The evolution of 401(k) plan designs has resulted in a significant increase in the use of balanced funds, including target-date funds, by recently hired 401(k) plan participants in 2013 compared with recently hired participants 15 years ago, according to a newly updated annual report by EBRI and ICI.
- The bulk of 401(k) assets continued to be invested in stocks. On average, at year-end 2013, 66 percent of 401(k) participants’ assets were invested in equity securities through equity funds, the equity portion of balanced funds, and company stock. Twenty-eight percent was in fixed-income securities such as stable-value investments, bond funds, and money funds.
- More 401(k) plan participants held equities at year-end 2013 than before the financial market crisis (year-end 2007), and most had the majority of their accounts invested in equities. For example, almost two-thirds of participants in their 20s had more than 80 percent of their 401(k) accounts invested in equities at year-end 2013, up from less than half of participants in their 20s at year-end 2007. Overall, 90 percent of 401(k) participants had at least some investment in equities at year-end 2013.
- Seventy-one percent of 401(k) plans included target-date funds in their investment lineup at year-end 2013. At year-end 2013, 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.
- A majority of new or recent hires invested their 401(k) assets in balanced funds, including target-date funds. For example, at year-end 2013, nearly two-thirds of recently hired participants held balanced funds in their 401(k) accounts. Balanced funds were 41 percent of the account balances of recently hired 401(k) participants at year-end 2013.
- 401(k) participants continued to seek diversification of their investments. Only 7 percent of 401(k) accounts were invested in company stock at year-end 2013, the same share as in 2012. This share has fallen by 62 percent since 1999. Recently hired 401(k) participants contributed to this trend: they tended to be less likely to hold company stock.
- Participants’ 401(k) loan activity in 2013 was little changed from year-end 2012. At year-end 2013, 21 percent of all 401(k) participants who were eligible for loans had loans outstanding against their 401(k) accounts, the same as in the prior four years, although up from 18 percent at year-end 2008.
- The year-end 2013 average 401(k) account balance in the database was 13.2 percent higher than the year before, but may not accurately reflect the experience of typical 401(k) participants in 2013. To understand changes in 401(k) participants’ average account balances, it is important to analyze a sample of consistent participants.
- The average 401(k) account balance tends to increase with participant age and tenure. For example, at year-end 2013, participants in their 30s with more than two to five years of tenure had an average 401(k) account balance of nearly $25,000, compared with an average 401(k) account balance of nearly $250,000 among participants in their 60s with more than 30 years of tenure.
Figure 25 Figure 48 Average Asset Allocati Figure on of 401(k) A 21 ccounts, Figure 1 Figure 5 401(k) Loan Activity Varied Across 401(k) Plan Participants Figure 32 Average Asseby t A Plan Siz llocatione o and Investment O f 401(k) Accounts,ptions by Participant Age Relationship of EBRI/ in plans at Relationship Between provide participants in their VanD Deloitte Figure term investme Average Lo years of t funds, MacDonal References Asset Allocatio erhei, . . compar 24, d Consu 201 200 for e d, B Average Asset pr nur Ja 2 4e e an Balances d b o ck, and Lori L e w a n ed with v l. . “A nnie ting ch participan ious employ t strategy, Privat epp re LLP an -Jean 60s. Alm n more en to E e P 7dix: 6n e per Allocation of 401(k) Accounts, q us e, n I d I uities Account Balances and Salary CI 401(k) D li s u e and Additio t inclu ion Plan kely not to r cas. 20 o ing c n s or rolle ent st two-thir vestment Co Kevi .................................................................................................. a mi ide n n 10. al Bu 2 d x of n D. 0d ov Fi dat 1 “T be lle g 2 ds a u , 61 perc a e tin, Abstract he Im Moore. 2 er into res sset classes that follo mpany I tabase Pl invested in of of 4 for birt 0pact o 1 in the ( h, f ent in 200 k) 011. n dividual ret stitut pla rE equit om ans to the Universe of All 401(k) o f B Auto-Enrollme “Moving fn RI/ICI by Partic 2 e. 2 partic whic 0y fu 0 9, 43 perc 8 011. h a Partic iForm reme nds ipants w a Beyo ipa n Insi a pr (Figure n nt g i5 p t nd t n i e de the Struct 500 e accounts ent ant-Direct Salary and I t an n d grou the etermi h Ann id Autom e Limit n 27 i p is r 20s ha 2). T 0 uned re 0 al ed assigned; (IR 6h a , Re e ti n ur a a Retirement P A percenta ons of v n tic Contri ports d more than s) are e of Defin e allocation, ty d 7 perce stment O (Version 1.2) date o not Trad ge o buti Plans e n inc itio p d C t ltio fa 80 percent on Escalation f hir ipi n Data lude n nal R participants o n ......................... 21 cally re 1 ntributio s e, 998 ...................... d. e from ipla W Coll n (Fi th a balanc cshing of t g eme e w n ec ur /401(k hol hich a on tion e h n ton, i3 eir n d t 7 g to ing ). ) 24 401(k) Plan Characteristics,Fig by Figure 37 u Number of Pl re 27 an Participants, 2013 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 401(k) Participants Represent a Range of Ages Percentage of Eligible Participants With 401(k) Loans, a 32 12 Figure 7 a 21 34 Asset Allocation Distribution of 401(k) Participant P Perc ercent entage of age of ac ac Figure 4 cc ount ount bal balanc ances es,, 2013 2013 For the av November 19 and ad Lifestyle fun Other resear visers. Members of IC Numerage 401(k) plan asset ber of Pl 81 that prop d ch suggests that most 401 s maintain a predetermin an Participants I manage total osed regulations were i alloc Many Recently Hired 401(k) Participants Hold a assets of $17.4 trilli tion to e(k) participan d risk le equities svel and generally suedts (see (thr on and ser do n ough eq Holden, Brady, ot mak vuse words uity funds, c e more than 9 e active ch and su an Hadley 2006 o 0 ch as “c mpany stock, and the equi mi ges to llion shareholders (see Burham, on their asset all ser ; Employee B vative,” ocati eons nefit ty account tenure analysis. Concentratio no e shift its Rates.” So Retirement Income Adequacy.” Plan P DC: U.S. qr uity oje ran focus balan Fe cfun Furt ge t f es: A S n o i d De r Year- c from gro ss tends to is highest amo ciet h es investe assigned; e pa rmore, acco y of Actuaries trtment of udy Assessing th Enw d 20 th fal d i ou tn l03 o Labor, Employee tstanding loan e as salary incr income n u.” g r n qt ba uiti Investment Co (September). ecently elances Te Mec s, co EBRI o over tal Pl hir mpared w Issue ans e h time. ar bala ases. ani ed e net Bene c Available at partici Brie mpany I s of th nce; T At year of oifits Se th tal f, fun un p no. Par e ‘A Figure 42 lant e Figure 12 n pai Figure 44 ss than dstitut t 3 s - is cur ll-I ce d iwww.soa.org/research/resear in th 4 pants with nd loa n 9 ity Admin ’ (November). e Pers 20 Fee. on target-date e n 13, partici ba e-quarter W lanc pective 1a i5 stration shing p e perce Tant’s s otal . 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At year ,421, unt -end Percentage of active 401(k) plan participants and Figure Activity in 2013 25, Average Asset Allocation of 401(k) A Domestic Stock and Bond Market Indexes ccounts, by Plan Size and Investment Options .................................. 26 Account Balance N to on-T Baarget lanc - ed Funds, by Age 1–10 8 20,177 103,321 $9,019,376,706 $87,295 Tenure Composition High Concentrations in Balanced Funds of Selected 401(k) Account Balance Categories “moderate,” during any given year portion Research In Bogdan, and Schrass 2014b). of bal stitute 2005; and U.S or “aggressiv anced funds) by . For Percentage e example, an ” in their name to indicate the f participant age, N. o New Inter n-E Tof 401(k) Plans Offering ar B 401(k) Participants Tend Not get R n ICI survey of al Rev I/IC -DaI 401(k) D tesee Fig enue Service 1981). u re re 21. a cordkeeper tab und’s ri ase R Loans, sk level. 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Information Technolo Bal gy an ance t d Researc 1996o Equi 2000 h Databases at E ty Funds, 2002 by 2005 BFigure 9 R Part I. Steven 2007 icipant Bass 2008 A is an ge, T associate econom 2009 enure, 2010 or Sal 2011 ary ist at ICI. An 2012 nMari 2013e Pino 401(k) plan assets, by a participant age, 2013 201 balanc compare Distributio 3, al es of l d wit 401 lo n (k) plans h h nger of 401(k $7,15 -ten 3ured in )e Participants’ ld tha total o partici e yearp -en ants at f d $4.2 Balanc 20 trillion 12 data their Target ed curr Fund Alloc -D in base (Figure 49 at asse e ent em ts, and t ations by A ployers h ). Th e ’ 4 da 0 g a, 1 e e tabase r b (k me ......................................................... ) p dian lans e pres loan . Reents abo tireme balance nt savin uoutstandin t 46 g perce s helg was $3 n dt of at pre tha ......... 25 vt,973 ious at Equity Date Balanced Bond Money GICs /Stable- Company 11–25 15,387 261,895 $21,722,813,268 $82,945 Month-end level, Percent December 2002 to November 2014 age of participants, c, 20 d 13 Percentage of recently hired participants holding EquiPercentage ty Target-Daof participants w te High Concentrations Balanced B ith ond account Mon in Company ey balances GICs /in specified ranges, 2013 S tStock able- Company Memo: All 18% 18% 17% b 19% 18% 18% 21% 21% 21% 21% 21% Ass Changes in et Allocatio Concentrations in n of 401(k) Plan Percentage of Particip participants w Eq Wi uities Since the Financial an de Cross Secti ts Witho ith Percentage, 2013 account balances less ut Equion of 401(k) Uni ty Funds Crisis than $10,000 at verse year-end 2013 the non–targ accoun By Jack VanDerhei, EBRI director of Research; Figure 1626, ts f Asset Allocatio oun et date b d that 10.7 Percentage alan n D percent of DC c Balances ed fund category. istribution of participants w of for Participants 4 plan particip 01(k) Partici ith account ants paWith Loans, nt Account Sarah Holden, ICI senior changed balances Bal the asse by ain specified ranges, 2013 nce to Plan t all Equity Size, ocati Fu 2013 on of th nds, dire by Par e ctor of ir account b ticipant Reti arement l a nce s in Plan funds experienc target-date fu bala (Figure nces e of “typical nds; amon 38). are construct Fifty-si ” 401(k g x participants percent ed as th ) plan Snapshot of r parti e sum in t ec ce ipants. h of all ntly hir eir of Y 60s, part ear- ed part 13 percent icipa End n icipants t 401( balances of t k)holdin A heir ccount in 40 g no the 1(k plan. n–tar Bal ) assets Plan g aet-date nces wer size is ebala inestimated as vested nced fun in ta ds ha rget the -dat d mo sum ere fun of ds. is an ICI research assistant. This Issue Brief Funds Per F was written with assistance from c unds entage of par Funds ticipantsF , 2013 unds th Fe unds Institute’s r Value esearch anSt d oc editori k al a,b 26–50 400 26 total. 6 year-en employers or Th d 2013, compared e dat amounts rolled over abase also covers with $3,858 i about to IRAs 11,133 hal n t are h fe year of the not i -e un nnd 2 clu 404,680 ivers ded 012 e of in t data h active 401(k e a base. nalysis. To capt Nev $31,619,682,269 ) e plan rtheless, the parti ure as lo cipan ratio o ng a s ts anfd nearly 15 th a $78,135 vings h e loan outstan istory percen as ding t of 38 Distributio Age Group n of 401(k) Participants’ Com b, c pan balanced fund assets, y Stock Allocations selected years ................................................................ c ............ 25 e 60s Decem Aber 20 ge Grou 14p • No. 408 Funds F unds Funds Funds Funds Value Funds Stock Other Unknow n Equities Percentage of recently Perc entage hired participants of Account Balanoffered company ce Invested in Balanced stock Fundsholding the This upd For year-end 2012 data, see Low acc Aca tite e o vunt balances am e 401(k) xtends previous findings from Plan Particip ong this grou Holden et al. 2 ants the project fo p can be expl 013. r 1996 through ained in two possible way 20s 2012. For year-end 2012 res a s: (1) their em b 92% ults, see Holden et al. ployer’s 401(k) The Mitchell, Employee Ben Van . . Olivia g 201 200 uar2e 4c d Grou e S., an . “Contri . fit Research Private p. d 20 b Pe Steph utio 12. nsion Pla n IHow Americ e n Beh n Utkus. stitute. avior of n B2ulleti 201 00 a 4 5Saves 2 2. “T .01(k n, Abstract o “Hisar )tory Plan get 012: of Par Dat 4 A f0 Re e 201 t1 Funds icipants (k port on 0 ) Pl Form ans in Duri 40 Va : An 55 1(k n nguar 00 A g U B )pdat R ull nnual d e tireme and Be 20 e.”11 Re Fact Defi nt Pla ports ar s Markets.” from EBRI. ned n (V s.” Contri ersion 1.0). NBE Na bution R Washin Working tional Tax Washin Pla gton, DC: n Da Pa g per, ta. ton, no. . 10 201 P0% lan2. Size 20 b 12 y N Univers umber oe f P Be artnchmarks icipants . Lincolnshire, IL: Aon Hewitt. 2013 and 7.4 Age ........................................................................................................................... percent changed the asset allocation 401(k) plan participant ac of th Figure 30 count eir contribu balances tions during 2 , selected year 013 (see 91% s Hol ............................. 26 den and Schrass active partici than and Investor Research; Luis Al 90 percp en ants in t t of 401( 17 their he acc plao nunt balanc an k) plan c d, as suc onso, EBRI director of Inf har e ih nac , does vested terisnot n tic in sno by en–target-date c number essarily repr of plan par esent th balanc ormation Technology and Research ed fu tic e total ipants nds at year n: EBRI/ICI 401( umber of -enemp d 201 loyees at t 3. k) he 70 20s 51–100 % 12% 11% 8,753 10% 11% 620,667 10% 10% $44,557,323,397 89% 13% 13% 13% $71,789 13% 12% Participa staffs. Any vi nts w ews expressed ith no 380 equity fund bala in this report nces are those of the aut may still hav Percentage of Account Balance Invested in Balanced Funds e exposur 4% hors, and e to the stock marke should not be ascrib t through com ed to th pe officers, tr any stock orustees, More 401(k) plan participants held equities at year Percent -end age of 2013 Ac compar count Balanc ed with e Inves year ted in E -end quit 20 y F 07, unds and many had higher possible, to the all 401( remain k) p only longer lans. ing acco The -ten unt distri ure babu d lance partici tion of decr p assets, partic ants ease are inc d slightly, luded i ipants, fronm this a and 13 percent plans 88% nalysis. However, in t at year-en he database it d 2012 to is important for 2013 12 perc is simi to note that t ent at lar to th year-en e huniv e tenure d 2013 erse 13 20s 31.9% 3% 35.0% 12.4% 5.1% 1.8% 1.9% 5.4% 3.9% 2.5% 75.5% Age 2% 87% percentage of their account balance indicated in company stock, 1998–2013 Asset Allocatio All Plans ns of Recently Hired Participants .................................................................................................. 25 plan has only 2013. Results f GICs are insurance company products recently been established or earlier years are available i Asse n (77 percent of that guar earlier issues tAlloca antee a sp tion of all 401(k)-ty ICI Research Perspective to Eecific rate of return quities pe plans in existe Varied on the invested capital ov nce in 2012 were establ er the ished Assoc DC: U.S. Valley Employee Ben 17911 (Marc 30si For a 39.3% tioDe g ne, P pa h rPA: Th ) oc e rtment of . Cam fit Research eedin e bg ridge, Van s Lab , 20% Ngi ne uard I o MA: Natio n r, Employee ty- stitute (Febr 19% S Grou ixth Annu p, nal V 18% a Bureau Bene u nguar a ary). l Conf fits 20% d of Eco Avai C Secur ereent labl nce er for n i20% e ty Admin on T omic R at Ret www.ebri a1998 xe 20% a isearc rem iti stration one,nt R Novem h. Availa .org/pdf/publ 23% e (Novem search. bble at er 23% 1 ber). Availa 3 Available i–15, cww atiow.n 22% 2 ns/facts/0205fact.a. 003, b at er.or ble at Chi 23% gc /ago, IL: papers/w 23%44 pdf 17 –5 911 3. $80, 101–250 000 7,538 1,200,891 $78,902,914,348 $65,704 Size of 401(k) Account Asset Allocation and Investment Options Balances 14% 2014). Coveri Databases; Steven Bass, ICI associate economist (Median ng a year earl 360 Age: 46 Years) databas ier, the ICI su e in 2013 v rvey of recor ersus 2012 DO 84%dkeepers cov L F ; and AnnMarie P or 18m 5500 for ering nearly 2 all 401( ino, ICI res 4k million DC plan participant ) plans earch assistant sponsoring firm. Figure 50 balanc 39 or other ed fu spons nds, which ors of EBRI, inclu E de tar BRI-ERF, or get-dat Z their staffs. Neit ero e funds. In fact, he 81 1–20% r EBRI nor percent ofEBRI-ERF lo 401>20% (k) part –80% bbies or icipants takes with no positions on specific >80% equity fund concentrations 30s in 44 equities. O .5% 22. v9% erall, at year 8.2% -end 2013, 6.6% 10 perce 2.7% nt of 4012. (k) pla 9% n partici 6.1% pants h 3.4 e% ld no equiti 2.3% es, do 75wn .5% Group Zero 1–10% >10–20% >20–30% >30–40% 11% 10% >40–50% >50–60% >60–70% >70–80% >80–90% >90–100% variable in (Fi of plans as r gures 47 an 40sdica 1–100 eported by tes the t d 50). Ini the me t addit h U.S. 22% iat in on, as i De divi 45.partm 0% 21% n duals prev e have been nt of ious years, va 20% 21. Labor 3% 22% (Figure with ri5. thei ation aro 3% 13% 22% 4). r curr und en 22% 11. t employ this avera 8% 26% ers a 5.g 1% e t n 26% e d may nds to not r 3. corres 25% 5% eflect t pond wit 26%h 0.e 1% len h 27% a gtghe of (th e Figure See Holden 27, Asset Allocatio et al. 2008 Age Group n; Holden, Distribution VanD of >0–50 percent 4 erhei, and Al 01(k) Particip onso 2009; ant Account >50–90 percent Holden, VanDer Balance to Equity hei, and Al Fu >90 percent nds, by Par onso 2010; ticipant and 90% . 201 253. % 2013 Universe Benchmarks Widely Among 401(k) Plan Participants . Lincolnshir 80% e, IL: Aon Hewitt. 251–500 13% 3,643 1,284,710 Figure 16 $80,225,170,694 $62,446 ( life of the con after 1993 [tabulation Year-end 2013 Sn www.ici.org/rese tract. apshot o arch/per s of f spective U.S. Dep 401(k) Pla ) an artment of Lab n Lo d Ean Activity BRI Issue Brief o ............................................................................................. 28 r Fo (rm 5500 data for 2012]), www.ebri.org/publications or (2) the /ib). employee only recently Balance Washin ww https://institut w.dol. d fun gton, DC: National dgov/ebsa/P , target ional.vanguar -datDF/2 e fund, and 01 Ta d.com/iam 0pe x Association nsionpla non–target-date /pdf/HAS12.pdf nbulletin. . pdf ba A v lanced er age fund use varied somewhat by age among recently hired 60% 340 $72,383 accounts f Alo l und that 9.7 p 20s ercent of DC 401(k) Loan A 52.plan participants 0% 84.9% mounts Varied 5. ch 2% A anged t cross 401(k) 7.3% he asse Participants 26. t alloc 4% ation of their 7.8% 16. accoun 5% t balances in 40s 50s101–500 13% 48.7% 23.8% 13% 15. 17% 9% 45.6% 17% 13%7.1% 17% 20.7% 13%7.6% 19% 6.0% 3.4 19% % 19% 11. 13% 4. 0% 0% 22%5.0% 7.1 22% % 3 4.22% .3% 9% 23% 2.1% 0.4% 23% 72.7% Plan Assets 20s 31.8% 2.3% 2.2% 2.0% 1.4% 1.5% 2.1% 1.3% 1.2% 1.1% 53.2% allocation policy proposa had linvestments in s. EBRI invites comment on either compa this rese ny stock or arch. ba lanced funds at year-end 2013 (Figure 28). For example, The investment optio At year- from 13 end perc 2 ent at year-end 2007, 013, the n avera s that a g 23. e ac 2plan offers % count and 44 balcan si a percent ha nce gni was $ fican d m 72, tly affect ho 383 ore than an ad th 8w 0 e percent partici median p accou ants of thallocate their eir nt ba account lance b bal wa 401(k a s $18, nces investe ) assets. Figure 22 433 (Fig d i ure n 9), time th older the parti ey have c part ipant, icipat the lo ed wer t in a 401(k he avera ) pla ge), n. One reason tenure (the h that igh job ten er the tenure of the ure may not re partici flect le pant, t ngthh of e lower t participatio he average), n in the Age, Tenure, or 501–1000 Salary......................................................................................................... 