- on ever, Proj 7. end 4 1% 1–5 ect. 45 201 0% perc 10.1% 1. 51– e Nevert nt 60% of partic h 61 e 5. less, –70 3% ipa %loan nts 71– in 80% am their ounts 74.4% 81 60 –90 outstan s % with 21. 91–10 4% bet ding 0% ween 20 Figure compare 2012. Burham, and 19, >$1,250,000–$2,500,000 d and wit c Rat om H h ipany o o lden 6of 8 perce s401(k t2012). ock, nt and ) A o A ccount f GI complete rec Cse ntly and/ Balanc 10,023 or analysis hiree d to partici S of alary preparedness pants 424,425 for in Participants 201for 1, 63 retirement pe in $18,074,736,878 rcent Theirwould in 60s, 201 by require 0, Tenure 61 perc estimating ................................. ent in $42,586 200 projected 9, 60 perc balances ent .. i21 n Note: "Funds" include mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investment product regarding EBRI membership and/or contributions to EBRI-ER primarily invested in the security indicated. F should be directed to EBRI all age groups having no loan outstanding at all (Figure 50). allocation as percent co 30s ww nsistent . w.dol. of 200 to assets, 4 73.6% balance plans b gov/ebsa/pdf/h . “App compared in d en the f5.4% u dix: n EB ds RI Additio occurred with istoricaltabl /ICI 4.4% database. anal bout in Fi g 52 e th ures s.pdf e 3.6% perc See target-date for discussion ent the o 2.5% fE as B RI/ICI fund se in ts note among category: 2.2% Partic 2. iparticipants pant-Direct target-date 1.2% ed in 0.7% Retirement fu thnd eir assets 60s. 0.5% Amo P acco lan ng Data unted partici 0.4% Coll for pant ec 40 tion s 5.4% in project has collected data fro >20–30% m 1996 through 2012, the 2% universe o4% f data provi 2% ders may 3% vary from year to year. In a No. 17911 (March). Cambridge, MA: National Bureau of Economic Research. Available at -50 40s 17.3% 9.8% 73.0% Changes Source: Tabul in ati Asset ons from Allocation EBRI/ICI Pa betwee rticipant-D n irYear ected R -End etirem2011 ent Plan an Dd ata Year-End Collection Pr2012 oject. ............................................................. 14 The an >10–20 alysis is based on 20s sampl 68 74. .8% es of 1.2 m 0% 1illio .3% n particip 1a .6 nt% s31. wit8% h tw2 o.0% or fewer ye 2 a.3 rs% of te1. nu7% re 2 in .9% 1998 and 3.6 m 3.3% illion p 9. 3 a.3% 6% rticipants w 3 it.2% h two or few 3e .3 r y % ears34. of t 8 3% e.0% nure in 2012. with of 40t1heir (k) part currient cipants employers holdi ng for noma eqny uity yea fur nds s. Thes also e var ann ieual d wu ith pdat tenur es of e— the partici data pants base with provide five sor naps fewer hotsy e of ars 401 of(k te ) nure 60s (Fi Plan g ot >ur $2,500,000–$6,250,000 her Fe e es: s 5, table upper A S value tudy pane funds Assessing l). The median th President Dallas e 10,998 Mecahgani e (mi cs Salisbur of d-point, th 955,456 e ‘A y at th ll-I ha 1.3% lf n ’ e aFee. a bbove ove W address, ( aa n$43,735,589,431 shing d ha 0–lf t 2 202) 659-0670; on, belo 21. Year 7% DC: sw) of Investment thee-mail: participants Com salisbur $45,775 29.p 8% any in y@ebri.org th Institute, e 2012 and 40 30 years increase 20% of d ten sliu gre htly wit from h their the curr previous ent employer year. had account balances greater than $100,000. The percentage 200 at retirement 8, 53 perc by ent also in 2 consideri 007, 3> 3 30–80% n p g ercent retireme in nt 2002, income and from 29 p Social 4% ercent Security, in 19 8% 98defined (Figure 3% benefit 34). Atplans, year- 6% IRAs, end 2an 012, d other DC plans, 52 percent of a40s 72.5% 5.6% 4.7% 4.0% 2.7% 2.1% 1.3% 0.7% 0.6% 0.4% 5.4% 50s 2002 2003 2004 2005 16.9% 2006 2007 2008 9.3% 2009 2010 2011 73.8% 2012 Nov-13 their Figure P20s, roje 50,c the t Loa 50 fo % r average nYear- s From Enalloca 401(k d 2003 tion ) .” Plans Investment to equity Tended funds Co to mpany Be was Small 31 Inpe ......................................................................... stitut rcent e Pers of assets, pective 30scompared 10, no. 2Awith (Au g 32 ust). perc Ava ent ilabl of assets e at ............... among 41 b percent The analy of the sis includes the 24.0 m account balance illion 401(k assets ) plan partic of recently ipants in hithe red year-end participants 2012 EB R in I/IC th I 401(k eir 20s ) database. at year-end 2011 (non-target-date addition, the sample of plans at any a given provider can change. Thus, aggregate figures in this report generally should Figure 8 >20–30 20,0% 401(k) Plan 67.4% Assets Are Concent 25.8% rated in Equities ..................................................................................... 2.9% 15.1% 23.7% 22 Mi 36 nor inww vestmen w.nb t opti 30s er.org ons are n 53 /pa ot sh .0% pers/ own; th w1 2erefore, row percen .5% 7911 2.6% tages w 3.3% ill not add to 100 percen 3.5% 20s 4.2% t. Percentages are dol 5.0% lar-wei 4.9%ghted averages. 