22.7% 2,461 1,724,113 $108,748,226,149 $63,075 .................... 27 Holden et al. 2011, 2012, 30s and 2013 Asset allocation distribution of 401(k) participant account balances for data f 86.0% or earlier years. 7.6% >5–10 Years 6.4% Morningstar. 2 Fidelity Investments. 20 013. Ibbotson 08. “Impact SBBI 2 of 01 74% 4 Ma Clrket assic Yearboo Volatility on k: Market R Participant esults for Exchange Beh Stocks, Bonds, avior.” B Bills, uildinand I g Futures: nflation; Impact of 1926– Median 401(k) Account Balance Among Longer-Tenured joined the plan (whether 60s Age Group 320 on his or her 9% 9% own or through 9% 10% autom 10% atic e 11% nrollment) 12% . In13% either event 13% , job tenure w 14% 14% ould Withi partici np th ants—r e ye 501–1, aecently r-en 000d 201 hire 3 E d B partici RI/ICI 46. p data ants i 2% ba n their se, it is 19. 2 7% 0 pos s ws eirbl e more e 6.to l 5%ink i likely ndivi t 10. oduals across be 1% highly 4. co 7%plans across a ncentrate 4.9% d in such fu majority of th 1.nds. 8% Foe r Percentage of 50s plan 43.4 assets % 13.6% 7.2% 9.4% 4.5% 7.5% 7.9% 4.3% 1.9% 64.0% 30s 38.2 4.5 3.9 3.4 2.3 2.1 2.1 1.6 1.7 1.9 38.3 2012 and 6.6 $70,000 percent changed the asset allocation 401(k) Loan Balances as a Percentage of a of their contribu 401(k) Account Balances tions during 2 46 b 012 (see Holden and Schrass Availability 80% and Use o 40s f 401(k) Plan Loans84.1% by Plan Size ........................................................................ 8.9% 7.0% ................ 28 86 14 7 percent o 1,001–2,500 f participants in their 20s 1,894 without equity 2,932, fund892 s held equitie $194,616,877,046 s through company stock, $66,357 balanced funds, or presents t The equiti but th Typical 401(k) Plan eere was s at y he edistribution awide variatio r-end 2013, c of plans, parti no in Participant mpared with balances. cipa For exam 43 nts, and assets percent at ple, a year- b by fo out thr enur com d 20 ee-qu 07arters of t b (Figure 31 inations of he participants ). Y investment of ounger 40 in t 1fer (k) h ings. e partic 2013 EB The ipants first RI/ICI were Tenure (years)21.3% to equities, by age, percentage of participants, 2013 401(k) plan, account . 201 balan 4. particularly c 20 e (t 14 he Univers higher among ol e the Be account nchmarks der part balance, t icipants, . Lincolnshir h is tha e lo e, $65,454 wer t tIL: Aon He the hpro e avera pos witt ed ge), reg . ulations and salar foy r 40 (th1(k e hi ) gh plans er t wer he partici e notp intr ant’s oduced The EBRI/ICI 401(k) databas Other stable-value funds i 1, 20s 001–5,000 en environment clude synth 45.3%69.5% e is certified to b tic GICs, whic 18.3% e 6. 2. h consi fully compliant with the ISO 5% 4% st of a portfolio 9.6% 15.6% 4.2% of fixed-inc -27002 Information Security Audit 5.6% ome 12.5% securities 3.5% Market Vol 201 . . . 3. 201 201 200 Chicago 3. 4a 5. “T . How Am aPrivate tili he ty , IL: Mornin Inf (D Pe luenc erica ecember). Boston, MA: nsion Pla e of Saves 2 68% gs Automatic tar Inc. n B 013: ulleti P A articip Enrollme Re n Historical port on Fidelity I ants, b n Va t, C Ta n ynguar A vestments. a bles tch-Up, ge an adn d Gra 20 d an S 12 alary d I p Defi hs (2 RA Contri , 2013 ned 01 Contri 2 Data butio bution Rel ns on ease Pla 401 n Versi Da (k) ta. o Accumulations n 1. Vall 0). ey Forge, PA: at 30 50s 0 81.1% 10.7% 8.2% 60s 50% 37.3% 13.0% 7. 50s 1% 11.6% 6.2% 11.7% 7.1% $63,929 3.8% 1.9% 54.5% not acc urately reflect actual 401(k) plan participation. 30s 23% recordke Introduction 401(k) Plan Asset Allocatio example, epers 455 0s percent . This 43.5 improve of re 5.8 cently hir s the i 4.7 d fed part or Participants W entifica icipants 4tion of .0 active in t ith Loans, by 2.6n, Account Balances, and Loan hei p r artici 20s 2 hel .3 Participant Age, T pants a 23% d mor 2.1 ne d r than esulte 910 enure, d .6 i perc n the re ent of 1.7classific their ac 1a .8 tion of count 1. 29.8 balanc 1 mie llion s in 40 Figure 100 28, Percentage of 401(k) Participants Without Equity Fund Balances Who Have Equity Exposure, by 2014). Analyz 0–2 2,501–5,000 ing 2013 data, The 6% Vanguard Group 2014 reported 5% 852 4% 2,997,718 5% Figure 23 7% th 6% $200,073,225,872 at “only 10 [p 9% 7% ercent] a 5% of DC plan particip $66,742 6% 9% ants 27 27% Share of Participant's Account both. In For year-end 1998 data, see deed, >5, 30s 000 59 60s percent of partici Holden, VanDe 41. pants i 9%54.n 5% their 77.0% rhei, and Quick 12.4% 20s withou 8. 2000. 4.t e 1% 4% quity 12.4% fun 8.d 2% s held 24. target 0% 4.2% -date f 10.6% unds— 8.4% 17. which 2% 10. ten 7% d to be category much more 401 401(k) Pla (k) dat isa th lik ba ne bas Lo se had ely to an Activity e gro hold e accou 21% up, qn uities an which Var t bala ies wit cons nces th d to his Pa h ts ao of rticipan t wer ld h Percentage of Account Balance Invested in Equities plans ie gh lo t A conc that wer ge, t e Tenure, Account offer h nan trations in $72, neit38 her 3, e cqthe siz ouities at mpany stock Balance, e of year-en the and averag nor GICs or ot Salary d 2013 com e acco .................................. unt p her stable-va ared balanc with y e. I eln ue ar-en fact, 3d 1 until 19 salary, the low 81. er the average) (Figure 50). Overall, loans from 401(k) plans tended to be small, with a sizable majority 280 31% Tenure “wrapped” wi standard. More All 20%th a guar over, EBRI has obtained a 43.5% antee (typically by 15.3% 7legal opinion that the methodolo .3% an insur 9.1a % nce co 4mpany or .4 Par %ticipant Ag ga bank) to pr 7y used e G .0% roup meets $60,329 7.3 ovide benefit the privacy sta % 4.0% n payments acc dards of the 2.0% 65. Gramm- 5% ording The data Retireme Washin The Van base gton, gnt.” uar inclu d DC: U.S. I Grou n des 401(k vestment Co p, Van De)pa partici gu rtment of mpany I ard C pants enter n Labor, Employee stitut across a wi fore Pers Retirepective ment de ran R Bene ge 11, no. esearch. Avai of fits Se age a 2, cur an nd t id lty Admin a e EBRI Issue ble at nure gro istration ups Br. At ye ief,(Se no. 2 p ar-e tembe 8n 3d (J 20 ruly). Avai ). Availa 13, 50 p ble labl ercent at e at >2–5 70 50 % s 46.2 6.2 15% 4.8 14% Account Size, or Salary 4.3 12% 2.8 14% Figure 36 15% 2.5, Selected Y Balanc 15% 2.1e Held in ears 17% Com 1.5pany18% Stoc1 k.6 18% 1.7 18% 26.2 19% 5,001–10,000 All 458 84.5% 3,208,543 8.2% $239,447,398,574 7.3% $74,628 partici Suggeste balancp ed fu ant a d ci nds, compare cctation: ounts that Jack d wer with VanD e multi 49 erhei, perce ple Sa acc nt of rah Holden, ounts own recent h e Luis Alonso, St id res in by single individuals. This pr their 40s even , and Bass, an 46 percd AnnM ent of ocedur rec arie e eallo nt Pino. “401 hires in ws EBRI th (k an eir ) P d IC 6 la0n Asset s in I to Participant Age or Tenure, 2013 ............................................................................................................... 27 Over the pas Allt three decades, 401(k 43.)5% plans have grown 15.3% to 7. be 3% the most9. wid 1% esprea 4.d 4% private-se 7.ctor e 0% mployer-s 7.3%ponsored traded within Average Asset Allocation of 401(k) Accounts, by Participant Age and Investment Options 40stheir accounts.” Similarly, 47.1% The Vanguard Group 2013 reported th 5.2% 28.6%at “only 12 [per 19.cent] of DC pl 1% an Barclays Ca Activity in 2013 pital U.S. A Age Group 59% ggregate BonZero d Index. Sa 1–20% n Francis>20–40% co, CA: Barc c >40–60% lays Global >60–80% Investors.>80–100% highly 27 conce $60,000 ntrated in equity securities for that age grou Figure 38 p—as their only equity investment. Another 12 percent of funds. 39.3 200 S7. For exa o percent ur Forty-t ce >5–10 : Tabu o lah m tifree o participants 26 ple, nearly ns 0frperc om E 13. ent B5 RI /I of participants i t CI w 24% had a P o-thir articiccount pds an 23% t-of Di r4 e balances o cte 01(k n the 2013 EB d21% Re ) plan tiremef n Russell 2000 22% l par t P ess th latnRI icip Da /ICI an ta ants 23% Co I 40 $10,000, ndex llein t cti 1(k oh n 23% ) eir 20s ha P database rowhi ject.le 19. 25% d m w 6 percent eo re re than 27% in these 80 of parti 26% pla percent nc s, whic ipants had 27% of t h hgen eir 28% account ac ercount ally Gustman, Al . 201an 4. L., and T Morningstar L homias L. Steinm fecycle Alloca eition In er. 200 dexes—U.S. Investors. 8. “How Changes in 2006 Social S Chicag eo, IL: curity Aff Morningstar, ect RecentI Retir nc. (Jeune ment 20 Tr 14 ends.” ). of 4 Average Loan 01(k) participants i Balances n al ......................................................................................................... l age groups hav c ing no loan outstanding at all. For >30 Ye exam ars ple, 88 percent o ........................... 32 f participants in to the pl Leach-Bliley Ac It is possible that th 40an at 6 > % 0 10,000 sSalar t. At no time has any nonpub book valu y49.6 Range ese 5e. .8 older, lo 4.3 nger 20s 380-te li3 c personal information that is personally .8 nured worker 11,681,930 2.6 30s s accumul 2.4 a 40s te 2.0 $903,529,287,709 d DC pl1an as .4 identifiable, such as a Social Security 50s s aets ( 1.5e.g., in a $77,344 1.660s profit-s 25.1 haring of pa ww https:// ww rticipants wer w.ici.org w.dol. pressr gov/ebsa/pdf/h /poom.vanguar d ef/ iper n th 1eir 1-030s or 2 istoricaltabl .p d $55,502 df .com/nonin and 40s, ww e ww. s.pdf hile de e13 b xe ri.org d percen /2013. /pdf t of 06. /bri 0partici efspd 3_How fp /e an _Ameri bri ts were _ib_07 ca_Saves_ in -2 the 0054.p ir 20s, 201 df 3.pd 27 perc f ent were 56% in their 50s, 41 1 a >50-90% Plans Without Company 1996 12. S 9tock, G 2000 ICs /Stabl 2002 e-Value Funds 2005 2007 2008 2009 2010 2011 2012 2013 a 50s 46. 16.2% 7% 6.4% 31.1% 16.5% begin to Allocation, Acc 201 803 (Figur cons e olidate 39). o M unt Ba an Conc y accoun Recen lances entrated ta t bala , and Loan Act tly Hired nces rget 401( -da for tindivi e fu ivity in k) Plan nd use duals 20 Part 13. acr range ” o icip EBRI Issue ss data providers to d an from 44 ts HoBrief ld percent of rec T, no. arget provide a mor 4-08, Dat a e ent h n Ba d ICI ires i la R nc e acc e ne sear th du Funds eir 20s hol rate estimate ch Perspective ding more of , Vol. Ro w perc >10–20 entages Age Group may no 20s t add to 27% 100 percent 9.9% 26% becaus >0–50 percent e o 26% f ro 0.9% unding. 26% P ercent 1.7% age 26% s >50–90 percent are do26% llar-w 3.7% eighte 29% d av18.7% erages 29% . >90 percent 65.2% 29% 30% 30% participants tr retireme In the datab nt plan aded in their in ase, ther the Unite e has tended to b daccoun States.ts.” Si In Percentage of account balances, 2013, milarly, Th e a down an estim war e Vanguard Grou ated d trend in 401(k) plan participants’ h 53 million America p 2012 reported that, “only 2013 n workers were a ocldings of, tive 4 11 [percent] 01(k) pl and an of Older, longer-tenure 240 d, and higher-income participants tend to have larger account balances, which are important for participA ants i ll n their 12.4 20s withMany Many Recently Hired 401(k) Participants Hold out equity 72,676 funds had eq 26,421,360 uity exposure only $1,912,462,296,033 through non–target-date ba $72,383 lanced funds, and offer balanc balanc Available N equity Bes gr es inves Al ER W l 60 Al% l eat fu o at rking Pape nds, bo ted i er tha 42.5 http://corporat n n equ nd fu $1r, i5 0 ties .1 no. 0n,d 000 at year 16% s, money 1e 4 (Fi .105 morningstar.c 4.1 g-e ure (J 14% nd fun une 1 2 0d 3 013, ). ). C .6 s, and balanc 16% Th ao compar e variati mbridge, m/us/doc 2.4 13%e od MA n in ed um wfunds as investment options. Another i: Natio 12% th 2 ents/In account .2less tha nd al 16% ex balanc 2.1 Bur nes/AssetAllocationsSummary.pdf hal eau o fes part 15% at1 year f.5 Econo ly- 14% refl end m 1ects the 20 ic Researc .6 07. 14% Old effects of 122 .7 h. e13% r 4 Available at perc 0 1ent o (33.1 k) parti 12%f cipant their Figure 20s, 29, Average Asset 73 percent 1–100 $20,000–$40, of 000 parti Alloccation for ipants i 44.3% $7, n th 363 401(k eir 40s, 22. ) Part 15.9% 8% and 86 icipa $19,586 nts Witho perc 4.2% ent of ut pa $52, Equity Fund Bal 13. r 336 ticipants 8% in t 5.8% $73, h ances, by eir 6 061 0s ha Partic d no $56, loans outstan ipant 476 Age d ing at b plan) prior to number, been t 60sthe introduc ransferred to or shared with E 20s tion of 401(k) 50. 96% plan featur 40.1% BRI. es. Howev 7.1% er, 13.7% such DC plan ar >20–30 Y 28.ears 3% rangements g 46.2% 13.9% enerally did not By Jack VanDerhei, EBRI director of Research; Refer and A11 target ences p >20–30 e -dat rcen ............................................................................................................................... e fund t wer typic e i aln ly th reba eir lanc 25% 60s es its(Fig po26% rture fo lio 5, to up be 25% co per me pa less 24% nel foc) us . Th edSarah Holden, ICI senior di o 24% e me n grow dian th and 25% a m goe o re ff o27% th cuse ed parti on i26% nc co ipants i me as it 26% rector of Retirement appr n th oe ........................... 45 ac201 28% hes 3 and datab pa 28% sa ses se is the 2 30s 11. 8.5% 6 1.9% 2.7% 12% 5.8% >90% 18.9% 12% 62.2% c 12% average accou 20, no. than 90 1perc 0 (Deen n ct of ember t ba their lances 2 acc 014 per in ). ount balanc dividual. es in target-date 28 funds to 37 percent of recently hired participants in their 60s. Bloomber 15 Soug rc Da e: Tata. bulaNew York, NY: Bloomber tions from EBRI/ICI ParticipPer ant-Dc ireentage of cteg d R L.P. etireme n r t P ec lanently Da27% ta C hir olleced par tion Projectic t. ipants, 2006, concentr partici EBp Ag Rants. I E e G ati m rou ploye on p B in, company y 22 e year- B 0 enefit R end e 2 sea 0stock rc 13, h In40 stit . In the 1(k ute I) s spla ue B wake n assets ha rief (IS of the c SN 08 d 87 20s g o ?r13 llapse of Enr own to 7X) is pu represent 18 blished on in 2001, p monthly >2–5 Y percent of all by the ears a Erticipants’ awareness of the mployee retirement assets, Benefit Research Institute, DC plan participants 30s traded in their acc Equity <100 ounts,” in 20 47.7% Target-Date11, 8622 Non-Target-Date down fr 0.1915319 om 16 percent in 2008, mak 12.8% 19.15319 Bond Money a c 39.5% GICs ing it at the ti /Stable- Company me “the meeting th101–500 eir income-replacement 46. nee 2%ds in retir 22.1% ement. For lon 5.7% ger-ten 12.6% ured parti 6.3% cipants in their 20s with salaries another >30 3 percent held comp 13% any stock as 16%Pertheir o centage 15% nly equi of A17% ccount B ty investment. a17% lance Inve18% sted Tw inelve Ta19% rg pe et-date rce F n 19% unds t had e19% quity exposur 20% e thro 20%ugh partici age, t partici Some recordkeepers targe e p p t nur 30 ants at ants dat % T e e, s enure (years owere i f>$40, th a year-end 2 e lary, contri fun 000–$60, n d, w plans t )hich 000 suppl is0 bu us 1 h3 tion behavior, at offer ua w ying data wer lly e inc relu a l d $16, GICs edittle i775 n thand ot e less likely to rollovers from fun e unable to provid d’ s her sta nam 14. $35, e6% . 074 h ble-v aother ve such alue plans, a e compl funds as an investm hi $75, gh 421 sset allocation concentrations ete asset all $106, o ent o , with in cation de 459equities at pdra tion, wtail als, loan in $90, additio on cert year-en 841 activity, nain pooled to d 20 the base 13 and Holden, ww . . w.nb Sarah Ho 201 or Tenure w 4 er.org b America Sav , Jack Va . Privat /pa ..................................................................................................................... e P pnDer ers/ ee nw1 s 20 shei, a ion Plan 41 14: 05 n A R d Luis Bu elle po Alonso. 2009. tin, Abstract rt on Vanguar o “4 fd 2 2 01(k 00 11 13 ) Form Plan Define A 5500 sset Allocation d Contr Annibutio ual Re n, Account Plan ports Data. (Version 1.1) Bala Vances, an lley .......................... 29 Forge, . Wa d Loa shing PA:n Th ton, e year-end 20 $50, 15 000 13 % (Figure 51). High Concentrations in Target-Date Funds permit employee contributi Note: The median account balanons ce at year and often were designed to -end 2013 was $18,433. be supplemental to other employer plans. Participants’ 46 years, a year older th 40san in 2012.8.9% Because olde 2.9% r partic b ipants te 3.7% nd to 7.4% have larg32.3% er account 44.9% balances, assets in the and Investor Research; Luis Al 1100 20s 13th St. N40s W, Suite 878, 3 W 30% ashington, 30% D onso, EBRI director C, 200 46.0% 28% 05-4051, at 24% $300 per 25% year of Information Technology and Research or 13.1% is 29% inclu >10–20 Y ded 26% as pa ears rt of 24% a member 40.9% 26% ship subs25% cription. P 26% e 4riodi- $45,519 60 c 24% In additio Acc50 ount Si n % 501–1, , at year-end 2013, 55 ze 20 000 0 47. percen 2007, 2008, 2009, 2010, 2011, 2012 and 2013 7% Funds t of the 21.3% Funds account bala 6. Balanced Funds 4%nces of r 11. ecently 9% Funds hire 6.4% d partici Fundspants i Value Funds n their 20s wer Stock e 8 Endnotes No t all par ...................................................................................................................... ticipants are offered this investment o 100- ptio500 n. See Figure 22. 6971 0.15485605 15.4856051 ...................................... 50 lowest level need to diver amountin Ag g to e0–2 observed sinc s $4.2 ify may hav trillion. In an e e [they] began increased an ongoing 66.3% collaborative effort, th d some plan sp tracking this data in 1999 2. on 4% sore s may Empl.” Utku have chang oyee B 18. s and Y ene 2% fit eR d plan design o esearch I ung 2010 reported th nstitute 13. (see 1% (EBRI VanD )at er an hei d the Plan Sponsor Council of America. 2014. 57th Annual Survey of Profit Sharing and 401(k) Plans: Reflecting 2013 Plan between * Asset $20, s do n >$60, 000 ot 50s add t 000–$80, and o th $40, e t 000 otal0 b00, t ecause of he m rou $30, ne didia 208 ng. n43.3% account b $60, a575 lance was $$121, 7 13.3% ,36887 3 in 2013 (Fi $166, gure 96216 43.4% ). Long $146, er-ten 327ured asset cl some combina Account balan asses 30s for one tion of target-date ces are net o 12.2% or more of thei f unpaid lo 22% fund 20% an bal s, no r clients. n–target-date ances. 22% The fin Thus, 19% al un balanc EBRI/ICI 401(k) datab paid 19% loan bala ed fu25% nds, or company nces are not included in any o 22% ase i 20% stock. As a re ncludes only 21% sult, many fplans for 20% the eight asse 19% whict h at options. Alter employer compare DC: U.S. cal Vanguard Activity in s pd wit os cont tage n De hribution Gro atively, 18 2008.” ra year pa te u pai rtment of p, Van -en d rates. Iin n d vestmen W 20 per g ash uar 07: 22 Labor, Employee This in cent of partici gto d Center t n, research Company D pe Crcen , and for Reti t a report p ddi of 40 Ins ants tio Bene nal rement Resear titute R 1(k were in exami mfits ) ail pla ing e Se n searc n o plans th es ffi cur p ce art the sih Pers ty Admin .ch. icipa P relat OS at offer company Availa Tn MAS pective ts ioin in th stration T ble ship ER 15, no. : eir a Sbet tend 60s (Se w ad ee stock but p ha dr 2, tembe n es d more than account an s cd ha rEBRI Issue nge ). Availa no sta s bal to: a EBRI 80 percent n ble bcle-valu es and partici Br I at ssu ief, e Br e n ie of t produ of,. 11 33 h 00 eir p 5 c ants’ ts, 50s 10.3% 4.5% 5.6% 20.3% 32.5% 26.9% 37% d <$10,000 12% 11% Percentage of recently hired 401(k) participants 11% 12% 11% 12% 16% 16% 15% 15% 14% account balances th 1001–5,000 at predate the 401 48.0% (k) plan are n 20.6% ot incl 7.2%uded in11. this an 4% alysi 6.0% s, which focuses on 401(k) balance C Brady, Peter. database are Databases; Steven Bass, ICI associate economist; op GI y C right Inf s are guara 201 more conc nt ormation: eed 0. “Measur investm entr ent This re ated amo ing Retir contractport s. en men g t is h copyright te ol Resource der 401(k) ed by the Em Adequacy. partici and AnnMarie Pino, ICI res p ”ploye ant Jour ge nal of r Be oups. At ye nef Pie t R nsion ese ar Economics an arch Institut -end 2013, 61 e e (EBRI d perc arch assistant Financ ent o ) an e d by 9, n f 40 the o 1(k . 2 ) Investment Options, All Ages 18 60s 0 5 39.5% 12.6% >5–10 Y 2013 EBRI/ICI ears 47.9% Investment Options >2–5 60. 8.6% 4 3.6% 21.7% 14.1% Figure invested 30, G in r Asset Allocatio ou bal p anced Zero funds, c 1–1 n0% too Equities Var mpared >10–20% w>ith 20–30 ied 54 Widely % perc >3ent 0–40% Am in ong 201 >40–5 401(k 2, 0% 40s 42 )perc Plan Participa >50–60% ent in> 2 600 –70% 0n 9t, s2 .......................................... 4 > p 70–80 ercent % in >80–90% 2006, an >90–100% d abou..... 30 t 13th 40s St. NW 100 , Su pl itan as e 878, se ts Washin 16% gton, DC,15% 200 501- 051000 -405 16% 1. Copyright 13% 20 3481 14 13% by0.07732806 Employ 18% ee Be7.73280611 nefit 16% Research 15% Institute. 16% All rights r 15% eserved. 10% N 13% o. 408. Investment Co 2002). In addimpany I tion, som nstitut e of this mov e (ICI) colle ement may be th ct $39,885 annual Ho data lding B o e result a nla millio nced Funds of regulation ns of 401(k) plan s put par in place by th ticipants as a 9.6% e Pensi means to on Protection examine 13 percent of Experience. . 20 201 % 3. DC plan parti “Ef Cfhicago, ects of IL: Pla Social S cipants n Spo ecurity traded in their reti nsor Cou Policies on ncil o Be f Amer nrement ac efit C 29% ica. laimincou g, Retireme nts in 2009, nt, an analyzing the d Saving.” NBplans admini ER Working Paper, stered participants i $10,000–$20,000 n >$80, their 000–$100, 20s ear 000n26% ing mor$52, 23% e th 945 an $8 22% 0,000 to $97, 26% $ 878 100,25% 000 ha $183, d a 26% medi 754 b, c an a 28% ccou $244, 29% n964 t balance 30% of $215, $52, 30% 750 945, w 30% hile those partici e pants with no equity f 60s unds had ex 14.5%posure to 6.3%equity-re 13.1% lated inves 25.9% tments throu 17.8% gh company 22.4% stock or balanced funds least 90 perc while age, t account categories described. th enur e rem balan e, a >5,000 ent of all plan a c ninin es investe d salary. Allg 16 perc d in ent of assets could equiti 50. participants wer e5% s at yebe identified. ar-e 43.9% 14.n 2% d 20 e i13, n plans compare 11. 9. 2% 8% that o d fwit 13.3% fe12. rh e 30 d 8% both percent o company stock an 6.8% f 401(k) pl 42.8%an d partici stable-val pants i ue products n their Equity, bond, money, and/or Eww https://pressr (Octobe quitiw.dol. es inclr u). d gov/ebsa/P e Av equit ailabl oom.vanguar y fund e at s,DF/2 co m www.ici.org/pdf p01 any d.com/content 1pe stocn ksionpla , and the /p equit nbulletin. er15 /7.nonin 5y po-0 rtio dex 2.p n pdf od e f ba f d/H an lanc d oed w_Americ ww funw.e ds. bri. a_ org/ Saves_20 pdf/brie 14. fspdf pdf/EBRI _IB_10-2009_No335_K- 40% holding the type of fund indicated, 2013 amounts. >5–10 32% $37,323 7.6% 51.1% 39 5.2% 27.1% 16.6% Investment Co plan assets were h $40, 50s 000mpany I 160 eld by pa nstitut rticipants 12% e (ICI). It may 11% in their 50s or be 12% used 60s 10% with , whi out permission but citatio 10% le 13 perc 13% ent of 401(k) 12% n 11% plan of the assets were h source 11% is requ 11%eld ired. by 10% (April 2): 0s 235– 48.4 262. 1.2 1.2 1.1 0.8 1.0 1.3 0.8 0.8 0.8 42.6 40 10 10.1% >$20,000–$30,000 26% 25% 22% 27% 26% 26% >2–5 Y 28% ears 29% 30% 31% 31% 7 percent amo 100 ng t Plan A hat a sseg tse --group in 199 1001- 8 (Fig 5000 ure 40). At 9054 year-en 0.20112849 d 2007 2013, among rec 20.1128488 ently hired participants in their All 48.0% 18.9% 7.5% 12.4% 6.3% 0–2 Years how th Act of 2006 (PPA), which li by Vanguard Invesbalanced funds tment o ese Age Group par >$100, p . Aon Hewitt 2 ttions icipants ma 000 are All grou 2006 namited the len 014 found th ped ge t into heir 10.2% 2007 $46, 40 ei 48.0% ght 766 1(k) acco at 16.1 perc gbroad th of time p 2008 3.3% 18.9% cate unts. $146, 6.4gori ent of pa 409 articipants c es 2009 5.0% . Equity fu 7.5% rticip $306, o 11.9% ants 2010 uld be required to hold c 596nds traded in 12.4% consist o 25.7% 2011 $399, their acc 6.3% 922 f poole 43.9% 2012 d o unts in 2013. Si invest ompany stock $347,m 083 ents prim 2013 milarly, arily Nono. 1 te: “ Funds 907”1 inc (Ma lude ym ). Cam utual funds bridge , bank , MA: National co llective trusts, Bure life insura au o ncFi e f Ec sgure 2 epar onomic Rese ate acco unts, and arch. Availa any poo led inv ble es at tment product primarily invested in earning mor 60s e than $100,000 had a m 10% 5.3% 9% edian account 10% bal 8%ance of 8%$46,711% 66. Among 10% longe 9% r-tenured 9% partic 9% ipants in 8% their 60s or both (Figur >10–20 e 29). 41.3% b 6.9%9.3% 32.6% 19.1% in a Fig Figures 60s at udditio re 31, Update. year-en n to Exposure to Equities Has Incre 10p % the dd 2007, alt f base oph tio ou ngh a s. lower shaare h sed Among 4 eld no equities. 01(k) Participa nts Between 2007 and 2013 ............................ 30 >$30,000–$40,000 140 25% 25% 23%S&P 500 26% 26% 26% 28% 28% 9.2% 29% 30% 31% 30s Age Group 54.2 c 2.6 2.2 >0–50 percent 1.9 4.1% 1.3 1.3 >50–90 percent 1.4 1.1 1>90 percent .3 1.5 31.2 participants in th Source: T e abulations from EBR ir 20s or 30s (F I/ICI Participant-D igure 5,irected R loweetirement Plan D r panel). ata Collection Project. 9 16 Equity, bond, money, and/or Plans With GIC Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. s /Stable-Value Funds 3.3% the security indicated. Percentage of Account Balance Invested in Balanced Funds AT A GLAN CE 20s, tar Poterba, T10 en g Jame et-da u % re (y100 ear tse fu s) , Steven Parnds ticipants acco F. -- Vunted for enti, and 7 Davi 5 >5000 percent d A. Wis of t e. 2 heir 00 16888 bala 7. “Rise o nce 0.3751555 d f f u401(k nd assets, or 0–2 Y ) Pl 37.51555 ans, Lifetime Ear ears 41 percent of nin tgs, and h 8.4eir ac % count Wealth balances at 28 401(k) Plan Assets 20s 2.7% contributed to their ac The cross-sectional analysis f For 401(k) asset figures, see Investmen 20s >20–30 20s 48. cou 5% Di nstr ts by their employer; specified or this pu ib51. uti 1% on blicatio 36.8% o 36.3% ftn fo 401 Company In 63.und that c 6%(k) Pl64. a o 8. stitute 2014. n nso 8% 1% s, rules regarding the n lidating the mu Par 14.7% t 69. ic6% ip 2.3% 8. ants, 1%ltiple acco 35.3% 72. and 0% otificati unts across a Assets o 49.0% 70. n of 8% 19. blackout peri 1% majority of the 67.6% ods; and Aon Hewitt 2 invested in ww . >$40,000–$50,000 w.nb 201 30% stocks, including a4c er.org 013 found th . Private /pa a p Pe ers/ nsion Pla w1 at 14.5 perc 24% equity 9071n mutual B 25% ulleti ent of particip n, Abstract o funds, 23% bank 25% ants c f o 201 llective trusts, life insur traded in 26% 2 Form 55 25% their acc 00 Annual 27% o8.unts in 2012. A 0% ance Reports 27% separat (Version 1.0). 27% e acco on Hewitt 201 unts, an 29% Washin d oth 30% 2 found gte on, r with $20,000 to $40,000 in s c alary in 2013, the median account balanc 7.9% e was $56,4 1.9% 76. For lon 1.7%ger-tenured participants in Relationship of Age and Tenure to Account Balances Barclays Capital Social Sec 40s Account balances are based on administrativ urity replaces a 12 60.0 0 Equities include equity funds, company stock, and the equity portion of balanced funds. “Funds” include mutual funds, 3.4 much higher fraction 2.5 e records and cov 2.1 er t1.5 he account balance at the 401(k) plan participant' of pre-retirem 5.5 1.4 ent earnings 30s 1.3 1.1 fo s current emp r lower-in 1.2 loyer. come worker 1.4 3.7 23.9 s. For Report availability: Brady, Peter, and Michael B This ro egdan. port is 2010. availa“A Look at ble on the I Pri ntveate-Sector rnet at www Re.tirement ebri.org an Pla d na Income After t www.ici.org ERISA.” Investment Figure 1, 401(k) balanced funds; and GICs 0–21–100 Plan Charac and/or teristics, 27% 48.3% 24% by Number 27% 17.3% of Plan 23% Participants, 2013 8.4% 21% 25% 6.4% ................................................... 22% 3.2% 19% 7. 13. 11% 4% 21% 7% 22% 17% ............ 7 30s 40.9% 12.6% 46.5% 20 Age Group >0–50 percent >50–90 percent >90 percent This report >$50,000–$60,000 $30, >30 is 000 P 100 an u erP cae rpdat ticipants ntage e of of -- EBRI an 24% plans, d IC pa 24% 40. rI’s tic 2% ongoi ipa 22% nts n,g research into an 24% d asse 10.ts by 1% 25% 401(k) plan nu 24% mber of 25% partic 33. pl6% ani p pa ants’ activity through 26% rticipa26% nts, 16. 20 1% 13 28% year 29% -end 35 Figure Retireme 32, Asset Allocatio Retirement sav nt.” NBER W ings held in plans at prev no Distribution of 401(k rking Pape The Em ious employ r, no. plo 1 ers or y3ee 091 ) rolled ov Benefi Part (May er into IR icipa t Research Institut ). C n As are not included. Account balances are net of t Account ambridge, MA: Balance to e (EB Nati RI) was founded in 1978. Its onal Bala Bnc U. ureau of Economi S. ed loan balances. AgFunds, gregate by Age c Researc m .................. ission is to h. 31 overall. The pattern o 30s bank collective trusts, life insurance separate accounts, and any pooled investment product primarily invested in the f tar 47.9% get-date an 54.2% d non–target-dat 59.6% e balanc 61. 2% 2%ed fund use vari 63.0% ed 68. wit 1% h participa 69.5% nt age. 67.8% 5.1 required quar that 14 Target pooled inv providers to the single individual owning the -date .6 per estments. Similar fucterly st nds were avail ent of par atem tici ely, n pats th ants ble in bond fu at mu traded i 71 per nds stm include a not c n are ent of th resulted in their acc any pool e o 4a u 0n ed ac n i1 ce overall increase of 6 percent ts in 2010, (k) p highlighting the importance of count lans 30s i pri n t and 12.9 percent changed the asset alloc m he year arily investe -end 2d in 013 in the aver bo data nds. diversi bas age Balanc e5. 6(Fi 401(k) account fication (see U.S gur ed e 2 f2 u). nd T sa are h tion ese . DC: U.S. . >201 5 2–5 0s 0.De “4 10 62.8 pa 40s 01 0 rtment of (k) Pla 3.7 n Asset Allocatio Lab 24% o2.5 r, Employee 25% n 2 40.1% .2 , Account 25% Benefits 1.5 21% Bal Seacur nces, an i22% 1 ty Admin .54.5 d Lo 12.9% 26% i1.3 stration an Activity i 23% (October 1.0 n 200 20%). 9.” 1 Available at .2 47.0% Invest 21% 1 ment Com .4 21% 21.0 p 19% any Distribution of 401(k) Participants’ their other stable-value funds 60s earni 101–500 ng more tha 10.3 n $100,0 46.00, t 4% 46.0% he medi Balanced Fund Allocations by Age 17.0% 16.2% an accoun6. t ba 8%lance 7.2% wa 8.s $34 1% 7,0 8.3% 83. 2.0% 1.7% 14.6% 15.5% 22 example, the b first-year replacement rate (scheduled S Fio gure 20 cial Security benefits as a percentage of d average career Participa >$60,000–$70,000 nts in 401(k) plans represent a 23% 10.3 24% wide ra 22%nge of 23% job tenure 24% expe 23% riences 25% . In 2013, 25%37 pe 25% rcent of t 27% he partici 28%pants in 17 Company I 6 nstitute Research Perspective 16, no. 2 (November). Available at www.ici. Bond I org/pdf ndex2012 Form /per16-02. 5500 pdf Age and acco Sala Longer-tenured participants are used in this analy runt y 20s balanc 8.9 security indicated. 37% e are positively co 11.2% rrelate sis to capture d am the longest possible w ong particip ork and sav ants 8.1% covered ings history 4.3 by t (see note a). T he 20 he tenure v 1380.7% databa 4.0 ariable se. Examination of contribute to 60s , to encourage, and to enhance the development of sound employee benefit ? The bul 0% 20% k of 401(k) assets continued to be invest 17% ed in stock 4.0 s. On average, at ye 3.9 ar-end 2013, 6 18% 6 percent of 100 P 50s lans-- 11.1 sum 38.1% 45016 13.0% 36 48.8% 201 Estim 3. The a >5–10 tes of repothe number of 401(k) plan rt is divided i23% nto four21% sections s and active 23% : the firs 19% t de partic scribes 18%ipants are based the E 24%BRI/ICI 20% 40on a combinati 1(k19% ) databas 20% e; th on e s of data from 18% econ 60s d 17% presents U.S a . Hewitt Associa Equity, bond, money, and/or Available 40s at tes. 20 www09. .nb 46. e Ho 6% r.org w Well /pap 52. Are ers/ 8% Em w130 ployees 91 57. 8%Saving59. an 3% d Investin 59. g in 9% 401(k) Pl 65.0% ans: 2009 67. He 2%witt Univ 65.6% erse This Figure 2, Distribution paper is 501–1, an an 000nual b of update to ICI 401(k) Plans, 46.5% an Part d EBRI’s o icipants, a 17.7% ngoi nd nAssets............................................................... g re 6.6% search int7. o 7% 401(k) plan 1.6% particip14. ants’ a 4% ctivity. ................... 7 The previous Joint C balance. This s o >$70,000–$80,000 mmittee on 60stends to be y tatistic should 65.2 80 ears w Taxati ith the current employ 3.5 on 2006). be interp 26% 2.2 23% reted with caution, as it may not repres er rather than y 2.0 22% ears of participation in the 401(k) pl 1.4 22% 23% 1.4 an. O 22% 1.2 ne reason that job tenure m ent the total 401(k) assets owned by the 24% 0.9 24% ay1 not reflect length .0 24% 1.2 26% 19.9 27% plans o of their con pooled ww Institute R accou ffer w.dol. ed t tri ngov/ butions. Aon target-date fun e ssearch P inves ebsa ted /ped in rspecti f/ 201 Hewitt 2011 f both s ds to 66 2vpeens 16 tocks i, n perc on an o plan . 3 ent of the participants in the o d und that 14.2 percen ,bu bonds an lletin. d EBRI Issue Brief, . They pdf F igur are e classified 22 t of no.participants tr 3 into database. 50 (November). two sub Am caded in their ateg ong Available ories: partici target-dat p at an accoun ts who e fun ts in 2 wer de s and 010, Participants include the 26.4 million 401(k) plan participants in the year-end 2013 EBRI/ICI 401(k) database. Who we are $20, 5% 000–$40, 60s 000 401(k) P 64. lan A 1% 36.4% ssets Are 4.Concentrated 5% 12.8% 20. in Equities 8% 50.8% 10.5% earnings) f Figure 33, Asset Allocatio or retired workers in the 1940 30s n Distribution of 401(k 15.0% –1949 birth coho ) Participant Account rt (individ 8.9% Balance to uals aged 64 to 73 in 2013 Balanced Funds, 76.2% by ) decreased as Tenure ............. 33 the database >10–20 had five or fewer y 15% ears of programs and so 14% tenure 16% an und public policy d 5 13% percent 13% had mo through objective 17% re than16% 30 y resear ear14% s of te ch and educati nure 15% (Figure on. EBR 14% 6I is the only ). The 12% median the a Indivi balanced funds; and company stock g dual e composition of 4of participation in the 401(k) plan, particilarly 01(k) partic acco ipants’ asset allocat unt balanc 36.9% among older participants, is that the proposed regulations for 401(k) plans w es finds that ion to 17.9% bala 52 nce ped rcent o funds 11% 4.8% f varied wi participants dely 8.4% with aroun acc ere not introduced d an 6.5% ount balanc average es of 23 of less th percent an 18.8% at Comparin 0 g1, r001–5, ecently h 000 ired participants 45.0%in 2013 17. with 2% similar age 6.1% groups 8. in 1% 1998 also il 1.4%lustrates that as 15.6% set allocation 29 6% to >$80,000–$90,000 401(k) particip 100 PlansNote: Row percentages may not add to 100 percent because of rounding. --ants’ assets we 23% re invested in e 23% 8.3 21% quity securiti 21% 23% es through equity 21% 23% funds, the eq 23% uity portion of b 23% 25% alanced 26% snapshot of Department 50s participant of Labor and B acco 47.8%unt ureau of L balanc 53.4% es a abor Stati t year-end 2 58.0% stics 0 an 13; t 58. d U.S. Depar 7% he third l 59. ooks at partic t1% ment of Labor, 64.2% ipants’ 40s Employ asset al 66.7% ee locations, incl Benefits Se 64.5% cu udin rity g Benchmarks. All 58.8 A llLincolnshire, 3.0 IL: Hewitt 2.2 Associates LLC. 1 38.8% .9 1.4 1.3 13.3% 1.3 1.0 1.147.9% 1.3 26.6 Endnotes updat The ratio o e was “ $20, f 000 participant 401(k) Plan acco Asset Allocatio unt balance to n, Account Ba salary te 8.4 ndlan s tc oes, be positively correlat and Loan Activity in 20 ed wit 12 h,” pu age a blishe nd ten d iu nre. Decemb Participan er 2013. ts in offer and 14.6 perc non–tar individual. The ed t g >arget et-da 20–30 >$40, until 1981. -date timpact of acco ent changed the asset alloc e ba 000–$60, lance fund000 s, 62 perc d fuunt consolidati nds. A tar 11% ent 10% hel g 53. etd 0% -date o tn varied with th a htion 11% em at fun of thei d year-end pur 9% s r ues a lon contribution e participant’ 6.3% 8% 2013. g-t Tar 12% ers. Hewitt A s age and g m investment et-dat 11% 27. e tenu fun 4% ssoc d a strategy, re 9% issets represen ates 2009 reported th with the current employer. The 10% usin 13.g a 3% ted 9% mix 24 of pe 8% asset at rcent of ww . w.ici.org 2014. Dist “A Look /p 40s rib df/u per tio at Pr 1 n6 o -0 ifv 3 401( ate-Sector .pdf and privat k) Plan w e, nonprof R ww. 17.1% e s, Part tirement ebri.org it, nonpar icip Pla /p an df nt Income tisan /bri s, an efspd , Washington, DC-b d A After f/E 8.3% sset BRI_I ERISA.” s, b By _0 In 11 ased organi v ICI -20 est R 1 men e 0search _N zat o3 t O 74.6% ion com 50_ p Perspective tio 40 n1k_ m s, 2013 itted exclusivel Update 20, no. 7 -09.p yd to f Equity, bond, money, and/or 10% 18% income increased. >$90,000–$100,000 The med 22% ian replacem 22% ent rate for 21% 8.20% 2 the lowest h 22% o 20% usehold lifetime earning 23% 22% 22% s quintile was 24% 6.4% 26% tenure at t>5, he 000 current employer was 45.9% eight years in 15.0%2013, the 7.7% same as i8. n7% 2012. 1.6% 16.0% Figure 3, 401(k) 42 Plan Characteri stics, by Plan Assets, 2013 ................................................................... 2008 50s .................... 7 $10, year-en 000 w d 20 ere 13 in th (Figure eir 20s or 20). For exam 30s (Figple, ure n 11 e). arly 4 Similar 3 perc ly, 6 e0 n 5. p t of 7 ercent partic of ipa pn articipants ts held no wit bah lanced f accoun unds, t bala 2. 8while nces gr 35 eater perc t eh nan t of Russell 2010 00 In 0 od re F xe . Tacoma, wer WA: F 10 r1 an to k Ru P 50 ercentage sse 0 ll C of o A mp ccany. o5 unt B 01 to ala 1,0 nce I0 nv 0ested in Non–T 1,001 arget- to 5 date B ,00 a0 lanced Funds >5,000 balanced fu funds, nds tended to be and company sto higher ck. Tw in enty- 201 e3 ight thapercent was in fixed-income sec n in 1998, rising from 8% 9 percent o urities f t such as he accou 4.1 stable-value investments, nt balances of 2% recently >3060s 45.5% 7% 50.1% 8% 10% 53.9% 8% 53.6% 7% 55. 9% 1.4 2% % 9% 60. a 7% 7% 63. 7% 9% 7% 60.6%6% analysis of Administrati Fig Plan-specific ure 34, As 401(k >$60, on reports. See discussion in note 2 se Sourc t Allocatio 000–$80, informati ) partici es: Bloom000 berg, Barc pn o an D n on loan provi ts is’ use o tribution lays Global f tar Inv of 46. es g 4 0% tor et-dat s01(k si,o Frank ns i )e, or Rus Partici s. av sel lif lailab Com e pc a pany ycle, f n 7. le for the maj t Account 1% , and Standard & Poor's 4. unds; 8 Bal and t a once to rity of th h .e 31. fourth Comp 5% e plans in th fo any Stock i cuses on e sample (including par 15. n 4 5% t01(k icipants’ 4 ) 0 1 ( k) U.S. Gover balanced funds, company stock; nment Accountability Of public fice. 1 poli 997. cy r “4e 01 search (k) Peand nsioedu n Pla cation on ns: Loan Provisions econ 3.8omic securi Enhanc ty and em e Parti ploy cipation ee b 1.6% enefi but M t issuaes y . their 50s a >$100,000–$200,000 nd 60s—havin 50s g h4 a 22% 01( d more time k) plan 20% averag 17.3% to accumulat e 19% asset alloc 18% ate io asse n, per 19% ts—tende centag 7.9% e of 18% 3.9 td to otal as have set 19% s,4.high 12007 19% e ?r ratios, 2013 74.9% 3.19% 4 while those 21% in t 23% heir 20s largest increases in average account bala All Age Group 46.0% nce occurred among older participants with >0–50 percent 16.2% 7.2% >50–90 percent 8.3% 1. fewer years of tenure. For example, 7% >90 percent 15.5% the assets of 19.6 percent classes, or asset allocation, that the plans o of participan ffering ts made such funds asset fund provid in their i transf n er ers in vestme adjusts to b their accoun nt lineu ecom ps. e t less fo balances duri cused on g ng 2008, whi rowth and cmore h was “up only f cocused on (October). Available at www.ici.org/pdf/per20-07.pdf a 77 percent; f Account Sio zer the middle quintile, the Number o median Soci f Plan al Security replacement rate was 45 percent; and for the Inves Age tment Options Offered by Plan Plans Participants Assets c All indexes are set to 100 in December 2002. $10 partici 1 0,0 p00 ants h >$200,000 wer >$80, e eld more t in 000–$100, 20s their 5 h0 000 an s 80 percent or 60s. 18% Th 15% e 39. of positive correlat 4% their 26.1% 13% Number of Plan Participants accou 13% nts in ion betwe 3. 7. 9% balanc 9% 13% eed f n 11.8% a 12% g unds at e and accoun 13% 35. the 4% ent bala d of 12% 2nce 0 62.2% 4.0% 13 12% is e (Fi 17. g xure pecte 3% 13% 32 d). At y becaus 15% ear-en e d hired pa Holden, Sarah rticipa All , Peter nts in 19 Bra 47. 