5.1% 4.8% 11.2% >$6,250,000–$12,500,000 $0 >80% 5,583 1,057,330 2% 1% $48,967,415,665 1% 1% $46,312 Of which: target-date funds are an option 0.9% 11.0% 15.9% 18 were Acco more unt balan lik 60s ely ces are net o not to be ifn unpaid lo vested in an bal equity 16.4% ances. funds. Thus, The un perc paid enta loan gebala 8.3% of nces participants are not holding included no in 75.3% any equity of the funds eight ten asse ds to t fall account database Target- b and balan Ne date f is w 45York, ces, unds o years, asset NY: ften are the De allo sa loitte cation, me used as the as Consulting in an 2d 0 1 loan def 1. Beca LLP. aactivity ult investment use Availa acr olde ble oss r at p in wide artic automatic enrollment plans and in pla wwipants w.ici.or cross t sections e g/ nd pdto f/rpt_ hav of 11 pa e la _dc rticipants. rger _401k account _fe Ho e nwever, _stu s’ i balances, nvestment line dy.pd thef asset cross- sups in Asset 50s Allocatio 73.1% 2012nE and BRI/5.4% IParticipant CI 4.5% Age .......................................................................................... 4.0% 2.7% 2.1% 1.3% 0.7% 0.5% ........................ 0.4% 5.2% 14 increases . 201 to 3 52 b. percent Private P for en s partici ion Plan pants Bulle in tin, their Abstract 60s wit o hf more 2011 40 tForm han 30 5500 years Ann of uten al Re ure. ports (Version 1.0). Washington, recently possibly The latest av from hiredprevious ailable data from the U.S. Department of La 401(k) pa employment. rticipants hel For d references target-date to fun such ds, broesearch, wh r are for plan year 2011 (see ile 18 see perc MacDonald ent held non and -target-date Moore U.S. Department 2011 ba an lanced d Holden of Labor, funds, and and 1 c Row percentages may not add to 100 percent because of rounding. >30 c 61.1% So urce: Tabulatio ns20. fro m 5% EB RI/ICI P articipant-Direc6. ted R 0% etirement P lan Data Co llec19. tio n P 3% ro ject. 15.4% balanc partiww cip ed a w.ici.org nfu ts 40s nds in th were /e pi46 d r f/ 60 .2% per 1s. 1 1 per Y0o-3 un 0 c.1% 2_a ent ger ppe at p a year 3 ndi r.t0 ic % x.p i-e pan nd dfts 320 .8% ha 11 d mu and 4c.0 h 2% 012 highe ). 4r .9% The allocati pa5 ttern ons .8%to of ba tar 5lanced .6% get-date funds, 6.0% and partic non 4.9-% target ularly 12.6% -date to target-date A target-date fu not be used 10n% d typi Ato ll cal estimate ly rebal 1996 ances i 1997 time ts portfol trends. 1998 io to become l 1999 Recor 2000 14.9% ess focu ds we 2001 sed on re encry 2002 growthp 2003 an ted d more focu pr 2004 ior sed on to 2005 9.4% inclusion income as i 2006 2007 in t approac the2008 data hes an 2009 base d passes th 75.7% to 2010 ce target date of th onceal 2011 t 2012 he ide e fun nd, wh tity ich Editorial Bo >$12,500,000–$25,000,000 ard: Dallas L. Salisbury, publisher 3,514 ; Stephen Blakely 1,323,214 , editor 24% . Any views expr $61,923,502,991 essed in this publication and those o $46,798 f the authors should All c Sources: Bl oomberg, Barclays Global Investors, Frank Russell Company, and Standar 100% d & Poor's. 100% 100% categories described. 2060s ? The year-end 73.3% 2012 av 5.0% er 4.3% age 401(k) a 3.6% ccount 2.6% balance in t 2.0% he 1.2% database was 8 0.7% .4 p 0.5%ercent hi 0.4%gher than 6.4% (see as sectional salary Plan Spon a incr naleysis sor ases Council is (Figur not wof e ell 2 N America 7 osuited t). e: C o lumn per to 2013). a cen ddr tages essing At may year-end not add th e to 1que 00 2 p 012, ers ction ent bec 71 of aus pe e o trcen h f re o uim ndi t of ng. pact target-date of particimutual pation in fund 40a 1(k) ssets plans were over held tin ime. DC Figure the database A target-date 21, Average are fund more typi Asset callyconc rebal Allocation ances entrated its portfol of am 401(k) ioo to ng becom the Accounts, eol leder ss focused 401(k by on Partic ) grow partici th ipa and p na t m nt Age ore gro focused .................................................... ups. on At incom year-en e as it d approa 2012 ches , 60 and ppasses ercent the ......... of target 24 All 80.1% 49.6% 7.1% 5.9% 17.5% is us percent VanDer Employee ually DC: inchei la uh dU.S. ee Benefits d200 ld in tboth hDe 5. e fun pa For d’Security target-dat rtment s nan ame. analy of Ad sis e Labor, ministration an of d the no a,Employee c n-tar possible 2013b). get-date impact Beneba fits of lan Se automa ccur ed ifun ty tic Admin dincreases s (Fig istration ure in 35participants’ ). (June At ye). ar-en Availabl co d ntribution 20e 11, at 51 rates percent in automatic of7 not be ascribed to the officers, 50s Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. 46.2% 4.1% trustees, 3.m 6% embers, or 4.5% other sponsors of the E 4.7% 5.6% mploye 6.2e% Benefit Research 5.5% 5Institute, the EBRI Educ .1% 3.5% 11.0% ation and Asset Allocation and Investment Options ........................................................................................................... 18 Morningstar. funds. A >The S&P 500 is an index of $25,000,000–$62,500,000 targe 2t013a. -date, Ibbotson or lifec 500 stocks ycle, SBBI fchosen f und 201 2,677 pur 3 or m C sa lues assic rket siz a eYear , liq lon uidity g 2,book: -t 170,215 , and industr erm Market investment y group Rre epr s $104,162,790,999 ults esentation. strategy, for Stocks, using Bonds, a mix of Bills, asset $47,997 and classes Inflation that 192 follow 6– balanced fu nd Of w use hich: vari target ed wi datte h fpart undsicipa arenan t aopt ge ion and lineup of plan investment options. of employers and employees, but were coded so that both 72. coul 3%d be tracked by 68. r2% esearchers over multipl 66.2% e years. Data All a 74.3% 4.9% 4.1% 3.5% 2.5% 20s 2.3% 1.2% 0.7% 0.5% 0.4% 5.6% d date of the fund, which is usually included in the fund’s name. Employee Benefit Research Institute. 2005. “History of 401(k) Plans: An Update.” FACTS from EBRI. Was hington, DC: b the year before, but may not accurately reflect th The analysis includes the 0.4 million recently hired participants (those with two or fewer years of tenure) holding balanced f e experience of typical 4 unds in 1998; the 1.4 million 01(k) participants in GICs are gu Source: Ta aran bulations from teed i 0% nvestmen EBt con RI/IC tracts. I Participant-Directed Retirement Plan Data Collection Project. Relationship bet Cross plans 401(k) Resear (see sections plan 0% ch Fund, Inve 60s assets stment chan or51 their were w ge .1% een Company staffs. in held co Account Balances a 4 Nothin mposition .5% by Institute partici g her 3. e9 ove in is to be co % p20 ant r 13). time s 4in .7% Plan th nstr beca eir n ued as an attem Spon d S use 50s 4.8 a % sor lary the or Co 60s, select 5 uncil p .2% t to aid or whi ion of le America of 5 13 hi .5nder data % perc the adoption ent 2013 provi 4.2% od fr eported ers 401(k) of a 3 an .7% nd y pending le plan an sam increase 2 p a.4 le ssets % of gislat plans in were ion, 10.0% the r e us he gulation, inci ing ld dence by a The Russel 1996 l 2000 Index m 1997 19 easur 98 es the per 1999 20 for00 mance of 2001 the 2,000 sm 2002 20 all03 est U.S. com 2004 pani 2005 es (based on total 2006 2007 mark 20 et capi 08 tal 20 iz09 ation) i 20 nc 10 luded i 20 n11 the R 3420 ussel 12 l 3000 ww . >w.dol. $62,500,000–$125,000,000 2004cgov/ebsa/P . “Contributio DF/2 n Beh 011pe avior nsionpla 1,133 of 401(k nbulletin. ) Plan 1, pdf 935,572 Part icipants Duri$100,056,606,372 ng Bull and Bear Markets.” $51,694 National Tax recently enrollment plans, see Va S hire ource: T d 401 abul(k) ations pa nDer from rticipants E hei and Copela BRI/ICI hel Parti dc itar pant-D g nd 2008; et-dat irected e Rfun eVan tirem dD s, ent P erhei 18 lan percent 2010; an Data Col le he cti d Van on P ld no roj Dn-tar ect. erhei a get n-date d Lucas 20 balanced 10. For a discussion of the funds, and 2 9 Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. Figure a Source: pre N201 od te: et T22, abul “Funds” 2. ermin ati C recently hired participants holding balanced funds in 2006; the 2.0 million recently hired participants holding balanced funds Dist ons hicago ie n from ribution cl d ude r Ee , B allocatio m RIL: I/IC utual 0–2 I of Mornin P afunds, rti 401(k cin pant-D , bank typically gs ) irtar ected Plans, colInc. le Rcti >2–5 e tire v rem Pa e ba trusts, ent rticip lancin Plan lifants, e Da in g ta surance C to oa l>5–10 len sh ctid on if separate Assets, t Prits oject. focus accounts, by fro Investment >10–20 m and growt any pool hOpt ed toi n>20–30 iivestm ons, ncome e2012 nt in 2007; the 2.4 million product over ................................ ti pme. rim>3 arily 0 in At veste year-end d . 24 provided for each participant included date of birth, from which an age group is assigned; date of hire, from which a Note: “F Asset unds” inc Allocatio lude mutuan l fun by d s, Investment bank collective tru Optio sts, lifn e s insu and rance separate accou Age, Salary, n ts, an and d an Pla y poo n Sle ize d in......................................................... vestment product primarily invested in the secu >30 rity indicate ....... d. 18 19 The cross-sectional Index ( a which tracks the 3,000 lar 0–2 analysis for gest U this .S. com pu >2–5 blicatio panies). n found that c >5–10 onsolidating the mu >10–20 ltiple acco >20–30 unts 20 across a majority of the * A 0 target-date or interpretative Employee fund Ben typiru cal e le, or as lfit y rebal Research legal, ances iacco ts portfol In unting, stitute io to actuarial, o becom (Febr e lu er ss ary). other such prof focused Avai on labl grow essional advice. e th at and www.ebri more focused ww .org/pdf/publ w. on ebri. incom org e as iti catio approaches ns/facts/0205fact.a. and passes the target pdf date of Asset Allo a Account catio All n bal of 401(k) Plan ances are 51.2% parti 3.2% cipant account bal Particip 3.0%ants W ances 3.7% ihel tho d i u nt 401(k Equ 3.9% )i pl ty F ans 4 u at the parti .n 7% ds ci 5.3 pants' current % 4.9% employers and 4.9% are 4.0 net % of plan l 1oans. 1.0% 2012. To understand changes in 401(k) participants’ average account balances, it is important to analyze a given of a For an an automatic provi >$125,000,000–$250,000,000 d aly er enrollment sis of the chan vary from in yea 2012. ges in account r to Of year nearly an 700 d 