98d to 6% y, and M 41 perc 52. ichael H en 7% t in a 201 dley. 59. 3 (Figur 9% 2006.e “401(k) Pla 40). 60.9% The sha ns: 63. reA of 0% 25-Yea account r R 67. balances i e 5% trospective.” 68. nvested 6%Investment Com in 66. equ 3% ity funds pany bond funds, and money funds EBRI’s member . ship includes a cross-section of pension funds; businesses; trade associations; loan activity. virtually all of and GICs Plans and/or other stable-value the sm With Co 60s 11 all plans). mpany Stock, Some pl by Partic 16.7% ans with ipant out thi Age .................................................................................. s information 7.5% are classified as h75.8% aving a loan provisio ........ 34 n if any Holden, For data on 401(k) plan asset Affect Sarah 0% Income Secur , Jack VanDer ity for hei, Luis s S , participants, ome.” Alons Letter Report, o, and Steven and plans t GAO-H hrough 2012, see Bass. 2011. EHS-98-5 “401(k (Oct U.S. Department ober). ) Plan Was Asset Allocatio hinof Labor, Employee Benefits gton, DC: n, U Account Ba .S. Govern lan ment ces, Figure had the 4, EBRI lowes Plans W t b /ICI ratios (Fi ith C401(k ompan g )ur y Da Sto e 1 tabase Repr ck 7). In addit Participant esen ion, for ts s Wide Cro any given a ss Section o ge and tfe 401(k nure combi ) Univers nation, the e ........................................... ratio of account balance ... 9 <$10,000 Less Than $10, 39% 000 39% 37% >35% $40,000–$50 36%,000 39% 39% 35% More Th37% an $100,038% 00 41% marginally” fr income over among participants in their 60s with two time. om 2007 (although, th Non–target-date balanc ey tended to m or fewer years of tenure, the aver ed funds inc ovlu e de asset larger porti alloc oage account ba ns ation or of their hybri account bal dlance increased funds, in aaddition nces). Fidelity 13 percent with the to lifestyle $10,000 0% The S&P 500 is an index of 30s 500 stocks chosen f 33.5% or market size, liquidity, and indus13.3% try group representation. 53.2% 18 Sal Equit G arry ou y Range , p bond, Zer m ooney, 1–1 and/ 0%or > balanc 10–20% ed funds >20–30% >30–40% 51,627 >40–50% >50–60% 11,387, >60–70% 080 >70–80 38 %$675, >80–90% 147,619, >9313 0–100% highest quinti >$100, le it was 32 percent. 000 See C 30.5% ongressiona Siz l e of Budget Office 2013. 8. Ac 6% count Balance 40.9% 20.0% S&P 500. New York, NY: Standard & Poor’s. funds d 0–2 labor un >2–5 ions; health car >5–10 e providers and insur >10–20 aers; government org >20–30 anizations; and service firms. >30 younger 201 The latest av 3, ne work arly 5ers are c 8 p ailable data fr All ercent likely of t 4o01(k have om the ) partici lowe 39.7% U.S r i p 14.7% a n . n comes an Department ts hel 7.3% d balan d to have of ced Labor are f fun had les 9.2% ds, th 8.2% s e time to o same as i r plan year 2 5.5% accu n 20 mulate a 2.2% 012 (see 12. 77.0% At ye bala U.S. Department ar- 15.2% nce end with 20 their 13, b 15.4% acurrent laof nced Participants Institute R 48% esearch Perspective 12, no. 2 (November). Available at www.ici.org/pdf/per12-02.pdf decreased ov $10,000–$20, er the same tim 19 40s 000 98 1999 20 32% e 00 period from 200132%2002 33.9% 65 31% 20perc 03 ent 2029% 04for 20 recent 05 30% 2006 ly hi 27% 13.5% 20 33% red partic 07 2008 31% ipants 2009 i 28% n 20 1 10998 52.6% 20 to 30% 11 36 20 12 perce 30% 2013 nt for 31% recently 12 1–100 The Russell 2000 Index meas 22. ures a 6% the performanc 9.e of 1% Holding T the 2,000 sa mrge al 5. les 4% tt- U.S. c Dateom Funds pani4. es8% (based on total 2.3% market capitalization) included in the 7.7% participant in Table of Contents the plan has an outstandin 1–25 g loan balance. This may u Yen arderstate the number of plans offering loans Security Admin Brady, and Loa Accountabi Peter, $20,000 n Acti Kimberly –istration 2014a and 2014c. For total retireme $lity 40,000 vity in Office. Bur 20 Availa h10.” a 18% m, and Sara ICI Resear ble at 17% www. h Holden. ch gao 13% Perspectiv .gov/archiv Siz 2012. 19% e of ent a 17, n Ac The e/ c ssets (including those in 4 20% 1 ount Balanc Su 998 o. 10 ccess /he , an 19% 98 of the 0 d e 0EBRI Issue 5.pdf 24% U.S. Re22% tirement 01(k) plans) through the third Brief, no 25% Syste . 366 (De m25% (D ce ecem mbe 21% r) ber . ) . to salary varies somewhat Asset Allocation by Investment Opti with salary. c For exampl ons an e, amo d Age n,g Salary, an participantsd Plan in their Size 20s, the ratio tends to increase slightly consolidatio 2 S0 ource: T sn of their multiple acco Of w82.3 h abul ich: ati tons from arget 1.7 -dat Ee BR funds I/IC unts. 1.3 I Pa are rti Among participants cipant-D an opt 1.1 irected R ion e0.6 tiremS ea nt P in their 50s or 60s with more than 30 lary lan D Ra 0.6n ag ta C e ollecti 0.9 on Project.0.5 0.4 years 0.4 of tenure, the 10.2 Investmen funds. ? Mo Core 4 tm s p 2008 reported that ov a 0n 1y st (k) plan partic ock is equity ip in ants held equ erall the only 6.6 perc plan’s spo ities at y nsor (the em 36, ent of 857 ear-end 2 parti ployer cipants in th 01 ). 3M than befo 8,o 086, ne754 yeir fund recordkeepin re the financial mark s consist of $478, g system made t 704, hose fu 125,688 nds et crisis designed Year-end 2013 Snapshot of 401(k) Participants’ Account B 1–100 50s 101–250 251–500 32.8% 501–1,000 1,001–2,500 2,501–5,000 13.5% 5,001–10,000 alances > 53.6% 10,000 All Plans Figure Plans Without Company Stock, and GICs, 35, >$20, Ma 000–$30, ny Rec 000ently Hired 28%401(k 28% ) and/or Other Stable-Value Funds Plan Partic 28% ipants 25% Hold 26% Balanced Funds 29% 27% ................................................... 25% 27% 26% 27% ...... 34 Russell 3000 Index (which tracks the 3,000 largest U.S. companies). Percentage of Figure 5, 401(k) participants Participants Represent a Range of Ages Y ....................................................................... ears of Tenure 40s ................. 10 >$40,000–$60,000 101–500 20% 33.9% 23% 21% 17.7% 26% 5.1% 28% 27% 8.8% 30%4.7% 26% 24. 26% 2% 28% 10.8%27% fund use by employer. Labor, Employee Benefits In participants addition, th occ ey a Security Admi urrred throu e less likely t ghnistration 201 target-date fu o have rollove4c). nd rs from a s an d non–t previous employer’s plan arget-date balanced fu innds: their a 41 current percent o planf 401(k) hired participants in 2013. Company stock 26–100 also declined fo 27.0% r the two groups of recently hired participants, from 9 29 Source: Tabulations 44%48.9% from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. (or particip A Nge Group ote: R ants eligible for ow60s percentages maloan y not add to 100 percent because of ro s) because som 32.1% e plans ma undiny have g. "Equi12.8% ty funds” i offered a plan loan, but n nclude mutual funds, bank 55.1% colo le participant had ctive 13 taken quarter of 201 Introductio Available 3 Sour 0s n .................................................................................................................. c at e: 4, see Investm d Tabulations 82.0 www.ici.or fr2006 om 3.3 EBRI/ICI Par g/ ent Company I pdf/per 2.4 2007 tic1 ipant- 7-1 Dir 0 Percentage of Account Balance Invested in Target-Date Funds n ec .p 1 stitute 2014. For .8 ted df and Retir 2008 em Num ww ent 1.0 ber of Plan Data w.e Part 2009 ba discussion of trends bet ri. icipant 0 Collec o .8rg/tion s in pdf Plan Pr/2010 oj b 0.7 ec rie t.fspdf/EBRI 0.5 2011 w _een defined b IB_ 012- .5........................................ 5 20 2012 11_No 0e .4 nefit (DB) and 366_ 2013 40 6.71(k)- with sala Age Group Washin Equit >ry for $30, y,gton, 000–$40, bond, low-to-mo DC: Investme m 000 oney, and/ derate salary or 23% balanc nt Compa ed 24% gro funds ny I ups , 25% nstitute. Avail (Figure 18). 22% a How ble 23% at ever, ww 26% at high salary w.ici.org/ 25% pdf/ le ppr 23% vels the _12_succes 24% ratio t s_e r24% e nds to tirement. declin 24%pdf e 2007 2008 2009 2010 2011 2012 2013 to maintain exchanges du U.S. De average account balance incr The ratio of partm Source: a e stable shar ring September, October, nt of Form 401(k) acc Tabulations erl Labor, y the Lehm from EBR e o price. Sta an Brothers Bureau eased 5 percent wi uI/IC nt balanc I Participant-D of U.S. Aggregate Bond Index b Lab lee (at the current -va irect oand November lue ed r Statistics. 2 Retirement th the consolidati products, Plan D , the Barc ata C 012. such as employer) to 2008, a time of stock ma lollection ay sNat Capi on of their multiple a Project. iguar tal onal Compensation U.S. Aggregate Bond Index anteed in salary alone i ves ccounts. Future joint research with this itSurv srment co c s kom not an indic et pos ey: volatility. Furthermore, Choi ed of Empl sntr ecuria oyee B tiects (GI s ator of ene Cfits s) in and >$60,000–$80,000 (year-end 2 501–1, Source: 000 Tabulations 007 f) r, and mo om EBRI/ICI Par 18% 41. st 2% 23% t had the maj icipant-Direc 20% 16. ted 7% Retir o Num em rity 24% ent Plan berof their of5. Par Data Collec 8% 24% ticipant accounts invested in e s in tion 24% Plan Pr 9.oj 7% ect. 26%6.1% 23%quities. 22% For exam 25% 16.ple, almost 6%22% Note: The analysis includes 401(k) plan participants EBRI’s work advances knowledge and unders with two or fewer years of tenure in the year indicated and in a tanding of emplo plan offering company stock as yee benefits and their an Asset allocatio 100 $0n also vari All es with participant age; 31.0% Figure 23 demonstra 12.9% tes this with an analysis o 56.1%f asset allocation by Holden, Sarah Note: Per , and Da bcentages m niel ay not add to 100 per Schrass. 20 c14. ent bec “De ause of fine rounding. d Cont Tribution he tenure var Pla iable nis P gener articipants’ Ac ally years working at c tivities, 2 urrent em 013. ployer ” I , and CI R thus esearch Report trusts, life insurance separate accounts, and any pooled investment product primarily invested in equities. The tenure variable is partici accounts. pants h Note: At eld target year-end 2013, -dat the av e funds, erage account 18 101–2, balance percent h among 500 all 26.4 million eld non– 401(k) particiants target-dat e was balanced fun $72,383; the median d account s, and 2 percent balance was $18,433. held both. Target- U.S. Interna Sour >$40, ce: 000–$50, l Revenu Tabulations 000e S frome EBRI/ICI Par rvice. 1981. “Not 22% ticipant- 21% Direcice of Pro ted 22% Retirement Plan p20% osed Data Collec Rule Making, Certain 21%tion Proj 24% ect. 22% Cash 30 or Defer 20% 21% red Arrangem 21% ents 21% Under perce 20s n t of and 40 4 Note: T s GI inv 0Cs 1 estment c( ok) account he v 81.2 e and/ ritenur ng gov option. or e var ernm other i3 able ent and c .9 ba sis table lances i gener orporate bonds value 3.0 ally yn ear 32.1% 1 funds s9 w9 , m or8 2 ko ing at c to 3 .2 rtgage-bac 43.2% p urre ent krcent ed s 1.2 em 43% eploy cu i riti er n es , 2 , and as and 013. 0.9 thus 10.1% s e m t-bac ay over ked s 0.8 se tate curiy tiear es 5.9% (rebal s0 of .5 par anc tic ed m ipation 2.7% onthl 0.4 in the y by m 401( arket k0 ) plan. .4 5.5 Figure 36, Ma 20sny Rec Age Group ently Hi 29.4%red 14 4031. 1(k 7% ) >0–50 percent About the EBRI/ICI Database Plan Partic 46.5% ipants 19, Hold Target-Date 48. 200 5% >50–90 percent 52.0%5, Fun 896, d114 s 53. ..................................................... 35 6% >90 percent 52. $405, 0% 545,092, 51.819 4% out a lo>$80,000–$100,000 an. It is likely that this omi 17% ssi 21% on is sm 17%all, as 22% U.S. Government Accountabi 21% 20% 23% lity Office 1997 found that 20% 19% 21% 19% more Figure 6, 401(k) defined contribution (DC) plans, see Update. 1,Sour 001–5, pdfc e: Part T 000 abulations icipa fn rom ts EBRI/ICI Par Represent 41. Poterba, Venti, and Wis 3% ticipant- a Range of Job Direc 15. ted 7% Retirement Tenur Plan Data e 2007; Holden, Br 5.1%es Collec ................................................................ 2009 tion 9. Pr 3% oject. ady, and Hadley 2006; Br 5.5% ady an 17.d Bogdan 2010 0% ............. 10 somewhat. A 19 may Sour over similar patt cs e: tate y Tabulations ears of ern par from tic occurs amon iEBRI/ICI Par pation in the 401( ticipant- k)g plan. Dir partici ected Retir pants ement in th Plan Data eir Collec 60s t(Fi ion g Prure 19). oject. preparedness for retiremen Factors That Affect 401(k) feature will explore the longitu 1996 td, nor i inal aspect 1999 Participants’ Account Balances importance to s it the only measur s of this consolidation in more detail. 2002 the nation’s econo 2007 e that c my a n be used to judg among policy 2008 m2010 akers, e retirement r the news 2012 media, and eadiness 2013 the public. It or savings et al. 2001 f other s Private I two-thirds of participants in their 20s Note: T table-v n he odust und that 401(k) participants rarely m tenur alue e var ry in t f iable unds, his e Un generite ally are reported d y Stat ears wor es, Marc king at c had as one cat urrh 2 ent mo em 012. re than 80 pe ploy ade er eWashi go , and changes ry. The thus n gton, m rcent of their 401(k) ay other over after the initial p DC: U. state category yearS. Department s of partic is th ipation accounts invested in eq oint of enr e resi in the of La 401( dual k)bor, B plan. o for llment. (F other i ureau o uities at year- n or vestments, f Labor About the EBRI/ICI >$50,000–$60, capital000 izati Databas on). The index e 19% ................................................................................................... 's total return c a 19%onsists of 20% price apprec 18% iation/deprec 19% iation plus i 21% ncome as a perc 21% entage of 19% the original 19% investm .............................. 5 ent. 19% 19% investment o For an an general aly ptions and also lys yis ears w of the ch orking at current em anges in accou by participant ployer, and thus m age. nt balances Because ay overst of ate y asset allocatio consi ears of parti stencti participants in pati n is i on in the 401(k nfluence ) pl d by t the an. Sal h EBRI/ICI 401(k) ary e invest informati ment o on is ptions database (April 30s ). Available at www.ici.org/pdf 47.3% 2,5/p 01–10,000 pr_13_r 27.3% ec_survey.pdf 7.8% 8.3% 3.6% >$100,000 14% 16% 13% 16% 14% 14% 16% 14% 14% 16% 15% Of w Age Group hich: target-date funds are an >0–50 percent option >50–90 percent >90 percent date fund 5 0use s varies wit 80.9 20s h 4 .1 participant 3.1 age a 8.3% 2 n.5 d tenure. Yo 1.4 13, unger 6191.0 partici 7.0% p0.8 ants wer 3,887,e 636 0 mor .5 e likel 0.484.7% y to $267, hold target 0912, .4 680,944 -date 4.8 funds Bright Employee Plans.” Scope >5, a 000 nd Investment Federa Company l Regis 35.t4% er Inst 46, no. 217 itute. 18.1% 201 (Novem 4. The Br 4.b 7% er ight 10): Scope/ICI 55 8. 51% 44–55 De 54 fine 6. 9. 6% d Contribution Plan Pro 19.f0% ile: A Close 30s 28.5% 35.1% 43.5% 47.3% 47.8% 52.1% 54.3% 53.3% than 95 percent of 401(k) plans th does this b at offer loan y conducting s had at least and publishing policy re one plan participan search, analysis, t with an outstanding loan. and special reports on 15 and 2014; >$60, and 000–$70, Brady, Burham, and Holden 2012. 000 16% 17% 18% 16% 17% 19% 19% 17% 18% 17% 17% 50s What we do 40s available for a subset of participants in53.1% the EBRI/ICI 401(k 19.1% ) database. 7.1% 9.9% 4.5% such as real adequacy (see Brady, Burh household su Statistics. Available Source: Tabul estate fun rvey results fr ations 20s from EB d at Rs. I/ICThe ww I Pa om fall 2013 am, rtiw. cfinal ipant bls and Hold -Di category, .gov/ncs rected Retreflecting hou ien 2012). A c rem 20.4% /e ent unk b P s/ lan Dat ben nown e a Col fits lec , consists of s o /2 ehol tmple ion P 01r2 ojd /e ec te st’ senti bb . anal 13.3% l00 assets that co 50. ysis ment toward pd of prepar f uld edness for retirement would and confiden not be 66.3% identifie ce in 401(k) d. plans, end 2013, up from less than half of participants in their 20s at year-end 2007. Overall, 90 percent of 401(k) Figure 37, Recently Hired 401(k) Participa >10,000 nts Hold High Concentrations in Balanced Funds ....................................... 36 Account in the wak availabl 80 e balan to pa Ae ll of the financial crticipants, Fi e and tenure gure 24 presen crisis (over the five-year pe are also 36.9% positits vely correlat asset 17.9%alloca ed tion by amon 4. riod from year-end 2007 to year 8% salary g parti8. c range an ipants 4% ind 6. th by i 5% e 2013 database. nvestment o -end 2 pt012), see Hol ions. Salary A partici 18.8%pant’s den et Figure 7, Dom In additio In anyE given y quit 6n 0y to s 177.7 , bond, devotin e estic ar, the cha 82.2 30s 0.10847271 mStock oney, g a gr 3 and/ a .6 n neater share of t ge in d Bo or 10.8472714 balanc a nd Mark 2.7 partici ed funds et 11.5% pant’s accou 2 Indexes h .3 ,eir assets to .............................................................................. 1.3nt balanc balanc 1.0e is t ed fu 8.0% hnds, recently e 0.8 sum of th 0.5 ree factors: hired partici 0.480.4% 23.0% pant 0s .4 also have ................. 12 4.8 become 10 >$70,000–$80,000 16% 15% 16% 15% 16% 18% 17% 16% 16% 16% 16% than ol EBRI/ICI der 401(k) Data participants. At base y ...................................................................................................... ear-end 2013, employee benef 52 percent its issues; holding educational br of participants in their 20s h iefings for EBRI memb eld target-date funds, com ................................ 5 ers, congressional and pared with . 201 40s 2. “430s 01(k) Pla 27.4% n Asset Allocatio 34.2% n 27.8% , Account 41.8% Bala 45. nces, an 5% d Lo 13.9% 45. an Activity i 3% 49. n5% 2011.” 58.3% ICI Res 51.9% earch Perspec 50.7% tive Look at 40 50s Note: The tenure v 1(k ari )abl Pe i lans. s general Sa lyn D yearsi worki ego, CA: ng at 49.0% current Bri em ghtScope ploy 17.2% er, and t an hus m d ayWashin overst7.5% ate ygton, ears of part DC: Investme icipat 13.0% ion in the 401(k) pl 6.6% nt Compa an. ny Institute. Available at The This EBRI system /ICI Participa of classific nt-Dir ati eo cted Retir n does not c emeo nt P nsider th lan Data e n Collect umber of disti ion Project is the la nct investment option rgest, most repr s presentative esented to repository a given c 23.5% 23 require estimating projected balances at retirement by also considering retirement income from Social Security, see Burham Holden, Sarah participants ha >$80,000–$90, , Bogdan, , and Jack 000 d at least some invest and Schrass 2014 VanD 14% erhei. 2001a 14% a.) ment in . “401(k) Pla 15% equities at year 14%n Asse 14% t Allocatio -end 2013. 16%n, Account 16% Bal 15% ances, an 15%d Loan Activity i 15% 14%n 1999.” and Pl Alan lcom s W pany ith 81.6 40s 40s Cs otmp ockan 3y .5 Stock an 2.6 d GICs /13.2% S2 t28.8% a .0 ble-Value 1.1 Funds 1,073 0.9 7.6% 13.9% 0.8 4,841,913 0.5 0.479.2% 57.4% $362, 0256, .4 152,200 6.1 tenure wit al. 2014 information 2 43 . h169.9 a is navailabl employ 0.10371139 e for er ser av subset o 10.3711391 es as a proxy f part for t icipants he len in t gh th e 20 of tim 13 EBRI e a wor /ICk I 40 er has 1(k)partici database. Partici pated in the 401(k pant asset allocati ) plan. Indeed, on U.S. Joint Committee on Taxation. federal agen 2006. Techn cy s ical E taff, and th xplanatio e news n omedia; f H.R. 4, th and sponsoring public opinion survey e “Pension Protection Act of 2006” s on emplo asy ee more like 60s ly to hold these diversified in 42.6% vestment o 16.4% ptions. At year- 7.6% end 2013, 616.5% 6 percent of 9.6% recently hired 401(k) $70,000 35 For a complete time series of the percentag percent o 50s f participants i 28.1% n their 6 34. 0s (Fi 9% gure e of eligible 401( 42. 322% ). Recently 45. hir k) participants with outstandin 2%ed part 45. icipants 0% wer 49. e 2% more like g 401(k) loans and loan amo 51. ly to 8% hold ta 49. rget 6%-date unts Prior to 2005, ww 18, w.ici.org/pdf/ppr_1 no. 9, an the U.S. Department of Labo d EBRI Issue 4_d Br cpief lan, a_no. 3 profile 8r private pension plan b 0 _4 (D 01k.pdf ecember). Available ulletins reported a at www.ici.org/count of active 40 pdf/per18-09.pdf1(k) plan participants and Figure Year-End 2013 Snapshot of 401(k) 38, Many Recently Hired 401(k) Participants Participants’ Asset Allocation Hold High Concentrations in Target-Date Funds .......................... 37 participant, b >$90,000–$100, ut rather th 50s000 e types of 13% 13% options presented 28.7% 13% 13% . Preliminary research an 13% 13.7% 15% 15% aly 14% zing 1.4 million participants 57.6% 14% 14% 13% Figure of in Sources and formation . 8, 201 Perc 3.ent Ch about Natio Types of Data c n ange i in al dividual 401(k) pla Compensation n Total R ..................................................................................................... eturn Sur I n vn part ey: Employee dexes icipa .................................................................................................. 12 nt accounts Benefits . As in t of h Dec e Unite ember d State 31, 20 s, March 2 13, the EB 013RI/ICI ............................. 5 Was data hington, bas e DC: Sour 1–100 c Of e: T wabul hich: ati tons arget fr-dat om E e BfR unds I/IC 35. I P 4% a are rtican ipant- opt D 18. ion irec 1% ted Retireme 7. nt P 4% lan Data C6. oll5% ection Projec 4.0% t 14.2% 6.1% 50s 13.1% 756 7.1% 3,714,710 79.8% $267,076,596,982 defined benef Investment Co ? New contr it plans, IRAs, and other D ibuti mpany I ons by th nstitut e par e Pers benefit issues. ticipant, pective C plans, p the employer, or 7, EBRI’s Ed no. 1 (Jan ossib uc ly ation and Re u from previous empl ary), both; and E seB ar Rc I Issue Br h Fund oym (EBRI-ERF) performs ief, ent (for e no. 230 (Febr xample, se uthe char ary). e VanD Avai itable labl erhei , e Plans With GICs and/or Other Stable-Value Funds 86.2 0.05261873 5.26187279 also varies 61 60percent o wit f partici h pl 60s an si pants ze (Fi wig th account ure 25, top pane bala 29.4% nces of l), but much of the variation less than $10,00 13.3% 0 had five or can be f e ex w plained er years o 57.3% by dif f tefn ere ure, nce whil s in the e partici Passed pants h >$100, by the 000–$200, eld bala House on J 000 nced funds, com 10% uly 28, 2 9% p006, ared an with 10% d as Consid 29 per 9% cen ere t at 10% d year by the -e 11% Se nd nat 1998 e11% on (Fig Aug ure 3 10% ust 3, 5). 20 Over t 11% 06. JCX- he same 10% 38-06 time (A 10% ugust perio 3 d, ). 60s 26.1% 32.1% 38.4% 41.0% 41.7% 46.5% 48.8% 45.5% funds 33 as a percentag than a those with e of the remain more years on ing 401(k) the job: at y account balance, s ear-end 20 ee Holden et al. 2013. 13, 51 percent of participants with two or fewer years of that had bee ww ? w.ebr Sevent 101–500 n i.org adjusted from the number y-one p /pdf/b eriefs rcent pd of f/E 401(k 34. BRI_IB 8% of a )_1 pl2- cans i tive participants 22. 2012 5% ncl _No ud3 ed F 8i0 gure t .40 6. a actually reported in the Form 5500 filings 4% rg 1et-d k-eoy2 49ate f 01 5.5% 1.p und ds in t f 2.h 9% eir investment 11.7% lito exclude: (1) neup 5. 8% at year-end 20 FiFigure 31 gure 28 The analysis includes the 26.4 million participants in the year-end 2013 EBRI/ICI 401(k) database. drawn from the 2000 EBRI inclu For the ag U.S. Departm ded statistical in 20s Equity, bond, e distribution 60s e mnt of Labor, oney, formati and/of o /ICI 401(k) datab or n abo 401(k) plan balanc Bureau educa ut: ed 38.2% fof Labor Statistics. A tiona unds 12.6% particip l, and , a30.6% se sugg scientif ants and assets at y ic func ests th Median vailable at ti12.4% ons of the Instit at the 6.3% sheer number ear-end 2013, see Figure 5 6.7% 2013 EBR ute. EBRI of investm -ERF 0.8% I/ICI is a tax-ex 81.1%en 5.1% t option empt organizatio . s presented n At year- Source: end 2 Tabulations from 013, All 44 perce EBR nI/IC t of I Participant-D 401(k) plir an pa ect 25.9% ed R rticip etirem ant ent Plan D Figure 47 Figure 15 s’ account ata Co ba llection 13.6% lances w Project.ere invested in 60.5% equity funds, on average, Figure 8 2014). For ref Because of these ch Investment O >$200,000erences to ptions ............................................................................................................ anges in the cross other such research, 5% About Changes in Account Balances 5% secti 5% o see ns, com Ma 4%Figure 45 cD ponald and ar5% ing averag 5% Moore 2011 e accou 5% nt bal an 5% d Holden and ances acr 5% o............................... 6 ss VanDerh different year 5% 4% ei 2005. -end at www.ici.org/pdf/per07-01.pdf and www.ebri.org/pdf/bri 23% efspdf/0201ib.pdf Figure 39, Asset Allocatio 271.3 0.16560859 n Di16.5608595 stribution of 401(k) Account Figure 17 Figure 19 Balance to Balanced Funds Among Recently Hired investment o 74 percent ofp partici tions offered pants wi by plan th account b sponsor balasnces gr . For exampl eater e, than the percent $100,000 a had ge o more f plan tha assets invested i n 10 years of t ne compa nure (Fi ny st gure ock Figure Washin 9, S501–1, ngton, apshot of Year-E 000 DC: U.S. Joinnd 401(k t Committee 36.0% ) Acco o unt n 16. Ta Ba 6% xation. lances Figure 11 Availabl ........................................................................ 7.4% e at www 5.2%.jct.go 2. v/ 3% x-38-06.p 11. df8% 12.8% ............... 13 recently Burham, K hire b iA mberly, Micha ld l 401(k) pa 28. 27.4% rticipants have e 3% l Bogdan, 33. an 8% bec d Daoniel me less lik 43. Schrass. 6% ely 201 46. to hol 6% 4a. d Ame com r 47. ic pans’ V any stock (Fi 6% iews 51. on 2% gure Defi41 ned Contri ) an 52.3% d less likely to bution 51.1% Planhol Sad vings. Note: Components do not add to 100 percent because of 401 rounding. (k) Loan Bala 2010 nces tenure 30s he and 201 R ld ta oc w 3. om per At rget-date pany centag year-end 2013, 15 p stoc es k fu m , and ands, compare y not GICs add to 10 and/ Exposure to Equities Has Increased A e47.7% rcent of the a o 0 per rd with cent bec 41 23.5% perce assets in the EBRI/I use ofn (mid-point) rt of oun p dinartic g.7.9% ipa CI 401(k) database were i nts with7.1% more mong than 1.2% five to nvested in targ 10 years of ten 7.3% et-date funds ure, and individuals eligible to participa All te in a supported b 401(k) 11.2% plan who had y contributions not elected to and grants. 7.3% have their employers make contributions; an 81.3% d (2) Salary RaP nge ercentage of 401(k) Plan Participants Without Equity Fund Balances does not influence particip Few ants. On 401(k) Participants Had 401(k) A averccou age, p na t rticipants Balances Greater Outstanding have 10.4 distinct opti Than $100,000, 401(k) Loans; ons but, on average, choose only compare ww ? w.bls.gov Total i d with n 3 vestment ret 9 /ncs/ebs percent a /be u t year- nef rn on its/20 Percentage end account 1 2 3/0eb 12, bl balan 0 37 052. of pe ces, whic Eligible pd rcent f at year h 401(k) depen -end dPlan Participants s on 2008, the an performa d 48 percent nce o at year f financia -en l mar d 200 kets and on 7 (Figure 24 Percent Change in Total Return Indexes cros 44 s-section 1,001–5, a Ratio of 401(k) l sn 000 apshots can lead t Accou 39.Ratio of 401(k) 8% o n fa t Balance lse con 14.7% clusi to Salary A on ccou s. F 5.8% o n r exampl t for Participants Balance 5.e, newly f 5%to Salary 1. in Their 60s, o 9% rm , ed plans woul 12.7% by Tenure d tend to pull 10.2% down For an analy c $60, 933.1 40 s 000 isAge Group of th 0.56958857 e possib 56.9588573 le impact of >0–50 percent automatic increases in par >50–90 percent ticipants’ contribution rat >90 percentes in automatic About C h401(k) Partic anges in Account Balances A ipants, by ge Composition Partic ............................................................................................. ipantof Selected 401(k) Age ....................................................................................... Account Balance Categories ........................... 6 .............. 38 40s 51.6% 17.0% 6.9% 7.4% 1.6% 9.6% rises with 34 12). 40 The percenta $20, A pl tar 000–40, an A get date f size, v ge e 000 r of 401(k) participants with 401(k) loans outs agin e and und ty part, pi m ca because few small plans o 17% lle y r debal ian anc loan 19% es i b ts a por lances 18% tfolio to bec for 18% ffere 4 om 01( e ld com etanding acros s k 17% s) f pa ocp urtic any sed on gr 21% ip stock as an i ants s all participants oww 19% th and m ith 401( n ov 17% reestment opti f ko ) both with an cloa used on n 17% s, 1 in998 con. For om 17% d without 401(k) e–20 as i example, less t13 16% equity Washin fu . 201 nds. gton, 3. “4 Recently 01 DC: Investme (k) Pla hir ned 40 Asset Allocatio nt Compa 1(k) partici ny I n, Account pn ants also t stitute Bal (Janu en ad nces, an ary). Availa not to d Lo hold ble an Activity i a hi at gh concen n 201 tration of 2” ICI Res thee irarch Perspec account bala tive nces in 19, other stable value funds Holding Non- 776 Target-Date Funds 4,296,253 $469,513,431,701 25 percent of participants with more 401(k) Participants Betw than 30 years of tenure (Figure een 2007 and 2013 33). 31 nonvested for ? See note 11 fo 26.4 and 41 perce millio mer employees who had not (at the time the n r additional detail on target date funds. 20s 401(k nt of 401(k) participants in ) plan participants, i 14.8% n the database held ta Form 5500 filings were subm rget-date funds 10.0% . itted) incurred the break in se 75.2% rvice 50 Loans T by ended to Participant Be Small, Age and Selected Tenure Years >5,000 39.8% With 401(k) Plan Loans, 6.1% 9.6% by Plan Size, 5.5% 2013 2.2% 15.6% 16.2% Figure 2.5 (Holden and VanDerh . 10, the al 200 Dist 1location bribution of 401(k . “W Thho H e Im of assets in pac ae v ti 2001b). In addition, the p of Em e Equ ) Account an ployer individu ity E -Balances, S xelecte po al’s ac sur d I count; an e by n, ves by Sitr ze o ment O elim Pa d f Account r inary an tic ptions ipan Balance alysi on t A 401 s ge found that 401(k) p (k o ................................................ ) P r T lae n Partic nureipants , 201 a’3 rticipants Asset Allocati are ....... 14 ons not : 20). Altogethe 50s r, equity securities—equ aPercentage of Account Balance Invested in Non-Target-Date Balanced Funds 46.3% ity funds, th by Participant 14.8% e Percentage, 2013 equity portion Age 7.0% and of balance Tenure8.7% d funds, 1.8% and company 15.9% stock— >$40,000–$60,000 17% 16% 16% 16% 15% 19% 17% 15% 47.2% 16% 15% 13% the aver enrollment pl appr age account bal oac ans, see Van hes a Percentage nd passa enc sD the tar erhei and C e, but would tell us nothin of participants w get da 41 te of o th peland 2008 e fundi, w th h account ich ; VanDerh isg ab usual balances out c ly ince lu oi 2 ded i nsi 010; and Van s n in specified ranges, 2013 tently p the fund’s a nam rtici D e. perhei and L ating worker ucas 2010 s. Simila. F rly, the or a Utkus, Steph When analyzienn P., a g the cha nd Jean nge i A. You n participa ng. 20 nt a 10. ccount Resilie balanc nce in Vo es over tim latile Mar e, i ktets: 40 is importa 1(k)n P t articipant to have a cons Behavior Se istent sampl ptember e. Of wh 30s ich: target-date funds are an opt 21.2% ion 11.3% 67.5% plan loan acces than 1 percen Age Group t of s was similar in earlier partici 2006 pants in small 2007 years. For example, in 2012, this m plans (100 part 2008 icip 520 an 2009 ts or fewer a, b 2010 e)asure were 1,800, was 18 of 670 fere 2011 dpercent; in 201 company 2012 $223, stock as an 607, 1, 18 percent; in 143, 2013 817 investment no. 12, and EBRI Issue Brief, no. 394 (December). Availab 44.2% le at www.ici.org/pdf/per19-12.pdf and company stock (Figures 42 www.ici.org/pdf/ppr_14and _dc_ 43) plan EBRI Issue Briefs . _saving. pdf is a monthly periodical with in-depth evaluation of employee benefit issues Distributio Alln of Plans, Participan39. ts, and As 7% sets by Plan S 7.3%ab i9. ze 2% .................................................................. 5.5% 2.2% 15.2% 15................... 6 4% 60s . 2014. National Per Compensation centage of 401( Percentage of 39.0% Sur k) par vey: Employee ticipants by 13.6% participants age of Ben participant, ew fits 6.8% ith account in t y he Unite ear-end 2007 and y balances c 9.3% d States, March 2 2.0% ear-end 2013 0124.6% 4. Washington, DC: period establis Figure 40, >$60, Average Asset 000–$80, hed by their pl 000 Allan (see U.S. Department of Labo o 15% cation of 401(k) Accounts, 13% 14% 13% by Part r, Employe 12%icipan 17% e t Age Benefits Secu Amon 14% g 4 rity Administration 2012a for f 01(k 13% ) Plan 13% Participants Wit 13% 11%hu Two rther or c 40s 22.7% S&P 500 Russell 2000 10.7% Barclay's 66.6% naive—that i 400% s, when given Age Group n option Ps, they do not divid er >0–50 percent centage of eligible Percentage, 2013 401(k) pae their assets among all rticipants >50–90 percent with outstanding 401(k) loansn. Indeed, less than 1 percent of 38.8 >90 percent represented 66 percent Prelimin 100% ary Findings.” Worki of 401(k) n g paper prepared for plan Averag par e ticipants’ assets at year Median the Center $ -en 7,495 for dPensi 2013 (Fi on an gure d Re 21). tirement R esearch (C $7,421 PRR) Current Note: "Funds" include mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investment product Examinin aggregate 35 ?All A maj g th av eerage ac o interact rity of new icoun on o or recent ft balance both age hi an would tend to b res i d P tenure en rc vested entag wit e of h t ac h e Figure 43 P ei pu a count r 401(k rtilled down if a large n cipabalanc nts) asset With eou s reveals that, s t E in qui bal ty F au u nced nmber of participants retired. ds for a funds, i given n age gro cludingu targ p, avera et-dg at e e discus 200 sion 7–Decem of the variety 40 ber 2009of . V factor alley Forge, PA: s (e.g., taxe Ths e , s Vanguard aving 72, s676 , m Group, ortgages, children) that impact replacement rates, see Vangu 26, ard C 421, $7 e 360 nter ,346 for Retir $1, ement 912,462, Re 296, search 032 (March). Comparing average account balances acro and trends ss different , as well as year-en critic $7al ,292 d anal snap yses shots can lead to false of emplocyee benefit polici conclu es and pro sions. For posals exa . EBRI mple, > Sour $80, 20s ce: 000–$100, Tabulat 000 ions f22. rom 5% EBR 14% I/ICI Pa 21. rtic 12% 8% ipant-Direct 12% ed Ret 19.3% irem11% ent Plan Dat 17.7% 11% a Collection Pr 14% 19.0% oject. 12% 19.5% 11% 19. 12% 8% 11%17.1%10% option, Figure 2010, 18 percent; in 2009, 19 ? 20 For an an 72,6 11, whil 7 Age 6e emplo aly 53 Composition sis tr 50s perc yer-sponsore acking target date fun ent of partici of Se percent; in 20 d 40 lecte pants i 1(k d )40 n plans, greater than $100,000 at pla 08, 16 perc 1(k 22.4% d Per use and n )s wit Accou centage of holdin h m ent; in 2007, 16 pe n g Figure 6 ac t th Figure 13 o cBalance re ount e persistence than balanc 5, Cate e inves year-end 000 participants 10.1% gories ted rcent; and in 2 in of their use fr equities 2013 ............................................................. 14 were 006, 15 percen om 2007 throu offered c 67.5% ompany stock t. gh 2009, see as an Plans With Company Stock http:/ Our /www.ebri.org/pdf/briefspdf/EBRI_IB_012-13.No394.401k-Upda $7,1 te-2 91 012.pdf Distribution of 401(k) Participants’ Company St 300% ock Allocations 8% a $7,153 detail). This change in metho Relationship o U.S. Departm ? With Fewer drawa Years o f20s EBRI elnt of Labor, s, borrowi f/ICI Tenur 401(k) Data dology results ng, an e Bureau ......................................................................................................... d Loa loa nof Labor Statistics. A base a n s25.3% in a dramatic in a repaym pePlans to t rcentage ents. of the r he U ecrease in the n mainiverse o ni vnailable at g 401(k11.6% ) ac f All cou unmber of t ba 401(k) Pla lance individuals reported as active participants ns ............................................ 63.2% ................... 39 .... 8 a $50,000 9% 32.4 primarily invested in21. the s 4% ecurity indicated. 11% $7,027 participants f Pension Of Policy o w llowed Asset Allocation Distribution of Recently Hired 401(k) Participant Account Balance h 60s ic Issues Conf h: taa 1/ rget-dat n asset e fer unds ence, allocati are at Miami an on str opt 22.3% ion University, Ox ategy. Deloitte/ICI ford, OH, 9.2% Defined Contri June 8–9, 200 bution/401(k) Fee Study 20 1. 68.5% 11 >$100, Minor 000 investment options are not 14% shown;T 10%a therrget efor-d e,a 10% rtowe percentNon 9% ages w- 51,tar752g ill net- o 9% td add tateo 100 per 11%Co cent 17,mp.489,an Per 10%yc C 770 entages ar 9% e dollar$1, -9% wom ei 237, ghtbin ed av 300,atio 9% ern 547, ages.of 431 7% 1638.2 Notes is a monthly periodical providing current information on a variety of employee benefit account Brady 2010. 20sfunds. balanFor an c For e es ten x alysi ample, at year-end 2013, nearl d tos in of the impact >80 crease percent with t 24.7% >60 te o of changes in 8 nure. 0 perc $6 en,946 For t38.5% yexa two-thirds of >40 tom So 60ple, pecial Sec rc t enh t e 8.5% re aver >u cently hired participants held balanced f 20 t rity on retirem oage 40 peraccount cent3.5%1 t balance of o 20 ent patterns, perc 2.0% ent parti Zero see Gu cipants i stman unds in their n thei 14.3% and r 60s the a Available ddit . 10201 i0% on o 30s 4 at b f a lar . “Own $6 g,e 8 ers num 56 22. hip 5% ber of of Mu ne tual 22.w 2% Fu plan nds with s, Shar 18.8% smaller eholder Sentiment, 16. balanc 4% es to th 16. and 9% e data Usebase of17. th wo 6% e Inte uld t rnet, e16. nd 20 to 9%14.” pull do IC 15. I R wn t 9% ese he araverage ch $6 1.8% ,815 401(k) Participants Represent a $6,8 7% 39 $6,821 Range of Job Tenures $6,846 17% 7% investment option in 2013. Thus, to analyze the potential effect of plan size, the remaining panels of Figure 25 group Copeland 201 b 1. For an an All alysis of target date fund use among defa 19.7% 10.5%ulted and non-defaulted 401 69.8% (k) plan 21 $6,717 30s 35.2% 11.1% 50s 53.8% 2012 Form 5500 Sour 350% ce: T 90abul % ations 30 from EBR 401(k) Account Balances Increase With Participant Age and Tenure I/ICI Participant-Directed Retirement Pl 27.2 an Data Collection Project. www.bls.gov A target-dat/e f ncs/ebs und typical /be ly rnef ebalances i its/20 $6,659 ts por 14/teb 26.5 folio t blo becom 0055.pd e less f f 26.9 ocused on growth and more focused on income as it approaches and in 401(k) plans; in 2004, the $6number of acti ,644 ve participants increased to 53.1 million (new method) from 44.4 million (old 45 Year-end 2013 Snapshot of 401(k) Plan Loan Activity Participa 30s nts’ allocations to co to Company Stock in 401(k) Plans With Company Stock, by Participant Age mpany stock r topics. 37.4% EBRIef emaine 25.0% is a week d in line ly w rou ith r ndup of EBRI r 5.1% ecent previous y 5.5% esearch ears. Thirty and 3.7% insights, as well -five percent as updates on (or 9.1 15.6% mil- Figure data indicate Changes in Tabulation The Typical 12, Tenure Com s Asset Allocation Between Year-End that in 2010 401(k of the Survey C)o Plan m p position of Select any Participant , the median n of Consum f ........................................................................................... und ed 401(k er su * Finances re as mber of inve ) Acco balanc unt Bala v 2012 and Year-End 20 stmen e ed al that ab funt nce Cat ds option oue t half of tr s s offered gories tock as ................................................... among the 525 plans in th aditional IRA 13 companyassets in 2013 stoc .......................... 8 k and/or e sur ..... 16 vey PAge G ercent roup age of publications 2011 4% with In plan year up to t 401(k) accounts. Balanced funds were 41 0. w5% o years of tenure was 2012 (latest data avail $31,582, compa able), only 1.7 p percent of the account balances r Ped ercwith ent ercent of th age $2 of 48,397 for e $3.5 trillion in partici of re pan cently hired 401(k) participants at ts in th 401(k) plan assets eir 60s with mor were e than Steinmeier 20 Figure ? https://pressr $1.9 . N41, ote: T 201 1 Rec 40s he tenur 24. trillio “What e 08 and 2013. For a discu ntly Hir e van oom.vanguar riabl in assets. e i Does Percentage se 21. gener d 401(k 3% alC ly y oear nsistent Parti d s) w . Part com/content or21. of active 401(k) king at c 4% icipa urssion of the v rent nc ts Te em ipatio pl / 18. oy nonin er nd to 3% , and thus n in plan parti dex 4 Be a m 0 er a1 d i yLess Likely to 16. ety of (k ov /R er ) Pl 1% e scipants, ts ate y ilienc ans measu earsGe of e_in par 16. nerate? by years tir Hold Com 1% c_v es th ipatiolatile_mark on inat can b Chan the of tenure, 401( 17. pany k 1% ges in Acco ) plan. e Stock et used to evaluate Americ s_401k 2013 17. .................................... 