7balances of consistent 00 because plans sur 401(k 2,314,856 vey) ed, partici 47.2 participants ppercent ants $123,684,349,306 join had in or a the leave utomatic EBRI/ICI plans. enrollment 401(k) database in the In ad$53,431 di in tion, 2012, the compared dat a wake of base participants recently hired participants holding balanced funds in 2008; the 1.9 million recently hired participants holding balanced funds in their 20s or 30s (Figure 5, lower panel). in 2009; the 2.0 million A c target-date Source: T fund abulations typical ly fr om rebal the EBRI/ICI ances its portfol 401(k)i o Par to tic becom ipant-D eir lec ess ted focused Retirement on Plan growData Collec th and more tion focused Project.on income as it approaches percent variety Comparin The anal inAssociation the ysi of securi held s i g factors n clrty udes the 1.2 m eboth. c indi ently Pr cated. (e.g., oceedi hiillio red taxes, n n pa par gs, rticisavings, pants tNin icipants w eity- th twmo o Sin or ixth rtgages, few 20 e r Ann 12 years with uof al children) tenure Con similar inf er 2012 enc that age and eimpact i non gro plans Ta uofferi ps xation, replacemen in ng com 1998 pany Novem also stock t rates, as b iler lu an strates i1 nsee vestm 3–15, Brady ent that opti 2003, on. 20 as 10. set ChiFor c allocation ago, analysis IL: 44 to of – ParticipaFn ots’ rmera lyccount the Lehman Br balanc others U es .S. Ag vary greg not ate Bond Index, the Bar only with age clS aa y an sla C d ry api te Ra talnure, U ng .S. Ag e but gregate Bond Index i also with salar s composed of y. Figure securi16 ties covering reports governm the ent account 201 the fund, 2, 15 wh R ic perc eh tirem is usual ent ent savi ly of in ngs cl 4uded 01 hel (k) d i in n the assets plans at previ fund’s in nam the e ous . d em atabase ployers or rol wer >5–10 Years led e iover i n Yve ear n sted s of to IR TA enur in s are not tar e get-date included.funds. Among participants in their 20s, tenure ran <10 Soge ur0 p c e: is T artic a assigned; bulat ipa io ns nts fro ou m Etstanding BRI/IC10 I Par 0 to ticloan ipan 500 t -D bala irectnce; ed Ret fun irem50 d Y ent ears of s 1 to P in lan D th 1,00 Tenure e ata C partici 0ollectp ioant’s n Pro1,0 jec investm t.01 to 5, ent 000 portfolios; and >5, asset 000 values providers to recently hired participants holding balanced funds in 2010; the 2.3 million recently hired participants holding balanced funds the single individual owning them resulted in an overall increase of 5 percent in the in 2011; and the 2.5 million average 401(k) account >$250,000,000 926 13,398,873 $1,021,533,322,152 $76,240 b and passes the target date of the fund, which is usually included in the fund’s name. Figure Participa Distributio 23, and cor sample bnts Average w por ni th ate bonds, m of ofno Equity con Asset equity sistent o rFund tg a Allocation gf eund -backed secur partic Allocations bala ipants. of nces ities, and asset- 401(k) and may As with Participa Account still backed se previous havs, n e cur t exposur by iExposure ties ( EB Partic rebal RIanced m /ICI eipa to to nupdates, t onthl t h Equities Age e ystock by m an ard .................................................. analys kmarke et capi Inves talis it z tment ati through of on)a . T s hO ample e ip ndex's total tions com of p ......................... any rco etur nsi stock n consi stent sts or4 ....... 01(k) 18 25 the U.S. financial Governm crisis ent (over Accouthe ntability four-year Office. period 1997. from “4ye 01ar-end (k) Pensio 2007 n to Playear-end ns: Loan 2011), Provisions see Holden Enhanc et e al. Parti 2013. cipation but May contains with Row percentages 45.9 only T percent he sam m t ah y e p not le in acco of parti add 2011, to unt 100 cipants percent 41 bal .8 ances changes percent because h over of eld roundi in tiin 2010, me ng. t .he 38.4 401(k) percent plans in at 2009, partici 39 p.6 anpercent ts’ current in 2008, employers. 35.6 percent Retirement in 2007, savi ab ngs out held 17 a N o te: 53. C o m . p W 201 onents ashing 3b EBR m . aMorni y tI Issu on, not add e DC: nBrief gstar to the Nis a r tional total Lifecycl egister in the ed in the U. Tax e first Alloc Association. coluation m S. n Patent and T because InNum dexes of ber roundi radem — of U.S. Par ng. artk “Funds” icipant Office. Investors. s in in Icl S Plan ude SN: 0887 m Chicago, utual ? 13 funds, 7X/90 IL bank : 0887 Mornin colle ?cti 13 vgstar, 7X/90 $ . e trusts, Inc. life 50+. insurance (Jun 50 e separate 2013). the company impact Tstoc he of recently hired participants holding balanced funds in 2012. achanges nal k and ysis inc elq ud in uity es Social the funds 24.0 m Security it lle ionded n paon rtict ipo rant etirement be s i n t low he y e er ar pa i-n end tterns, see Gustm 201 2012 2 E th Ban RI/IC in I da 1 t998 aba an and se (Fi . g Steinm ure 39). eier Rece 2008 ntly and hired 2013. 401(k For ) a discussion 8 balanc b es of longer-tenured participants at their current employers’ 401(k) plans. Retirement savings held at previous 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 34 percof ent pr Sour ico e appr f c e: their Teci abulations ation/depr 401(k freci om ) a a EBRI/ICI tion pl ssets us iPar nwere com tice ipant- asinv a per Dirested ec centag ted Retir e of in em the or tar ent gPlan et iginal -dat Data investm eCollec funds; ent. tion Pr a ojm econg t. participants in their 60s, nearly 13 percent attribute Fidelity GI A IC ld n ls vestments. to are tguaranteed hose funds. 20 investm 08. A n “Impact ent accou contracts. n of t 64,619 bala Market nce for Volat each 24,019,828 ility part on Partic icipant ipant is th 1,535,552,420,774 Exchange e sum of th Beh e participant avior.” Buil’s din as $63,929 gsets Futures: in all fIm unds. pact of balance. This Sour b ce: stT atistic abulations should from EBRI/ICI Par be interp ticreted ipant-Dirwith ected Retir caution, ement Plan as Data Collec it may not tion repres Project. ent the total 401(k) assets owned by the Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. balanc accounts, ed and fu any nds, poolwhich ed investm inc ent lude product targ pri et m-dat arily ie nvested fundis. n the Insecuri factty , 80 indi cated. percent The tenure of 40vari 1(k) ablepart is general icipants ly yearwith s work no ing at equity current fem unpl doy er, and Affect partici b Income Row percentages may not add to 100 percent because of rounding. pants Secur (those ity that for Shav ome.” e been Lett in er the Report, same GAO- plan Hsin EHS-98 ce 20-0 57 (Oct ) is e ober). xpecte Was d tohin begton, publishe DC: d Uin .S.20 Gov 14.e rnment Among in percent plans those in at Note: 200 pre T 5, who v he ious and tenur hel e employ 10.5 var d iable bala per ise nced c gener rs ent or ally in fu rolle ynds, 2004. earsd wov r ore Ninety kcently ing er at into curpercent rh ent in ire dividual em d ploy participants of er, plans and ret thus ireme with may in over nt au 201 accounts s tomatic tate 2 ywere ears enroll of (IR par mo ticA re ment ipation s) like are in in ly the not 2012 to 401( hol inc k) a plan. d lude pplied a hi dgh iautomatic n the Sources: T c abul R ati oons from w percen EB tag RI/ICI P es ma arti y c nio pant-Di t add t rected Reti o 100 per rem cent ent P bec lan Data Col ause o f role und ctioin n P g.r oject and U.S. Department of Labor. Asset Allocation to Equity Funds .................................................................................................................... 18 of the variety of measures t partici Available pS ants ou Note: T rceS : T te ource: at a he nde butenur lht aTabul tio dtp://corporat n e var s to fati r obe m io able E ns B f les h R r is om Ia gener /Is t C E can be used t I P likely Be a R ally rtic .I/IC morningstar.c ip year a I P to nt-D a s rti hol w ire c or ic pant-D k te d ing at c do R company evaluate Am eitire re ur o cme ted rm/us/doc ent nR t P em el ti aploy stock rem n Der a ent ericans’ ta , um C and P(Figu o lan lle en thus cD tiots/In a nretirement m r ta P e ay C ro40 o over je ld lc eex t. ) cti sand to ate es/AssetAllocationsSummary.pdf n Pyrreadiness, ear oj te ect. snded of particno ipation see t to in the Brady, hol401( d akBurham, )hi plan. gh conce and nHolden tration of Figure C 24, omponents Average Note: The matenur y Asset not e var add iable Allocation to total is gener because allyof year of 401(k) sroundi working at c ng. Accounts, urrent employ by er, Partic and thus ipa may n t over Salary state year and s of I par nv tice ipation stment in the O 401( ptio k) plan. ns ...................... 26 employers Sour orce: amounts Tabulations rolled from EBRover I/ICI Par to ticip IRAs ant-Di rect are ed not Retireim nent clu Pld an D ed ain ta Ct oh llec e tia on n Pr aloj ysis. ect. To capture as long a savings history as of their 401(k) assets were invested in target-date funds. thus m Market ay overstate Note: “Balanced funds” include mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investmen Volyatili ears ty of parti (December). cipation in the Boston, 401(k) plan. MA: Fidelity Investments. t product primarily Plan balances are constructed as the sum of all participant balances in the plan. Plan size is estimated as the sum of individual. 21The impact of account consolidation varied with the participant’s age and tenure with the current employer. The Source: No te: " TE abulations from quity funds” inc EBR lude m I/IC uI Participant-D tual funds, bank irect coed llecR tie vtirem e trusent Plan D ts, life insur ata anc Ce s ollection eparate ac Project. co unts, and any poo led investment product Note: The median account balance at year-end 2012 was $17,630. allocation Nhad ote: Aver investments age and medianin 401 eith (k) loan a er com mountp s a arn e y calstock culated am or ong ba par latnced icipa 41nts f wunds ith 401( a k)t l oyear-end ans at year-end 2.012 (Figure 28). For example, 87 concentration Accountabi Note: “Funds” of lity inthe clude Office. ir m acco utual Availa u funds, nts in ble bank bala at col w nce lecti ww. vd e trusts, fgao unds .gov/archiv li fe compared insurance e/ separate with 1998 p accounts, /he ast 98 years. 