0% unt _parti Balances, cip 16. ant_ 2%beh 200a 7ans’ vior – 39 .pd account balan Perspectivcee. 20, n This ocoul . 8 (d then be October). Avail mistaa kb enly describe le at www.icd i.org/ as apd n ifn /p dicat er20- ion that 08.pdf bal ances are declining, but actually passes the t 40s arget date of the fund, which is usual 37.7% ly included in the fund’s name. 9.8% 52.4% plans participants, see Mitchell and The 0 chan by ige nves int any i ment nopt diviidual ons and plan partic Utku ipant s 2012. size. ’s account balance is influenced by the magnitude of these three factors relative 40s 41.1% 18.2% 4.4% 6.6% 4.8% 17.7% surveys, studies, litigation, legislation and regulation affe c cting employee benefit plans, while 90% Age Group stock and/orAverage 401(k) account balance, by age and tenure, 2013 on Percentage of recently hired participants in plans ly>0–50 percent equity as only equity >50–90 percent only equity tar>90 percent get-date funds,* and/or method; see U.S. Department . 2001c. “Contributionof Labor, Employee Benefits Secu Beh 18% avior of 401(k) Plan Participants.” rity Administration 2014a). As th Investment Company Institute P e U.S. Department of La erspective 7, no. 4, bor However, c not all participants have access t 25 o 401(k) plan loans—factoring in all 401(k) participants with and without lion) of resulted fr Inves thetom 40 ment rollover 1(k Opt ) partici ionss Of from employer-sponsored reti p fered ants in th by Plan e 2013 EBRI/ICI 401rement plan plans (k) database were i s. partn ic ipant plans t s hat offered co Percentage mpany stock a of assets s an was 14 (see Deloitte Consulting LLP and Investment Company Institute 2011). Plan Sponsor Council of America GICs are guar 20 anteed investment contracts. Year-end 2013 Snapshot o 50s 250% 21.4% f 401(k) Partic 19 21.2% ipants’ Account 18.1% Balances 15.5% ............................................................... 15.5% 16.3 16.5% 16.5% 16.2% ............. 8 30 y participant l retirement readiness, Investment Availab ears of year-end 2013. ility and Use of 80 te pe o %ans. See nure rformance 50s (Figure see Brady, Burham, and Holden 2012. Tabl like 1401(k) e D7 in U.S 3ly ex ). Similar plaiPlan Loans ns a .ly, t 38.2% Department good deal he aver bage y of t Pl of ac h an Size Labor, e fl count uctuation balanc Empl 9.8% ioyee Benefits Security Adm e n 401(k) parti 16.0 of participants in t cipants 52.0% h’ asset eir 40s with up to allocations ov inistration 20 two er time. 14c. years would tel f 201 50s 2.” 300% l us ICI Res nothing abo 20search Perspec Plu an t c sonsistently tive 20 36.0% , n par o 11.6% . 4 ticipatin an 15.8% d E 15.1 g Bwork RI Issue Brief, Partiers. Similar cipants 4.9% 21% 10.2% no. ly, the 40 21% 2 a 60 8.7% (July). ggr sa,begate Avail 6.9% average acco able A 78.2% ssets at www.i unt 21%ci.org/ balanc pd 19.1% e f/w per ould 20- $40, 100 o 000r Fewer 101 to 500 Median T 5enure: 01 to 1,0 8 Years 00 1,001 to 5,000 >5,000 Figure 13, 401(k) Account balanced f Balances I unds EBRI’s Blog in ncr veea stm se Wit ent supplements our regular publications h Participant A investmentge and in Tenur vestm e ent ................................................... , off 21% n22. one 4ring -tar commentar get- 14.0 date balayn o cend questions funds ..... 16 U.S. De to the sta partm d rting a ent of cco Labor, unt bala Employee nce. For example, a Benefits Security contriAdministration bution of a given . 20 dollar 11. Private amount Pension 44 produc 21% Ples a an Bulleti larger n, A growt bstract of h rate offering company stock as an investment option, Tenure (years) 26.9 2013 Figure and E42, quit E Because f B Ne yRI Issue Brief, , bond, w 4 ew 0 m 1 pl oney, (ans f k) Parti al land/ i no. nto t cor ipants his23 balanc cat 8 egor (October Ten ed y, these per fd unds Not to Ho ). A cent vages m ailable ld Hi ay at be heav gh Co 71.w 0% wilw ncentrat y i. nf ici.org/ luenced by io pd ns in Com a f f/ ew pe 43. out r0 1% li7- ers04 p . a.pd ny Stock f and .................................... 40 35.3% notes: “In a purely economic 30s sense and for research purpos 16.8% es, individuals in these groups 10.4% should 72.7% not be included in the count loan acc investment o 36 ess in ption (Figure 22). Amo the database, only 18n g thes percene partic t had loa ipants ns o, 74 utstandin percent g at h year-en eld 20 percent 30. d 12013 or less o . On average, f their account over the past balances 2014 indicates that in 2013 The 20 60s 13 EBRI/ICI database covers a , the average number of in 30.5% bout half o 15.1% f the univestment fun verse of 401(k 4.7% d ) option plan 11.8% parti s av cipants ailable for parti 9.9%, nearly 15 percent cipant of pl 20.5% ans, Choi, James J., David Laibso 60s n, Brigitte C. b 35.3% Madrian, and Andrew Metr 10.2% ick. 2001. “Defined Contri 54.5% bution Pensions: Plan 60s 19.8% 20.3% 17.3% 14.2% 35.1 14.5% 15.4% b,c 16.5% 16.2% of tenure 80 was % $19,104, compared rece with a ived from $154,22 news 8 for reporters participants , p 29% olicin t ymh akers eir 4 , 0 an s d others with m. The ore than EBRI Databook 20 ye 60s ars of te on Employee nure. Much of Target d 04.p th df an e m ate f d ovement i www.ebri.org/pdf/bri unds often ar n the lar e used as th gest com efspdf/E ponent, e default in BRI_IB eq_4 uity 02 vestment in au fun _July14.K ds, tends t -Longit tomatic enr o refl .pdf ect over ollment plan all equity ms and arket pr in plans’ ices, which tend to be 22 Distrib Age G uE tion of Equity Fund Allocations rqui ou pull tp y ed Fund down i s f aC lo arge mpany num Stocber k of ol B and Par der alancpart ed Fund iciticipant Exposure to Equities p sants retB ired. ond7.8 F In additio unds n, ch GICsanges and Oin t therhe sample of Money Funds Factors That A40s ffect 401(k) Participants’ Ac c 19% 18.4% count Balances ..................................................................... 10.3% 71.2% ................ 8 Fifty-si when 200 ax dde 9 Form 55 percent of the 401(k) plans Not S our d t e: Of “c Fo e unds” :w a smalle Tabul h 10 ic i 00 h: ncl at tude m ia A orget n nnual sr ac fut r-dat om ual 7.0 count. On E fRe e unds, BfRI unds ports /I bank col CI P for are (V a the rticersion an lw iect pan hich lo other ha iopt vte t -N Di ion rust umber of Plan Participants re 1.0). c san t,e ld ifnd, e i R data Washin nsur et in ireance separ m wer vestment retu entgton, DC: P el avai an Da ate account tlabl a Co U.S. e in lrns of a lec s,t and any i the on Departm P50 r 2 oj given sec pool 01 t.3 ed i e EBRI/ICI nt o perce nvestfm Labor, Em ent ntage pr 4 oduct 01 pr (k) database poduce rim plo arily yee B larger e of nedollar fits fered a 43.6 50.7% 6.5 30.6% 43.4 25. >0% 20 Years 30 46 ? 401(k) participants continued to seek 5.9 diversi 44. fi9cation of their investments. Only 7 percent 43. 5.9 9 of 401(k) Plans With Company Stock and GICs, At year-end 2013, 1.9 per 5.5 cent of th and/or Other Stable-Value Funds 5.2 e participants in Percentage of Account Balance Invested in Company Stock the database were missing a birth date entry, were of active partici www.ebri.org pants.” Howev Age Group /pdf/briefsp er, the form df0–2 /1001ib. schedule needed pdf >2–5 >5–10 to make the ad >10–20 justment is no >20–30 longer required. >30 Using National 18 years, amo 70%ng All partici 48.3 pants with loans o 33.1% utstanding, about 14 perce 10.7% nt of the re 4.2 maining account 56.2% balance remained Figure in company st This p 14, attern 401(k) Account 18% ock, inclu is driven in part by re 50s 18% din B g a 54 lances Less perc Benefits ent strictions plac wh Than is o hel 18.2% a sta $10, d 18% tistic none 000, by al r ed on loan am (Figure efer 18% ePartic nce 3 work on em 4ip ).a On 9.9% oun nt Age a the oth ts. ploye nd Te e er h ben Sta nu a be n lefit prog re d -Val , 8 ........................................... u percent e Fu 71.8% rams and work force-related nds had more than 17 Plans contribution VanD and The tend 46 erhei, p 250% ercen A Ja enc lls ck L. 20 was 19 t of y of the ac 401(k 02. amon 21. ) “T 9% pla count balanc he Ro g the 613 plans surv n assets. Th le o 21.7% f Co e-to-sal e mpany Stock EBRI/ICI 18.ary rati 7% >30 Years eyed; proje in o to Ao c 16. 401(k) Plans t is un n Hewitt 2 peak 5% iqu at hig e17. because it .013 indicates an aver ” 0% Written stat her sala inc 17. ry lev 8% lu ement des els and th data for t 17. age n provi 7% he en f House Educat udmber of 20 ed by all off likely 16.4% a wide io n and Rules, P 20s articipant Decisions, 85.8% and th59 e .Path 4% of Least R 12 esistance.” .0% NBER Workin 2.9% g Paper, no. 865 115 (D .5% ecember). invested in the security indicated. 54.8 42 2.1 2.0 gene investment li Figure rally rose 43, Asset Allocatio neups (see Pl from 2003 thr n D an Spon o istribution ugh 20sor C 07, of dr o Recently oppe uncil of Americ d in Hire 2008 d 40 , rose from a 2014). At year-end 20 1(k) Partici 20p09 t ant Acco hrougunt h 20 13, 69 percen Balance 10, mo to Co deratempany Stock t of target date d in 2011, an id n rose recordkeepers and changes in the set of plans for which they keep records also can influence the change in aggregate EAge quity, bond, money, and/or balanced funds, 20s 32.1% 19.6% 21.3% 3.1% 1.1% 4.2% 12.4% plan increases loan Security A prov (or decreases ision to dmi 60s nistration partici ) when com (December pants 17% (Fi poun gur ). Avai d e ed o 44). 17.6% ln able at a The larger loan ww asse w.d feature was m o t base. l.gov/e 8.9% A bsset allocation also influences investment r sa/P ore commonly DF/2009pens associated ionplan 73.5%bulletin with lar .pdfg e plans 45 eturns (as Definition of Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. 401(k) Account Balance .......................................................................................... 62.2 17.8 ......................... 8 younger th Participa accounts were invested in company stock at 70 nts in % 20 an 0% 20, or wer 401(k) plans e older than 69 may hold equi. They ties throu were n year-end 2013 gh In a ves o vt included in ariety of tment Cat , the same sha ego opti ry this an ons inclu 40ralysi se as in 2012. ding > s 10–20 Y . equityear fu This share s nds, company stoc has fallen by 62 k, and Percentage of plans 65.2 issues. Compensation Survey data a 30s b 20s nd historical $4,905 5 rela 6.4 $11,732 tionships and t % $18,351 7 r.8 ends evident i % n the Fo 4.2% rm 5500 data, EBRI and ICI estimat 16.1% e the unpai 80 perc d. U.S. ent o Source: T Department of f their ac abul 0 atio 84 count ns from .5% E balanc Labor data i BRI/ICIes inves Participant-D ndicate that ted i irected R n com e loan tirem pan ey stock. nt P amounts te lan Data Col0–2 Years lnd to be a ection Project. negligible portion of plan assets. investment options in 201 reflects The variety of pla distri the in $30, butio n 000 recordk fluence of two competing f n of 16% account eeper balances u 2. Deloitte Consulting LLP s and, therefo nderro s e, represents cores the rces. First, em eff , In eth cts of a ternati e activity pirical research suggests 16% g oe nal an of Foundati d te partici nure pants i on on of ac n Employee Benefit Plan count 401(k that higher earners balanc ) planse s of varyin . In a give tend to g sizes— s, n a and the ge Holden, Workforce Cambridge, Group Sarah, Jack Va Co a M A Zero llmmittee S A: Natio nDer 1–10% nal hei, Luis ubc 22% Bu ommittee on reau o 11–20% 16% Alons f Econo o 21–30% 15.8% , and Crai Em mployer-Em ic Researc 31–40% g Copelan p h. lo 41–50% Available at yee R d. 2008. “401(k) Pla e 10.2% lations 51–60% w Hearin ww.n 61–70% ber.or g o n n Asset Allocatio g 71–80% “Enron an /pape 74.0% rs/w 81–90% d 8Beyo 6n 5, Account 5 nd: En 91–100% hancing 30s and GICs and/or other stable value >20–30 Years 43.3% funds 12.6% Figure 51 12.2% 4.3% 1.6% 6.3% 13.8% 401(k) Plans with Company Stock, by Participant 26. Age 4% ........................................................................... 22.3% 43% 21.2% ..... 40 in 2 mutual fund 012 a a nd 2assets wer 013 A target-date fund typically rebalances its portfolio to become less focused on growth and more focused on income as it (Figures e h 7e , 8, a ld in DC plans (see Inve nd 20). At year-end 2stment Comp 013, equity fuany Institute 2014). Plan Sp nds were 44 percent of the as onsor Council sets in the EB of RI/ICI average account balance. Thus, to ascertain what is happening to 401(k) participants’ account balances, a set of Figure 15, 401(k) Account Balances Greater Than $100,000, by Participant Age 18. an 2 d Tenure ..................................... 17 me and c 10 0a s u h . ran e200 dges i A b target-date fund ty 60 y 2. % th n “Ca assets. For e nu n 4 mb 01 er (pi k) of cal exampl Accumulations lyp rebal artiances i cip e, st antts in th s po ocks (as measur Ge rtfolio to becom nerat e plan e ).Si N e le gnificant ed ine ss focused on grow ty by the S -two Incom per &P 500 tota cent of pla e th and m for Future ore focused on i l ret ns wit R urn in etirees?” Investment Compa h more than dex) incr ncome as it approac e 10,000 ased hes and 32.4 per particip c nent ants y Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection P2012 roject 15% . balanced fu 40s percent since 1999. Recently hired 401(k) pa nds. This sectio 81.2 -1% .6n focuses a first 50.9 on the investing % rticipants contributed to this trend: 7.3pattern % of 401(k) plan 5.9% participants they tended to be less likely to hold 40s wit 1h 7. respect to 1% equity Size of 401(k 200% ) Account Balances ............................................................................................... 5% -2.0 ........................ 11 number of acti 40s 20s ve 401(k) participants to be about 53 million 72.1% 4.3% 3.8% 45.7% 3.3% 8.0%2.8% in 2013 a 3.5% 9.4% nd th1.6% e number of 40 30 4.8% s0.8% 1(k) plans to be about 518,00 1.9% 0.6% 0.4% 8.7% 6.6% 15.4% 0. The 30s $11,896 $24,458 $42,905 $66,139 32.5 group, shorter a Of tenur approaches and passes the target date of the fund, which is usually included in the fund’s name. which:e t target ends -datto mean e funds are that an a hi option gher percentage of participants will have account balances of less than Internati contribute hig from very Balances, Worker olarge corpor nal Retir Society and her percent ement S Loan Activity i ations of Cer ecurity ages of to small tified Employ ” n(Februa 2 sal 007. busi ary; ” rnesses—with a Inve therefore y 13). Availa ee Benefit Sp stment Co , on ble at 18. ecia e woul mpa variety of investment optio 7%lists 2013 ww ny d e Institute w.ebr -4.2 xpe i.org report that the aver ct the ratio of R/ e14. pdf search Persp 7% /publin catio accoun s. e nctive 14, no. 3, s/testimony/t age n t balance to u 14. mber of fun 0%133. an sal pd d aEBRI fry to rise ds 23 M 60 ino %r investment options a14% re not show Lo n; th an erefor s Fr e, per ocen m t4 ag0 es1 do (k n)o P t Figure 3 adla d to n 1 s Te 00 perce nd ned t t. Perco ent B agee s 14% S are m doal llar- l weighted averages. passes the target date of the fund, w Age Group hich is usual >0–50 percent ly included in the fund’s nam >50–90 percent e. 14%>90 percent 401 America 2014 (k) dat . 201 aba 2ase, up reported an i . Private from Pe 3 nsion Pla 9n pcrease in th ercent n B in ulleti 2012. e incidence of n, Abstract o Balanced fun f autom 200 ds, 5 Form which atic en 55 in00 A rollment in 20 vest in nnual both Re equiti ports 13. Of more than 600 plan e (V s an ersion 1.1). d fixed-incom Washin e gts on, consistent participants m -10 2012 ust be Form 5500 analyzed. Future resear F cih gur wie 2 ll exami 23. 6 9 ne linked data to analyze the consistent sample of 50s b 77.8% 45.8% 5.8% 7.4% 18.7% At year-end 2013, 9.9 per 50s b 30s 69.3% 6.2%cent of th 5.0% 39.4% e participants in 4.1% 6.4%2.8% the database 2.7% 8.6% 1.7% were missing 5.8% 0.9% 2.3% a date 0.7% of hire entry and were 0.5% 15.6% 6.2% 16.0% durin incluInstitute P ded a g 2013, loawhile ne provision, rspective bonds 8, no. co (as measure mpared w 3, and Contact EBRI d ith EBRI by the 32 Issue Br percent Barc Publications, (2 lay of ief, s pl Capital no. ans with 251 02) 659-0670; U.S. (November 10Aggre or feg wer ate )fax publication . Availa partic Bond I ble ipants. Partici n at dex) dec orders to www.ici.org reased pa (20 nt loan /p 2.0 2) 775-6312. df/ per per activit 0 cent 8-0 y3 .pdf Not all participa The analysis includes the 2.9 million recently hired participants (those with two or fewer years of tenure) holding balanced f nts are offered this investment option. See Figure 22. unds in 50s funds. Figure Th 44, company stock. e ass Perceentage of 401(k t allocat ion of participan ) Plans Offering Loans ts without 13% equity by Plan fund Size, s is ex 2013 plored ................................................................. 41 next, because 401(k) pa 13% rticipants holding no 401(k) Plan Loan Activity Varies wi 20s th Particip 11.3% ant Age, Tenure, Account Balance, 19% 8.8% 79.9% and Salary Asset Allocations of Recently Hired Participants Congressional estimate of the number of acti Equity, bond, Budget O money,ffic and/ e.or ve 401(k) plan 20 balanc 13. Th ed e funds 2013 Lon participants is ba , g-Term Projections sed on a combination of data fr for Social Security: Addit om U.S. Department of ional Information Labor, Figure Relationship o 16, Note: T Median 401(k he analy f Age a 40s sis includes the 4.4 m n)d Tenure to Account Ba P $19,104 ercentillion recently Account a lance Among Longer ge of $36,547 el Balances i hired partic gible par ipants (those w ............................................................................ t $62,087 ici-Tenured Par pants, by ith tw pa $109,257 o or few rtticipants, by icipe an r yt e a ars of tenure) in 2013, the ge, $154,228 A 2 g 25. 013 e a 9 nd Salary, 3 2013 .6 million................. .............. 11 19 offered by th with salary $10,000. Fo. However r e e nearly 400 xample,, 8 tax c 6 pe 401(k) plan sponsors o rcent o de con f tpartici ribution limits pants in surv th an eir eyed d nondiscrimin 20s was 19 i with two n 2012. BrightScope ation rules, wh or fewer 20s years of t ich aim to en enur and Investm e had account sure th ent Company at balances of Issue Brie c f, no. 324 (December). Available at 10ww % w.ici.org/pdf/per14-03.pdf and 60s 50% 71.4% 401(k) Pl 40.2 an Characteri % 5s .6ti %cs, by Plan A 8.4ssets, % 2013 23.0 17.2% 60sGI40s Cs 15 ar 0% e guar 68.7% anteed invest 6.2% ment contra5.1% cts. 32.5% 4.3% 6.0% 12% 2.9% 2.5% 8.1% 1.8% 6.4% 1.0% >5–10 Y 2.6% 0.7% ears 0.5% 24.5% 12%6.3% 15.1% securities, i surveyed DC: U.S. , 50.2 percent had ncr De eased 2013, the 2.2 pa 30srtment of in shar million recently hired participants holding target-date funds in 2013; and the 0.7 million recently hired partici e, accounti Labor, Employee autom Asse Subscriptions to attic en A ng for 23 percent llo15.5% ca rollment in 20 t Bene io EBRI n D fits Se i Issue Bri st of rcur i13, bu the assets in the dat ity Admin comp teifs on are included of 10.1% ared i 4 stration 0 with 47.2 percent in 2012, 45.9 percent in 1(k) as part of A (March ac bas coeu ) at y EBRI . A nt ve ailable membership, or as part of 74.4% ar-end at pants 2013. Despite these a partici 80 pants in the EBRI/ICI data collection effort from 2007 through 2013. 17.2 25.7 not included i 150% n this an 19.4 alysis. 28.4 ( varied Figu and re modes s 7 an ww $20, w.e 000 d 8) tly by bri. . oplan rg/pdf size /b, rie ranging from fspdf/1102ib. 19 pd percent f of participants with loans outstanding in 401(k) plans with 26 to 50 recently % hired participants in 2012, the 3.4 million recently hired participants in 2011, the 3.2 million recently hired participants in 2010, the equity fu and nds com may hold e pany stockquities in the form of company stock 1.5% or through bala 18. nce 3%d funds. Finally, the overa 18.9% ll investment Orders/ Note: “Funds” inclu -20 de mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investment product primarily invested in the Bureau of Labo (Dec . 201 ember). 0. “T r Statistics 2012, 2013, and 2 he Washin Impact gton, of Automatic 401( DC: Con k) Loan asg aressi Enrollment 014; and U.S. onal Bu in dget O 401 32. Department of 3 (k) Pla ffice. Availa ns onLabor, and Em ble at Future Retireployee Benefits Security ment Accumulations: A Simulation Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. holding non-target-date balanced funds in 2013. 40s 17.3% 9.8% 73.0% 60s less than Plan As 50s $10,s000 ets 69.2% 50s in 2013, 6.4% co$26,284 mpared 4.9% To w tal 5i Pl th 0.8 ans $44,823 53 % 4.2% perc Tent o otal 2.8% Par $69,919 f 7 tpartici i.8 cipants % 2.5% 30% pants i $123,777 n 1.7% their T5 otal .8% 2 As 0s 0.9% s wit ets $211,424 * h bet 0.7% wAv ee en r$252,418 age Ac five 10.4% 6.1% and count Bal 106.3% years ance of Institute 201 employees of Relationship ww Aw.ebr ll i4 reports .org all income ranges attain th Between Acco /pdf 8/b 0.an riefs 5%average punt Bala df/EBRI_IB $199 annual sub of 25 nces a _1 investmen e benefits 2a- nd Salary 200 scription 8.ptd .............................................................................. opti of f to the 401(k) pl ons in 201 EBRI Notes 2, and an an, c and Eo BRI Issue nstrain average of 20 inv the ability of Briefs. Change of high-income estment opti Address: .............. 15 EBRI, ons In Comp the 20 ?aring Part 13 snap EB icip Rant shots of I/ICI 40 s’ 401(k 1( newly k)) d la ohi tab an red 4 a a ase ct, 87 p 0 ivi 1( tk) plan y ie nrce 201 n partic t of 3 w pa iap s l rti ants’ ictitplants e chang asset al were e locations provi in d f pl rom ans offering year-end des f 201 loans. Ho urther 2. ins At year-end wever, ight into r as has 2013, ecen been t Figure 45, Percentage of Eligible 401 20.0 (k) Participants With 401(k) Loans, by Plan Size, 2013 ...................................... 41 shifts in 2011, 41.8 percent in 2010, 38.4 percent in 2009, 39.6 perc ww se w.dol. share 3.1 m curity ind illion recently gov/ s of balanc icated. ebsa hired participants in /ped df/200 and 5equity f pensi2009, the 4.0 m onuplan nds, most 40 bulletin. illion recently pdf 1( k) hired partic participants ent in 2 ipants in 2008, the 3.8 m appeared 008, 35.6 per not to ha illion recently cent in 2007, ve ma hirde ed p dramatic about 17 perc articipants in shift s in ent a Balance to Equity Funds, by Participant Age Figure 17, Rat Ofi o of cwh 50s ich: 401(k target )-dat Account Balanc e funds are an e opt 16.9% to S ionalary, by Participant9.3% Age and Tenure ........................................... 73.8% .... 19 Percentage of Remaining 1.0% 17.A 5 ge Group 14.1% 14.0% 250 Minor investment options are not shown; therefore, row percentages will not add to 100 percent. Percentages are dollar-weighted participants to 25 percent of participants in 401(k) plans with 10 or fewer partic averages. ipants (Figure 45). Loan ratios—the Row percentages may not add to 100 percent because of rounding. in equities acr 60s oss all 4 70.0% 01(k) 6.0% plan partic 4.2%ipants is pr 3.9% esent 2.4% ed. 2.4% 1.6% 20.3 0.9% 0.6% 0.5% 7.5% Administration 2011, 2012a, 2 Study $0–$250,000 Based o 40% n Plan Design 012b, 2012c, 2012d, 2012e, 2 Modifi 12,352 cations of Large P 81,973 l014a, 2014b, a an Sponsors.” $1,108,856,465 nEB d 2014c. RI Issue 9.7 Brief, no. 341 $13,527 (April). Available at 24 www.cbo.gov/s 7.i1tes/default/files 1100 13th St. NW, Suite 878, Washington, /cbofiles/attachments/44972-SocialSecDC, 20005-4051, (202) 659-0670; fax number, urity.pdf b Tenur 2007, and the 2.8 e (years 60s ) million recently 32 hired participants in 2006. 18.916.4% 8.3% a,b 75.3% when a target date fund individuals to tenure EBRI/ICI 401(k) Database (Fi 40g %ure 14 save in the pl 60s ). Older wo suite is counted as a an. See Holden and VanD rkers displ $31,582 ay a $45,691 similar single i patter $65,639 er nn vestm hei 2001c for a compl . For exampl ent op $108,382 tion. e, 60 percent e $183,505 te discussion of participants in t 11.$248,397 2 of EBRI/ICI findings heir 60s with the case for the 18 years tha401( t the 27% k) Adata ccount ba Bse alanc has tracke e 20s d 401(k40s ) plan participants, r 60s elat All13. ively f 1 ew participants made use of investment a A target-date fund typically rebalances its portfolio to become less focused on growth and more focused on income as it approac 21 percent of a 100% llocations. Bala ll 401(k) participants who were eligible fo nced funds, which i Percn ent cluage of de lifes par tyle an tir loans ha cipant d tar s,gd loans et-date 2013 >2–5 Y fu outstanding ear nds s hes and passes the target date of the fund, , have ag increas ainst their 401(k) accounts, ed in popularity Year-end 2013 Snapshot o 60 The positive Subscriptions correlati -30 on between tenure and account 18. f 7401(k) Participants’ Asset Allocation balance i ............................................................... s expected because long-term employee .............. 15 s have in 2005, and their asset E . quit 200 yallo , 3. bond, 10.5 percent i “4 cations in 2013. 01 m(k) Pla oney, and/ n Asset Allocatio or n 2004. Th balanc ed funds e Vangu n, Account , ard Group 2014 reports th Balances, and Loan Activity i at 34 percent of DC pl n 2002.” Investment Com ans in th peir any All Note: “Funds” include mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investment product 70.1% 5.6% 4.6% 3.9% 2.8% 2.9% 1.7% 0.9% 40s 0.7% 0.4% 11.9 6.4% Definition of 401(k) Account Balance Distribution of Plans, Participan 3.8 ts, and Assets 9.1 by Plan Size amount of >$250,000–$625,000 the loan o All utstanding divide9,112 d by the 14.9% remain 128, ing a 416 ccount bal 9.4% an $3,884,536,866 ce—vary only slightly whe 75.7% $30,250 n participants are "Funds" include mutual funds, bank(202) 775-6312 collective trusts, life i; e-mail: nsurance separate accounts, and any subscriptions@ebri.org pool ed iMe nvestm mbersh ent product pri ip Information: marily investe Inquiries d Figure 0–2 46, 401(k) Loan B 25% 85.9a % lances as a 7.9 Perc 62.2% entage of 401(k) Accou 11.7% nt Balances for 2.8% 7.1 Participants With 9.2% Loans, by Plan 100% Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. Zero 88% 73% 86% 79% Holden, which is usually included in the fund’s name. www.ebr Sarah i.org , Jack Va /pdf 2.4 /b nDer riefshei, a pdf/E bn BRI_IB d Carol _0Quick. 2000. “ 4-2010_No341_A 401(k) Pla uto-Enrl. 6.3 n As pdf set Allocation, Account Balances, and Loan Figure 18, Ratio of 401(k) Account Balance to Salary for Participants in Their 7.4 20s, by Tenure 24% ................................. 5.3 .. 20 two or fe Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. wer years of tenure had account balances of less than $10,000. In contrast, less than one-fifth of those in and other r . 201 Ae ge 2search on b. primarily invested in the security indicated. Private P the ensrelation ion Planship b BuP lle ertin, Abstract e cen tween c tage of A ontri c o cf o 2 bution rates unt B 006 a lForm anc18 e I 2013 n % 5 vand salary 500 es30s ted Ann in E u qui al . For ty Re Fu ports nds an an 6.3 (Version 1.1) alysis of 401(k) . Washington, among this borro and 40 the same as in $10, win 1(k com g 000 ) partic privil pany sege. At y tipants. octhe prior four years, alth k, and Recently GI ear-e Cs n and/ d 20 hir ored partic 13, 21ough percent ipants up from 18 per of in those e 2013 teligibl c nde ent at year-end 2008. de to be mor 5.for loans 6 had e likely to 401(k) plan hold bal loa ans outstandi nced funds ng had more time to accumulate an acc -33.8ount balanc 4.7 e. However, a rollover from 22% a previous employer’s plan 22% could recordkeepin 3 Ass c e Institute P t Allo in the securi catio g system in 2013 offer automati en rspective to ty i Equ ndicated. ities 9, no. >10–20 Years 5, and EBRI 5.8 Issue Br c enroll ief, ment, up from 32 percent in 2012. no. 261 (Septem 21% ber). Available at www.ici.or 5.0g/p 21% df/per09- > a $625,000–$1,250,000 30% Note: At year-end 2013, the average account balance among all 26.4 million 401(k) particiants was $72,383; the median account 1.7 3.regarding 9 10,041 EBRI membership an 224,547 d/or contributio $9,157,550,220 ns to EBRI-ERF should be dir 3.8 $40,782 ected to EBRI 11 >2–5 84.1% 3.7 1–10% 57.4% 24% 2% 20% 10.2% 9% 20% 5.0 6% 3.3% 7% 13.2% GICs are guaranteed investment contracts. 30% 20% 3.7 Copelan As group See Inv Changes in Asset Allocation set Alloc edd The analysis includes the 1.3 million participants with two or fewer years of tenure in 2013 and in plans offering company stoc bas e, C stme a rai e tion t d on nt Company In g. 2011. the o Eq s uity “Tar ize F of the get Dat unds stitute 2014. By 2014: Between ir 401 e Fun (k Year ) d pla Use in -End 2012 an n 19% s (as 401(k Q3, 40 meas ) 1(k) plans had Plans an ured d Year-End by t d t he he number 2013 $4.5 trillion in assets. Persistence ........................................................... of pl of an part Their icipa Use, 2 k as an investment option. nts)0 . Among 07–200 thos 9.” EBRI e in .. 15 Size, 2013 Age Group -40 .................................................................................................................... 19% 2.5 19% >0–50 percent 3.4 >50–90 percent 4.5 26>90 percent .......................... 42 The As a cross sec 2013 EBRtIion, or sna /ICI 401(k) p s database co hot, of t -37.0 he ent ntai 2.i 7re ns informat population ionof on 40 72,6 1(k) p 76l 4 an p 01(k arti ) plans cipants, th with $ e 1 d.91 atab 2 tr ase in illion in cl 3.u 3 d assets an es 401(k)d The asset Activity in 50% allocati 1998.” on pat Investmen h that the t Company target Ins date fund fol titute Perspect low ive s to 9, shift i no. 5 (J ts focu anuary), s from and growth to inc EBRI Issue Brief, ome ov no. 21 er tim 8 e is Sources a Grn oup d Types of D Zero 1–10% ata 11–20% 21–30% 31–42. 0% 9 41–50% 51–60% 61–70% 71–80% 81–90% 91–100% bother stable balance wa value 19.2 funds s $18,433. The tenure variable is generally years working at current employer, and thus may overstate years of 1.1% 16.3% 24.6% participants’ c their DC: U.S. 60s withDe more than ontribution partment of 20 ac Labor, Employee years of t tivity during the bear ma enure ha Bene d acco fits Se unt rk bala et of 2000 to curity Admin nces of lie stration ss than $ 2002, see Hol >2–5 Years 17. (March 710,000. )d . A en and Van v ailable at Derhei 2004c. For (Fi 40 gure 4 >$1,250,000–$2,500,000 7). As in previous ye >ars, loan 10%–20% 11,346 activity varies 2% 432,210 with age, te 6% nure, account $20,379,123,022 3% bala4% nce, and salary. 30% $47,151 Of those compare Asset Allocation and Participant Age Note: "Funds" include mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investment product >5 Row percentages may not add to 100 percent because of rounding. d –1wit 0 h recent hires in the President Dallas past. About two 48.7% Salisbur -thirds of y 7 at th .9% re e cent above ly address, ( hired 40 5.3 0% –202) 659-0670; 1(k 2 Year ) pla primarily invested in the security indicated. s n 14. part 5 e-mail: icipan 1ts in 7. salisbur 5%20y@ebri.org 13, 2012, and interfere with this positive 20s 79 0..5 9 % correlation because a roll 11.2% over could give 8.1% a short-tenured employee 80.7% 13.2 a high account 05.pdf and www.ebri.org/pdf/briefspdf/0903ib.pdf 12.2 Figure 19, Ratio of 401(k) Account Balanc 10.9 1.9 e to Sa 10. lary 8 for Participants in Their 10.3 60s, by Tenure ................................... 20 participation in the 401(k) plan. 9.9 a 8.9 10.2 Among i plans with . n 201 divi 1,0 4. dual 4 00 or “Why 0 f1 e Does (wer k) pla p Rarticipants, t e ntirement participa Re nts, the ha e loan 8.d 5ines allocatio s ratio Vary w : Results from E a ns 13 of ac per count cent ba of the Blances to RI’s 2014 Retirement rema equit ining assets i ies (equSecur ity f n 2013, uin ty Projection ds, company while in plans stock, Issue Brie ? The y 20sef, ar-end no 69. . 36 5% 20 1 (Au 13 a 1. g1% ust). Availabl verag1 e 401(k .3% e at ) 1 acc . 8% ww ow.ebr unt 1.9% bal i.org ance i /pdf 2.5% /b n t riefs he d 3.0 pd a% ft/a Ebase w BRI_IB 3.0%_0 as 13.2 8-2 3.011 4%p_No ercent 3 3.6 7% 1 hig _TDFs.p h8.8% er td hfan t he 37 Asset Allocation and Participant Age .................................................................................................................. 15 typically refer partici 26.4 millio pants n 2013 who are youn participants Ofr w ed to as the h 30s EBR ich: ta I/IC rget (Fi I-dat g gand t ure glide path. Si > e 20–30% funds 1h )ose . As i are wh n an o are the 4 nce discu opt 15.0% ion 0new to t 1(k) un 2% ssions of ih v 0.erse eir jo 7% at l asset bs, 4% arge, as well as o 8.9% all most of t ocati 1%on usuall 6.l8% der he pa plans in 3% rticipants y focus the 76.2% on th and dat11. those who a e percentage base ar 7% e sma havll: of the e been The year- (Februa enr d y). Av 2013 EB ailabl RI/ICI e at www.ici.org/pdf 401(k) database shows tha /per09-05.pd t, on av f and ww erage, w.eb 44 percent ri.org/pdf/ of partic briefspdf/0 ipant 200ib. account pdf balances were >$2,500,000–$6,250,000 12,718 1,001,034 $50,629,115,806 $50,577 4 >1 20 0– % 20 20 % 77.1% 36.9% 2.5% 12.9% 22.3% summary statistics on At year-end 2013, 62 perc www.dol.gov/ -50ebsa/contr pdf/200 ibuti ent of non–target-date bal 6pon activity in 2013, see The ensionplanbulletin.pdf anced Vang fund assets uard Group 2014 and Aon Hewitt 2014. were assumed to be invested in equities 201 Figure partici 1 h pe 47, ants i ld Few 401(k) Parti bal na pla nced ns offerin funds, c g co ipants Ha loans, th mpared w e h d O ith iu ghest percenta less than tstanding half 401(k i ges n) 2 Loans; Lo 006, of pa an rticipants with d o ans Te ne-thnde ird in outs d to 20 Be tandin 02 Small, (Figu g lo re Sel an 35e balances ). At year cted Years were -en ........... 42 d among 2013, balance Several recor . Th ®er de is some discernible evide keeping organizations provided r nce of roll ecords o ove nr ac as tive partici sets amop nants in g the partici 401(kp ) ants plans at year-end 2013. with account balanc Th es ese c 50% 30s The Employee 30s Benefit Research Institute (EBR 40s 54.5% 2.2% 2.2% 17.1% 2I) .8% is a no 3.0% nprofit, no 3.7% npartisan, 8.3%4.5% public po 4.7% licy research o 5.3% 74.6% r5ga .4% nizatio 1n 1.8% that does not 2007 2013>30–80% 2007 2013 20074% 2013 7% 2007 2013 3% 2007 6% 2013 2007 2013 and t As in h previous e equity 0% years, the dat portion of bala abase nced fu for year nds) varies wi -end 2013 sho dely around the av ws that 25% partici erage of pants’ asset al 66 percent for location vari all pa ed considerably rticipants in th e with with mor Model. Allye e th ar bef ” aT nh 10,000 e ore, but Journal o 20 parti 07 may fc R ipants, th not etirement 20 accurat 08 e lo 1, no. 4 (April an ratio e20 ly09 ref was lect t ): 95 20 11 percent h 100% 10 20s e ex –1peri 17. 20 ence of (Fi 11 gure t46). y100% 20 p12 ical 401(k 2013 ) particNo ipv- ant 100% 14 s in 2013. To >$6,250,000–$12,500,000 $0 6,470 1,117,226 $56,981,739,293 $51,003 In a 49 perc with t Editorial Bo give h> eir ent 2n a 0– curr 30 ogfe the plans have ard: ent em grou Dallas L p, lo ployers 67.9 nger . Salisbur % for ma tenur 25y ,or fe publisher e t ny yea we ends 28 r participants, an ; Stephen Blakely .1 rto mean % s. These that ann , editor u 3 a hi al u d .527 perc % .gh Any pdat er views perce es ent h of expr the na tage 1 es ve 4. data sed in this p 3% 26 of to partic bas 10 e ublicat 0 provide ipants partici ion and th s will pn ants aps hav 2ose o 2.h (Figure 1ots e % f accou th of e author 2 401 n ). I t s sho (k bala n) unces ld portfolio inv allocated to e eq sted in equiti uity funds (Fies, gure the glide 21), whic path gener h is one way t ally refle o hold e cts th quiti e e declining percentage s. However, individualof eq asset a uities in the p llocations vari ortfolio ed Figure Asset Allocatio 20, 401(k) Plan 50s n and Inv Assets Are Conc estment Options entrated 17.3% ....................................................................................... in Equities ..................................................................................... 21 7.9% 74.9% .................... 18 20 (see Investm . 2004a e. “4 nt Company 01(k) Plan Institute, Quarterly Supplementary Asset Allocation, Account Balances, an Data). Th d Loan Activity i e allocati n on to 2003.” equi Invest ties in target-d ment Compan aty e participants in their 30s, 40s, or 50s 20s >80% a,c(Fi 30sg ure 48). In2% addit 40s ion, pa 1%rticipan 50s ts with 1% five or 60s 1%fewer years A of tenur ll e or with 51 plan perc recor 33 ent o d40s ke f epers recently 37 47. inclu 1% hire ded 2. mutual 401 7%(k) pa fun 2.5% rticipants hel d companies, 3.2% d tar ins 3.6% urance get-da4.3% compa te fundnies, an s, w 5.5% hile d co 16 5. pe 7% nsulting fi rcent he 6.3% rms. Al ld non– 5.7% though target1 -d the 3.4% ate b EBa RI/ICI lanced greater than $100,000, as 2 percent of them had two 25% or fewer years of tenure, and 6 percent of them had Deloitte lobby or take positi ConsuSourc lting LLP, Inte on es: Bl s on oomberg, Barc legislative proposals. rnational lays Global Fou Invesn tord sation o , Frank Rusfs Em ell Com plpany oyee , and Standard & Poor's Benefit Plans, an . d the International Society of Certified not be 10 ascribed to the officers, % Of which: ta 1996 rget date trust funds 1999 ees, m are em an bers, or opt 2002 ionother sponsors of the E 71. 2007 2% m2008 ployee Benefit Research 66.2% 2010 Institute, the EBRI Educ 2012 64.7%2013 ation and 31 age. Youn >3 >$12,500,000–$25,000,000 0 ger partici 60s 62 pants te .9% nded to favor 4,019 23.8% 16.7% equity fu 1, nds a 351,431 524% .6 n% d balanc 7.5% ed f $70,918,428,406 unds, 17.5%while older partici 75.8% p 16 ant $52,477 .0% s were more likely 201 Investment Co 3 database. mpany I Forty-nfour stitut percent e. Quart of erly S partiucppl ipants ementa had m ry Data. ore than Washin 80 pgton, DC: ercent of t Inves heir account tment Com balp an an ces investe y Institute. d i n Figure 4understand 8, 40 10%1(k) Loan changes in 40 Activity V1(k) participants’ average accou aried Across 401(k) Plan Partici nt ba pants lances, it is important to ..................................................................... 43 analyze a sample of consistent a So urce: Tabulatio ns fro m EB RI/ICI P articipant-Directed Retirement P lan Data Co llectio n P ro ject. greater as it account contrast, only At year-end 2013, 62 perc approac . than 201 balan 2c $ h c2 percent 100, . es and p es, asset allo Private 000. Fo Pe of t asses the nsion Pla r e h cation, an x e ent of non-target-date bal ample, plans target n B 1 have d ulleti 9loan activity pe date, more than n, Abstract o rcent o which is f partici acr 2,o 500 f ss usually indic Age G 200 a pnced ants wide partici 7 roup Form in cross sections of mutu th pant eir 55 a al sted in the fu 00 A . However, 60s fund assets nnual with five Re pa participants nd’s name. The target d t rticipants. Ho ports were assumed to be invested in o 10 (V years o ersion 1.5). anwever, d assets are f tenure Washin the ha cro a d acc te g ss- ton, ount widely across participants. For example, 52 percent of participants held no equity funds, while about 17 percent of 50s The S&P 500 is an index of 46.2% 3.4% 500 stocks chosen f 3.0% 3o .8% r market siz4.2% e, liquidity, and indus 5.0% try group r 6.2% epresentation. 6.1% 5.8% 4.3% 12.2% Asset AllocatioAll n by Investment Options and Age, Sa 14.7% lary, and Plan 8.2% Size ......................................................... 77.0% ....... 18 funds varies Resear Institute P ch Fund, with the fund erspective or their staffs. 