00 and 5.pdf any At pool year ed -en investm d 201 ent 2, product 76 perc primaent rily inve ofste re dcently analysis. enrollment only Furthermore, to new hires, acco while unt balanc 10 percent es are applied net of auto unpaid matic loan enrollme balann ces. t to Beca all nonparticipants. use of all these The factors, Vanguard it is Grou not correct p 2013 invested in a mix of equities and fixed-income securities. 2012. their account balance in company stock (Figures 41 and 42). Note: prim The arily itenure nv © 2013, Emplo estev d ain riable is equitiegenerally s.y In ee B addie t y inefit oears w n, 401 Research Institute (o krking at ) participa current nts ma employ y ho ? ld Educ er, and equitation and Re iesthus throu may gh b ov ala erstate se ncar ed f cun h years of F dsund. All o r co participation mpany ri ghts re sto cin the k ?se se 401(k) plan. rve e Figu d.r e 30 fo r * Assets do not add to the total because of rounding. in the security indicated. the distributio n of 401 (k) acco unt balances to equities. 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 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 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 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 effffffffffffffffffffff • 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 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 December om th2013 • No. 394 2013 • No. 394 2013 • No. 394 2013 • No. 394 2013 • No. 394 2013 • No. 394 2013 • No. 394 2013 • No. 394 2013 • No. 394 2013 • No. 394 2013 • No. 394 2013 • No. 394 2013 • No. 394 2013 • No. 394 2013 • No. 394 2013 • No. 394 2013 • No. 394 2013 • No. 394 2013 • No. 394 2013 • No. 394 2013 • No. 394 2013 • No. 394 e EBRI Education and Re 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 • • • • • • • • • • • • • • • • • • • • • • • • • • • 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. No. 394 394 394 394 394 394 394 394 394 394 394 394 394 394 394 394 394 394 394 394 394 394 394 394 394 394 394 search Fund © 2 013 Em ployee Benefit Research Institute 41 35 28 13 21 39 33 38 26 30 34 25 20 40 32 16 31 29 37 15 24 17 12 36 7 8 9 49 42 11 10 45 50 43 51 46 19 14 47 22 18 48 23 44 4 6 5 2 3 ebri.org Issue Brief • December 2013 • No. 394 27 Figure 33 Asset Allocation Distribution of Participant Account Balance to Company Stock in 401(k) Plans With Company Stock, by Participant Age a,b Percentage of Participants, 2012 Figure 24 Percentage of Account Balance Invested in Company Stock Figure 32 Average Asset Allocation of 401(k) Accounts, by Participant Salary and Investment Options Figure 38 Dec-02 Age Group Zero 1–10% 11–20% 21–30% 31–40% 41–50% 51–60% 61–70% 71–80% 81–90% 91–100% a Asset Allocation Distribution of 401(k) Participant Account Balance to Balanced Funds, by Tenure $3,902 20s 70.2% 7.4% 4.1% 3.2% 2.5% 3.1% 1.5% 0.9% 0.7% 0.5% 5.9% Asset Allocation Distribution of 401(k) Account Balance to Percentage of account balances, 2012 Jun-03 a,b 30s 56.2% 12.9% 8.2% 5.4% 3.6% 3.0% 2.1% 1.3% 1.0% 0.8% 5.5% Percentage of Participants, 2012 Balanced Funds Among Recently Hired Participants, by Participant Age d 40s 51.1% 14.2% 8.9% 6.2% 4.3% 3.3% 2.5% 1.7% 1.2% 0.9% 5.7% GICs /Stable- Equity Target-date Non-Target-date Bond Money Company $4,400 Dec-03 a,b 50s 48.5% 15.8% 9.1% 6.1% Percentage of Account Balance Invested in Balanced Funds 4.3% 3.3% 2.6% 1.7% 1.3% 1.0% 6.2% b c Percentage of Recently Hired Participants, 2012 Figure 29 Salary Funds Funds Balanced Funds Funds Funds Value Funds Stock 60s 51.5% 14.7% 8.0% 5.5% 3.8% 2.9% 2.4% 1.6% 1.3% 1.0% 7.4% Tenure (years) Zero 1–10% 11–20% 21–30% 31–40% 41–50% 51–60% 61–70% 71–80% 81–90% 91–100% Jun-04 d Average Asset Allocation for 401(k) Plan Participants Without Plans Without Company Stock, GICs, or Other Stable-Value Funds All 54.0% 13.5% 8.1% 5.5% 3.8% 3.2% 2.3% 1.5% 1.1% 0.9% 6.1% Percentage of Account Balance Invested in Balanced Funds 0–2 31.4% 2.3% 2.6% 2.3% 1.5% 1.5% 2.5% 1.5% 1.4% 1.1% 52.0% $3,824 Source: Tabulat $20,000–$40,000 ions fro m EB RI/ICI P articipant-Direc 39.5% ted Retirement P lan 23.4% Data Collection P rojec 7.4% t. 15.9% 9.4% Age Group Zero 1–10% 11–20% Equity Fund Balances, by Participant Age or Tenure 21–30% 31–40% 41–50% 51–60% Dec-0461–70% 71–80% 81–90% 91–100% >2–5 36.4% 3.6% 3.3% 3.0% 2.1% 2.1% 2.4% 1.7% 1.7% 1.7% 42.0% a The analysis includes the 8.7 millio n participants in plans with co mpany sto ck at year-end 201 2. >$40,000–$60,000 40.6% 20.1% 8.8% 16.0% 7.3% b 20s >5–10 29.2% 42.5% 1.7% 5.1% 2.3%4.6% 1.6%4.3% 1.2% 2.8% 1.2% 2.5% 2.7% 2.5% 1.4% 1.8% 1.2% 1.8% 1.9% 1.0% 30.2% 56.6% Ro w percentages may no t add up to 100 percent because of rounding. Percentage of account balances, 2012 >$60,000–$80,000 43.3% 19.3% 8.5% 15.8% Jun-05 6.3% $3,659 >10–20 48.8% 7.1% 5.8% 5.2% 3.3% 2.7% 2.6% 1.9% 2.3% 3.1% 17.2% 30s 30.5% 2.3% 2.8% 2.4% 1.6% 1.6% 2.6% 1.7% 1.5% 1.2% 51.8% >$80,000–$100,000 46.6% 16.9% 8.6% b 16.3% 5.2% Target-DateNon-Target-Date Bond M GICs /Stable- Company oney >20–30 54.3% 8.4% 6.0% 5.3% 3.6% 2.9% 2.6% 1.7% 1.5% 1.3% 12.3% 40s 32.8% 2.6% 2.8% 2.7% 1.8% 1.7% 2.4% 1.6% 1.5% 1.1% 49.0% Dec-05 >$100,000 a 49.2% 13.7% 8.1% 17.6% 4.9% c Figure 34 Funds Total >30 60.2% Balanced Funds 8.5% 5.3% Funds 4.6% Funds 3.1% Value Funds 2.3% 2.0% Stock 1.3%Other 1.2% Unknown 1.1% 10.5% 50s 33.3% 2.9% 2.4% 2.6% 1.7% 1.7% 2.2% 1.5% 1.4% 1.1% 49.2% $3,700 All 44.5% 18.8% 6.6% 17.0% 6.6% a b Jun-06 All 42.5% 5.2% 4.4% 3.9% 2.6% 2.3% 2.4% 1.6% 1.7% 1.8% 31.6% Age Group Many Recently Hired 401(k) Plan Participants Hold Balanced Funds 60s 36.1% d 2.9% 2.1% 2.3% 1.5% 1.6% 2.0% 1.2% 1.1% 0.9% 48.1% Plans With GICs and/or Other Stable-Value Funds 20s 60.2% 17.4% 3.6% 2.2% a 3.6% 6.0% b 4.2% 2.8% 100% c All 31.4% 2.3% 2.6% 2.3% 1.5% 1.5% 2.5% 1.5% 1.4% 1.1% 52.0% Percentage of recently hired 401(k) Percentage of Account Balance Invested in Target-Date Funds participants holding balanced funds, 1998–2012 Dec-06 $20,000–$40,000 37.3% 21.6% 8.5% 8.2% 2.1% 17.8% $3,832 30s 55.1% 13.9% 5.8% 4.4% 6.6% 7.5% 4.0% 2.7% 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% Age Group 1998 >$40,000–$60,000 1999 2000 200 37.1% 1 2002 17.1% 2003 2004 10.8% 2005 20 9.2% 06 2007 2.5% 2008 16.6% 2009 2010 2011 2102 Percentage of Account Balance Invested in Target-Date Funds 40s 44.7% 12.1% 8.5% 6.2% 10.5% 9.8% 5.6% 2.6% 100% Jun-07 20s 0–2 27.0% 28.3% 47.7% 27.1% 1.3% 27.3% 1.3% 32.7% 35 1.4% .1% 38. 1.0% 9% 43.5% 1.0% 48.5% 1.8%51.1% 1.1% 63.6% 1.0% 64.1% 690.8% .6% 72.0 41.7% % 70.8% >$60,000–$80,000 40.8% 14.4% 9.5% 9.5% 2.8% 15.9% Age Group 50s Zero 33.4% 1–10% 10.4% 11–20% 11.5% 21–30% 31–40% 7.7% 41–50% 17.7% 51–60% 10.8% 61–70%6.0% 71–80% 2.6% 81–90% 100% 91–100% 30s 29.0% 31.0% 2$3,8 8.3% 93 26.5% 33.1% 36.2% 39.8% 42.8% 47.9% 54.2% 59.6% 61.2% 63.0% 68.1% 69.5% >2–5 >$80,000–$100,000 52.8% 2.2% 42.7% 1.9% 12.5% 1.9% 1.4% 9.7% 1.4% 9.7% 1.7% 2.7% 1.2% 15.4% 1.2% 1.2% 33.3% Dec-07 60s 26.1% 9.0% 14.5% 9.4% 25.0% 9.0% 4.6% 2.4% 100% 20s 48.0% 0.9% 0.8% 0.9% 0.7% 0.8% 1.8% 0.9% 0.8% 0.6% 43.8% 40s 30.5% 33.6% 30.8% 27.9% 33.7% 35.7% 39.8% 42.1% 46.6% 52.8% 57.8% 59.3% 59.9% 65.0% 67.2% >5–10 >$100,000 60.4% 3.0% 46.9% 2.4% 11.2% 2.3% 1.6% 7.2% 1.4% 10.1%1.5% 2.3% 1.2% 15.3% 1.3% 1.4% 23.5% d All 36.7% 11.0% 10.8% 7.3% 16.6% 9.6% 5.2% 2.7% 100% 50s 30s 30.9% 45.7% 34.9% 31.4% 2.1% 29.21.4% % 33.9% 1.5% 35.5% 1.1% 40.3% 43. 1.1% 3% 47.8% 2.0% 53.4% 1.3% 58.0% 1.1% 58.7% 590.9% .1% 64.242.4% % 66.7% >10–20 All 66.3% 4.3% 41.8% 2.9% 15.5% 2.5% 1.8% 7.3% 1.6% 9.5% 1.6% Jun-08 2.2% 1.4% 18.0% 1.8% 2.7% 13.0% $3,661 60s 28.4% 34.9% 33.2% 29.1% 30.2% 30.7% 36.3% 41.6% 45.5% 50.1% 53.9% 53.6% 55.2% 60.7% 63.9% Tenure (years) 40s 48.1% 1.6% 1.5% 1.7% 1.1% 1.2% 1.8% 1.2% 1.1% 0.9% 39.8% >20–30 72.2% 5.1% 3.0% 2.6% 1.9% 1.7% 1.6% 1.2% 1.0% 0.9% 8.9% Plans With Company Stock All 28.9% 31.3% 29.1% 27.4% 33.0% 35.4% 39.3% 42.8% 47.6% 52.7% 59.9% 60.9% 63.0% 67.5% 68.6% 0–2 63.6% 11.6% 7.4% 3.4% 5.0% 3.5% Dec-08 3.9% 1.7% 100% 50s 48.2% 1.6% 1.4% 1.6% 1.1% 1.2% 1.6% 1.1% 1.0% 0.8% 40.4% >30 77.1% 5.1% 2.6% 2.1% 1.4% 1.2% 1.0% 0.7% 0.7% 0.7% 7.4% $20,000–$40,000 32.1% 16.6% 5.5% 14.1% 5.7% 20.8% Source: Tabulations fro m EB RI/ICI P articipant-Directed Retirement P lan Data Collection P ro ject. >2–5 56.0% 13.6% 8.5% 4.5% 6.5% 5.1% 4.1% 2.0% 100% 60s 51.2% 1.6% $4,089 1.2% 1.4% 0.9% 1.1% 1.4% 0.8% 0.8% 0.7% 39.0% a All >$40,000–$60,000 59.0% 3.1% 28.7% 2.2% 22.0% 2.1% 1.5% 6.9% 1.4% 12.3%1.6% 5.9% 1.1% 1.3% 1.4% 16.2% 25.3% The analysis includes participants with two or fewer years of tenure in the year indicated. Jun-09 >5–10 46.0% 13.3% 9.6% 6.4% 10.9% 6.9% 4.4% 2.6% 100% All 47.7% 1.3% 1.3% 1.4% 1.0% 1.0% 1.8% 1.1% 1.0% 0.8% 41.7% b >$60,000–$80,000 28.8% 21.8% 6.4% 11.5% 6.5% 16.6% "Balanced funds” include mutual funds, bank collective trusts, life insurance separate acco unts, and any poo led investment pro d uct primarily invested in a mix of equities and fixed-income securities. >10–20 36.3% 11.0% 10.5% Percentage of Account Balance Invested in Non-Target-Da 7.8% 15.2% 10.3%te Balanced Funds 5.3% 3.4% 100% >$80,000–$100,000 32.1% 16.6% 6.5% 11.8% Dec-09 6.3% 15.6% $4,167 Percentage of Account Balance Invested in Non-Target-Date Balanced Funds >20–30 25.9% 10.2% 11.4% 8.2% 21.1% 12.8% 7.1% 3.1% 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 33.6% 12.5% 6.7% 14.4% 5.4% 15.4% >30 17.6% 9.5% 12.5% 10.0%Figure 3528.8% 13.7% 5.6% 2.3% 100% Age Group 0–2 Zero 82.3% 1–10%1.8% 11–20% 1.8% 21–30% 1.2% 31–40% 0.6% 41–50% 0.5% 51–60% 0.7% Jun-1061–70% 0.4% 71–80% 0.4% 81–90% 0.3% 91–100% 10.0% All 32.3% 18.6% 5.1% 13.0% 5.5% 18.3% d All Many Recently Hired 401(k) Plan Participants Hold Target-Date* Funds 20s >2–5 80.2% 36.7% 81.6% 1.4% 2.6% 11.0% 1.8%2.1% 10.8% 0.9%1.5% 7.3% 0.5% 0.9% 0.4% 16.6% 0.8% 0.9% 0.8% 9.6% 0.5% 0.5%5.2% 0.4% 0.5% 2.7% 0.5% 0.3% 100% 8.2% 12.6% d $3,889 Plans With Company Stock and GICs and/or Other Stable-Value Funds Dec-10 Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. >5–10 79.5% 3.8% 3.1% Percentage 2.5% of recently 1.4% hired participants, 1.1% 2006 1.0%–2012 0.5% 0.5% 0.5% 6.1% 30s 83.1% 1.8% 2.0% 1.2% 0.6% 0.5% 0.6% 0.4% 0.4% 0.3% 9.1% a $20,000–$40,000 30.0% 10.3% 11.1% 5.5% 2.2% 18.1% 17.3% 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 79.4% 4.8% 3.8% 3.1% 1.7% 1.2% 1.0% 0.5% 0.4% 0.4% 3.8% Holding Balanced Funds Holding Target-Date Funds* Holding Non-Target-Date Funds 40s 83.0% 1.9% 1.9% 1.4% 0.7% 0.5% 0.6% 0.3% 0.4% 0.3% 8.9% Jun-11 included in the fund’s name. >$40,000–$60,000 32.2% 9.8% 12.7% 6.8% 2.6% 17.5% 15.8% $3,972 b >20–30 79.0% 5.4% 3.9% 3.2% 1.8% 1.2% 1.0% 0.5% 0.4% 0.4% 3.1% Age 50s GICs are guaranteed investment contracts. 83.5% 2.1% 1.6% 1.4% 0.7% 0.6% 0.6% 0.3% 0.4% 0.3% 8.5% >$60,000–$80,000 33.6% 9.4% 11.5% 7.0% 2.6% 17.7% 15.1% c Group 2006 >30 2007 2008 80.5% 2009 2010 5.1% 2011 3.5% 2012 2006 2.9%2007 2008 1.7% 2009 1.2% 2010 2011 1.0% De2012 c-11 0.5% 2006 2007 0.4% 2008 0.4% 2009 20102.9% 2011 2012 Row percentages may not add to 100 percent because of rounding. Percentages are dollar-weighted averages. 60s 83.5% 2.0% 1.3% 1.3% 0.7% 0.6% 0.7% 0.4% 0.3% 0.3% 8.9% >$80,000–$100,000 35.9% 7.8% 11.3% 7.6% 2.4% 16.0% 15.2% d The analysis includes the 12.3 million participants with no equity funds at year-end 2012. All 81.0% 3.6% 2.9% 2.3% 1.2% 0.9% 0.9% 0.5% 0.4% 0.4% 5.9% 20s 48.5% 51.1% 63.6% 64.1% 69.6% 72.0% 70.8% 29.4% 31.7% 46.5% 48.5% 52.0% 53.6% 52.0% 22.5% 21.8% 19.3% 17.7% 19.0% 19.5% 19.8% All >$100,000 82.3% $3,6 1.8% 19 36.2% 1.8% 1.2% 6.6% 0.6% 9.5% 0.5% 7.4% 0.7% 3.7% 0.4% 0.4% 13.7% 0.3% 16.7% 10.0% Jun-12 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. 30s 47.9% 54.2% 59.6% 61.2% 63.0% 68.1% 69.5% 28.5% 35.1% 43.5% 47.3% 47.8% 52.1% 54.3% 22.5% 22.2% 18.8% 16.4% 16.9% 17.6% 16.9% All 34.9% 8.6% 8.8% 7.9% 2.5% 17.3% 14.9% 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 2012 EBRI/ICI database. is generally years working at current employer, and thus may overstate years of participation in the 401(k) plan. a 40s 46.6% 52.8% 57.8% 59.3% 59.9% 65.0% 67.2% 27.4% 34.2% 41.8% 45.5% 45.3% 49.5% 51.9% 21.3% 21.4% 18.3% 16.1% 16.1% 17.1% 17.0% The analysis includes the 3.6 million recently hired participants (those with two or fewer years of tenure) in 2012. Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. Dec-12 b Row percentages may not add to 100 percent because of rounding. $3,785 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 50s 47.8% 53.4% 58.0% 58.7% 59.1% 64.2% 66.7% 28.1% 34.9% 42.2% 45.2% 45.0% 49.2% 51.8% 21.4% 21.2% 18.1% 15.5% 15.5% 16.5% 16.5% A target-date fund typically rebalances its portfolio to become less focused on growth and more focused on income as it approaches and passes the target date of the fund, which is usually included in b c Salary information is available for a subset of participants in the EBRI/ICI database. Jun-13 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 60s 45.5% 50.1% 53.9% 53.6% 55.2% 60.7% 63.9% 26.1% 32.1% 38.4% 41.0% 41.7% 46.5% 48.8% 19.8% 20.3% 17.3% 14.2% 14.5% 15.4% 16.5% A target-date fund typically rebalances its portfolio to become less focused on growth and more focused on income as it approaches and passes the target date of the fund name. Note: “Funds” include mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investment produc $3,858 t primarily invested in the security indicated. The tenure variable is which is usually included in the fund’s name. Dec-13 Note: “Funds” include mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investment product primarily invested in the security indicated. All 47.6% 52.7% 59.9% 60.9% 63.0% 67.5% 68.6% 28.3% 33.8% 43.6% 46.6% 47.6% 51.2% 52.3% 21.9% 21.7% 18.7% 16.5% 17.0% 17.8% 17.7% d generally years working at current employer, and thus may overstate years of participation in the 401(k) plan. GICs are guaranteed investment contracts. Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. Note: “Funds” include mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investment product primarily invested in the security indicated. * A target-date fund typically rebalances its portfolio to become less focused on growth and more focused on income as it approaches and passes the target date of the fund, which is usually included in the fund’s name. Note: The analysis includes the 3.6 million recently hired participants (those with two or fewer years of tenure) in 2012, the 3.4 million recently hired participants in 2011, the 3.2 million recently hired participants in 2010, the 3.1 million recently hired participants in 2009, the 4.0 million recently hired participants in 2008, the 3.8 million recently hired participants in 2007, and the 2.8 million recently hired participants in 2006. "Funds" include mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investment product primarily invested in the security indicated.