10, no. 2, Nothin s’ target dates. F g her an ein is to be co d EBRI Is or target-dat sue Brief, nstrued as an attem no. 272 e funds, in pt to aid or (August vestors were hinder ). Available the adoption assumed to b at of a wnww.ici.or y pending le eg/ in a fund whose gislat pdf/ ion, per re 1gulation, 0-02.p df funds, more than and 1 30 percent years of t hel ed nur boe w th target-date ere less likely to and non–tar use the glo etan provision than -date balanced funds othe (Figur r participants. Four e 36). teen percent of between project has two coland five year lected data fro s of tenure (see Figure 12). m 1996 through 2013, the universe of data providers may vary from year to year. In In the 18 year VanDerhei, S> ource: $25,000,000–$62,500,000 Ja Tabul ck, and Crai s that the dat ations from Eg BR Copelan a I/base h ICI Partica d ipant-D s been trackin . 3,245 200 ir8 ected . “The Reti Impac rem g loa 2, ent 369,458 P nt lan ac of D tivity amo a PPA o ta Collen cti R on e n $126,089,474,578 tirement P g roj 401(k ect. ) Savin plan part gs for icipa 40n 1(k ts, there has ) $53,214 Participanbeen little ts.” EBRI Figure Employee Ben A 21, ll Average Asset b efit Spec 80.5% Allocation of ialists. 2013. 401(k) Accounts, 5 0 Annua .8% l 401(k) Benc 7 by Partic .8% hmarking ipant Surve Age 5.8 .................................................... y % : 2012 Edition. New 11% 1 York, 6.1% NY: Deloitt ......... 22 e to invest i equities, w nhile fixe 10 d-income percent sec heu ld no rities such equiti as es bon at all d at th funde e s, 20s GICs nd of an 20d ot 13 (Fi heg r stable ure 30-valu ). Yoe un funds, ger 40 or mon 1(k) pla en y fu part nds icipa (Figu nts re 2 were 1). participants. The Rus Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. sell 2000 Index measures the performance of the 2,000 smallest U.S. companies (based on total market capitalization) included in the 60s Source: T 50. abulations from EBR 6% 3.8% I/ICI Participant-D 3.3% irected R 4.0%etirement Plan D 4.4% ata C5.0% ollection Project 5.7% 5.0% 4.2% 3.0% <0.5% 10.9% balanc sectional a 5 concentrated i a es inn ex alysis is not w cess of $ n large pla 10n0 e s. For ,0 ll suited to 00 in example, 68 perc 2013 addr (Fig essing th ure 15ent ).e How que of partic e sver, 4 tion of t ipants ar 6 perc he im e e in n pact of t of pl partic ans with partici ipa more t n pts in t ation h in heir an 40 60 2, 1(k) plans over 500 part s with bet icipa wen e t ts, and ni me. generally is the date equities (see Investmen partici 0 or interpretative DC: U.S. pants h 0% De eld more t pa rule, or as rtment of at wh h legal, an t C 80 percent Labor, Employee ich the typical ompany Instit accounting, actuarial, o of their investor for ute, Qu Bene ba r other such prof la arterly fits Se nceswhom in cur Supplementary Data) equity f essional advice. ity Admin that fu und ind is designed would reac stration s (Fi ww gw. urebri. es 2 (March . Allocation o6 rg and ). A27 vailable ). to equi Furth at h retirement ermore, ties in target-date age and 0% 5% A target-date 1996 fund typical 2000 ly rebalances 2002its portfol 20i05 o to becom 20e 07 less focused 2008 on grow 20 th 09 and more 20focused 10 on 20i11 ncome as 20 it 12 approaches 2013 target date w and >$62,500,000–$125,000,000 www.e a a as ne bri.oare rg/pdf st t/o b rie their 65th birt fspdf/01,401 804ibhday. 1.pdf The eq 2,211,718 uity portion w $123,839,628,580 as estimated using the ind $55,993 ustry average partici F The Investme igurep 4 ants 9 S, ource: T 40 wi 1( Russell 3000 Index ( th account nt Company Institute (ICI) is k) Loan abulations Bal from ba a w E nce lhich tr B aR nces of Is /IC acks the 3,000 lar ........................................................................................................................... 43 I Parti less t cipant-D the national ass h gest U.S. com ian recte $10, d Reti 00 panies) rem 0 h ent P .a o d loa ciation of U.S. invest lan Dan ta C s outst ollection P andin roject. g. ment companies, including mutual f unds, additio Distributio So u n r, th ce: Te s an bulat of Equity ample ions f of rom Fund A pla EBn Rs I/ at any ICI P llocations articipant give -D n and irec provi ted R Participa der c etirem aent n nt Exposure to chan P lan D ge. T ata Chus, o llec Equities t aggre ion P rojg ec ate .................................................. t. figures in this report generally ....... 18 should 0% Participants include the 26.4 million 401(k) plan participants in the y The analysis includes the 0.4 million recently hired participants (those with two or fewer years of tenure) holding balanced f ear-end 2013 EBRI/ICI 401(k) database and the 21.8 mill unds in 1998; the 1.4 million ion 401(k) plan variation. Issue Brie Consulting LLP. Availa . 201 Fro 4. m “T f, 19 no he 96 . 31 U.S. R throu 0–2 8 (Jun ble e gth irement e). at 20 ww Available 08, o w.is M >2–5 narket, Thir a cebs.org/R v at erage, www less th d Q .eb esources/Surveys/Docu u >5–10 riart .org/pd an one-fifth er 2014” (Dec f/brief of 401(k spd >10–20 ember f/eb mren i)_ ) . Avail partici ib ts/4 _06- 01kb >20–30 a p 20 ble at ants 08 enchmarkin 7with .pdf acce gsu ss to loans h >30rvey2012.p ad df For example, All among 52.0% particip 2.ants in 7% th 2.5% eir 20s, th 3.2% e avera 3.5% ge allocation 4.2% to5.1 equity an % 5.1% d balance 5.3% d fund4s .7% was 7 >309 11.8% percent of slightly mor a e likely to ho 0–2 ld at least some >2–5 equities an>5–10 d much more likely >10–20 to have high c >20–30 oncentrations in equities. At year- 25 c and passes A 10 ccount 0 o the recently hired participants holding balanced funds in 2006; the 2.0 million recently hired participants holding balanced funds r bal F target ances are ewer date parti of the cipant account bal fund, 1w 0h 1 ic to h is 50 usual ances 0 ly inhel cluded d in 401(k in 5 the 0)1 pl fund’ to ans s 1,0 at the parti nam0 e0 . cipants' current 1,001em to 5 ploy in 2007; the 2.4 million recently ,ers and 000 are net of plan l >5,0 oans. 00 20 a funds is assu stop m Cross sections chan these same pl ww nd 30 yea a w.dol. king new investments in the fun med to vary gov/ebsa/P ans account r participants in the y s of tenure with their cu ge in DF/2 co fo ear-end 2007 EBR with investor mposition ove r 70 percent 007pensionpla I/ICrr I database. o en age. A rd time ft employ all . nbulletin. plan a s beca set all er h use the sset pdf oacati d accou s. Because on t select o n eq t ion bala mo uities for of st of th nces data gr provi e targ eater plans d et-date funds was b t ers an h have an $10 d sam a small 0,0p 00. le of number Thplans e aperce sed on of us n ing tage a the Figure perce 22, >$125,000,000–$250,000,000 n Dist tage of ribution of 401(k Form parti erly the Lehm cLess Than $10,000 ipan an Brothers ts holdi ) Plans, Pa U.S. Aggregate Bond Index ng 857 no equity rticipants, a funds v , the Barc 2,n 536,729 d Assets, by Investment Opt aried lays Capi wit tal h U.S. Aggregate Bond Index age, with $151,590,330,754 70 perc i ions, 2013 s ent of participants in t com More Than $100,000 posed of s................................ ecuri$59,758 ties heir 20s, . 22 Among those * A target-dat who e fund t hel ypic d abala lly rebalanc nced fu es itnds, r s po rtfo elio cently h to becoim re e les d participants s > f $40,000–$50,000 o cused o n gr in o w201 th and m 3 were o re fo mo cused o re like n inc ly to o me as hol it appro d a hi ac gh hes and Because 401 Source: (k) plans Tabulations frwer om the e introduced EBRI/ICI 401(k) Par about 33 year ticipant-Directed Retir s em ago, older ent Plan Data Collec and longer-tenured employees would not tion Project. equity percen closed- ? eThe averag nd funds, tage for th exchange- e 401(k e assigned t traded fu ) accoun nds ( t bal arge ETFs) atnce t -dat , and unit i e fund c ends ton a ivestme lc ncrease w ulated usin nt trus ith ts (UITs). ICI s g the Mornin participant ag g eeks to star Lifecy e and enco tenure. cle Allocati urage adhere For example, on I nce ndexes toat high b b not be used to Source: T estimate t hired participants holding balanced funds in 2008; the 1.9 million recently hired participants holding balanced funds in 2009; abulations fro ime trends. Re m EBRI/ICI Participcor ant-d Di s we rectere d Re encry tir S ea m la ery n p tted pr Ra Plan ng Da eior to ta Colleicn ticlusion on Projecin t t. he data the 2.0 million recently hired base to conceal the identity loans outstanding. At www.ici.org/in Retirem EBR ent I Issu savi fo/ret ngs year e Brief hel _1 d i -e 4_q3_ is n pl r nd eans at previ gister 20 data.xls 09, t ed in the U. ous he em perce S. pl Patent and T oyers ntage or rol >5–10 Years of led radem p over i Y artici ear ar n s of k to p Office. IR ants who TA enur s are not Ie SSN: 0887 in were cluded. ?13 of 7X/90 fered loans with l 0887 ?137X/90 $ . oans 50+. outstandi 50 ng Asset Allocatio co Cv omponents may ering gov n to E ernment and c q not add to 100 percent because of rounding. uity Funds............................................................................................... orporate bonds, mortgage-backed securities, and asset-backed securities (rebalanced monthly by market ..................... 18 GICs are guaranteed investment contracts. Years of Tenure 20 assets, compared end 2013, 10 perce with nt of 57 40 percent o 1(k) planf assets among part participants in their ici20s ha pants in d th no e eir quities, com 60s. Younger pared partici with p 1 ants h 5 per ac d consistent ent of 401(k) pla ly n Figure pas50, > se $250,000,000 s t 401(k) Loan Amo he target date of the fuunts V nd, which is aried Ac us 1,115 uallyross 401(k) Pa included in t14,966, he fund’ rticipants 618 s name. .............................................................. $1,297,883,512,042 $86,719 ........... 44 Number of Plan Participants Size of Account Balance increases to given partici provi pants, t 1998 b a d 53 percent erh vary from 1999 e asset size participants holding balanced funds in 2010; the 2.3 million recently hired participants holding balanced funds in 2011; the 2. 200 for 0 yea for many partici 2001 r to year p2002 ants i plans ann d 20 th is modest. Sevent because 401(k 03eir 60s wit 2004 2005 h more t ) partici een percent of the pla 2006 han pants j 20 30 years of ten 07 oin or 2008 leave pl 2009 n us have re. ans. 5 million recently hired 2010 asse In a 201 ts of d 1ditio $2 20n 12 , the data 50,0 2013 00 or bas less, e Morning 47 percent o star fanalysi partici c p sants i of tar ng their et date fund 40s, and 51 percent asset alloca of tion (see Morni participants inn the gstar 2014 ir 60s holand note 37 for additional ding no equity funds. concentration c T Th he sam e an of the aly p sle is of parti ini cr acco ludes cipants thu e 2 n6ts in changes .4millio bala n over parnce tictiip m a d e n f .tsunds in the y compared ear-end 2013 EB wi Rth I/IC p I d aast years. At ye tabase. ar-end 2013, 77 percent of re 7cently have participated in 401(k capitalization). The index ) plans for 's total return cth onseir entire car ists of price appreciati eers. Th on/deprec iatie Rev on plus ie ncnue Act of 1 ome as a percentage of 978 contain the original inves etm d a provisi ent. on that 43 (see Morning year-end 2013, star Equities include equity 2014 participants in their 30s with more than tw ). funds, company stock, and the equity Num portion of balanced funds. Funds include mutual funds, bank colle ber of Participant o to five years of s in Plan tenure had an average 40 ctive trusts, 1(k) account ethical standards, promote public understanding, and otherwise advance the interests of funds, their shareholders, directors, of employers Components and memploy ay not add ee to s total , but because were of co roundi ded ng. so that both could be tracked by researchers over multiple years. Data Note: Component participants holding balanced funds in 2012; and the 2.9 million recently hired participants holding balanced funds in 2013. s may no t add to the total in the first co lumn because o f ro unding. “ Funds” include mutual funds, bank co llective trusts, life ticked Figure up to 21 percent 23, Sour Average Asset ce: Tabulations f an rom Allocation of 401(k) Account d EBRI/ICI Par has remain ticipant- ed Direc at that ted Retirem level ent Plan s, frby Partic om year-end 2010 throu Data Collecipa tion n Prt ojAge a ect. nd Inves gh year-e tment O nd 20 ptions 13 (Fi ......................... gure 47). 23 All 72,676 26,421,360 $1,912,462,296,033 $72,383 higher alblocations to balanced funds, particularly to target-date funds. A target-date, or lifecycle, fund pursues a long- Source: life insurance separate accounts, and any T babulations from EBRI/ICI Participant- pooled inv Directed estment Retiremproduct primarily ent Plan Data Collec invested in the security tion Project. indicated. Asset Allocatio RoSour w per ce: ceT nt abulations ag n es of 401(k) may fr om no t EBRI/ICI Par addPlan P to 1 00 pe tic articipa r ipant- centD bir ec ecn au ted ts se Witho Retir o f rem o un ent u dit Equity Funds ng Plan Data . Collection Pr ............................................................. oject. ...... 21 Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. and a contains only discus nsion other Source: ). 2 t6 h T p abulations e acco Row percentages may not add to 100 percent because of rounding. ercent from EBR unt hav bal e I/IC p a I Participant-D nces h lan assets eld in irected betw t Rh etirement e een 401 Plan D $ (k) pla 250 ata C ,001 n ollection s an at partici Project. d $1,2p50,0 ants’ curr 00 (Fig ent ure 3 employers. R ). etirement savings held The percenta Note: T ge of he tenur 4e var 01(iable k) pa is gener rticipants ally years holdi working at c ng no e urrent q em uity ploy f erund , and s a thusl m so vari ay oversed tate with years of ten partic ure—partici ipation in the 401( pants k) plan.with five or fewer hired pa ins N uo ranc te: rticipa “Funds” e separat nts holding incl e ac ude co mu unt tual ba s, and any funds, lanced f bank poo unds col led inv lecti e v had mor e sttrusts, ment pro life educ th insurance ta pn rim 9arily 0 separate perce investn accounts, et o d inf t the he s and ec ir acco ur any ity ind pool unt iced at bala ed. investm The t nce e enur nt inves product e variabl ted i pre is ima n gene r ily balanc inve rally ste e d d became Internal Revenue Code Sec. 401(k). The law went into effect on January 1, 1980, but it was not until SoFigure urces: Tabul 51, Sbalance of nea ou Note: T ati r Loa ceons from S : T ource: a he n bu s from tenur laTabul tio E nB e var s f Rati rr Io /ly $25,000, compared with a I401(k m io C able E n I P sB fa R r is om rti I gener /I) C c E iIpant-D Plans Tended P Ba R ally rtic I/IC ip y irear a I P ected R nt-D a srti w ire c or ic pant-D k te e ing at c ti drem R to Be eitire re e ur nt cme ted r P ent n n lSmall an D R t P average em elti aploy rem n a D ta C ......................................................................... er a ent ta , o C and lP 401( le o lan lle cti thus c o D tio n P a k) n m ta P ray account balance of nearly $ oj C ro ect and U o over je llc et. cti sto ate n Py .rS ear oj.ect. D s epartm of partice ipation nt of Labor. in the 401( 250,000 among participants k) plan. ................ 44 Note: The tenure variable is generally years working at current employer, and thus may overstate years of participation in the 401(k) plan. Note: Average and median 401(k) loan amounts are calculated among participants with 401(k) loans at year-end. NN oote: Percentages te: "Equity funds may ” not incladd to 100 percent ude mutual funds because , bankof co rounding. llective trusts, life insurance separate acco unts, and any po oled investment product Note: “Balanced funds” include mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investment product primarily © 2014, Employee Benefit Research Institute ?Education and Research Fund. All rights reserved. year in Source: s the wosecuri rking at Tabulations from ty i ndi current cated. em plo EBR yeI/IC r, and t I Participant-D hus may oir vect ersed tatR e y eea tirem rs o ent Plan D f participat ata ioC n in t ollection he 401 Project. (k) plan. Note: The median account balance at year-end 2013 was $ 18,433. primarily inv invested in a mix of equities and fixed-income securities. ested in equities. In additio n, 401(k) participants may ho ld equities thro ugh balanced funds o r co mpany sto ck ?see Figure 30 fo r in their 60s with more than 30 years of tenure. Note: The tenure variable is generally years working at current employer, and thus may overstate years of participation in the 401(k) plan. ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org Issue Bri Issue Bri Issue Bri Issue Bri Issue Bri Issue Bri Issue Bri Issue Bri Issue Bri Issue Bri Issue Bri Issue Bri Issue Bri Issue Bri Issue Bri Issue Bri Issue Bri Issue Bri Issue Bri Issue Bri Issue Bri Issue Bri Issue Bri Issue Bri Issue Bri * Assets do n e e e e e e e e e e e e e e e e e e e e e e e e efffffffffffffffffffffffffot • 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 add to the total b2014 • No. 408 2014 • No. 408 2014 • No. 408 2014 • No. 408 2014 • No. 408 2014 • No. 408 2014 • No. 408 2014 • No. 408 2014 • No. 408 2014 • No. 408 2014 • No. 408 2014 • No. 408 2014 • No. 408 2014 • No. 408 2014 • No. 408 2014 • No. 408 2014 • No. 408 2014 • No. 408 2014 • No. 408 2014 • No. 408 2014 • No. 408 2014 • No. 408 2014 • No. 408 2014 • No. 408 2014 • No. 408 ecause of rounding. 15 54 55 31 47 18 46 50 45 49 52 53 28 32 48 25 51 11 21 6 2 5 8 3 4 the distributio n o f 401 (k) acco unt balances to equities. 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 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 Issue Issue rch report f 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 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 December December om the EBRI Education and Re 2014 2014 2014 2014 2014 2014 2014 2014 2014 2014 2014 2014 2014 2014 2014 2014 2014 2014 2014 2014 2014 2014 2014 2014 2014 2014 2014 2014 2014 • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 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. No. No. 408 408 408 408 408 408 408 408 408 408 408 408 408 408 408 408 408 408 408 408 408 408 408 408 408 408 408 408 408 search Fund © 2014 Employee Benefit Research Institute 40 10 26 27 34 14 22 19 39 44 20 23 24 13 36 38 33 41 17 42 29 12 16 37 30 43 35 9 7 Figure 34 Asset Allocation Distribution of P Fi Figure 24 gure 40 articipant Account Balance to 37% Company Stock in 401(k) Plans With Company Stock, by Participant Age Average Asset Allocation of 401(k) Accounts, by Participant Salary and Investment Options Average Asset Allocation of 401(k) Accounts, by Participant Age Among Figure 33 41% $3,902 Figure 39 a,b a Percentage of Participants, 2013 Percentage of account balances, 2013 401(k) Plan Participants With Two or Fewer Years of Tenure Asset Allocation Distribution of 401(k) Participant Account Balance to Balanced Funds, by Tenure 42% Asset Allocation Distribution of 401(k) Account Balance to Percentage of Account Balance Invested in Company Stock b a,b Percentage of account balances 39,% 1998 and 2013 $4,400 Percentage of Participants, 2013 d Age Group Zero 1–10% 11–20% 21–30% 31–40% 41–50% 51–60% 61–70% 71–80% 81–90% 91–100% GICs /Stable- Balanced Funds Among Recently Hired Participants, by Participant Age Equity Target-date Non-Target-date Bond Money Company Dec-02 39% 20s 69.9% 5.9% 3.9% 3.4% 2.8% 3.4% 2.0% 1.2% 0.9% 0.6% 6.0% b c a,b Salary Funds Funds Percentage of Account Balance Invested in Balanced Funds Balanced Funds Funds Funds Value Funds Stock Balanced Funds Percentage of Recently Hired Participants, Figure 29 2013 Jun-03 30s 55.5% 11.9% 7.8% 5.3% 3.8% 3.2% 2.5% 1.7% 1.3% 1.0% 6.0% d Tenure (years) Zero 1–10% 11–20% 21–30% 31–40% 41–50% 51–60% 61–70% 71–80% 81–90% 91–100% Plans Without Company Stock, GICs, $3,824 or Other Stable-Value Funds Non-Target- 40s 50.6% 13.1% 8.6% 6. 112% % 4.4% 3.5% 2.7% 1.9% 1.4% 1.1% 6.5% Average Asset Allocation for 401(k) Plan Participants Without Dec-03 Percentage of Account Balance Invested in Balanced Funds d 0–2 33.7% 2.4% 2.2% 2.1% 1.5% 1.6% 1.9% 1.2% 1.3% 1.1% 51.1% $20,000–$40,000 43.9% 23.7% 8.8% 10.3% 9.9% 50s 48.3% 14.6% 8.9% 6.1% 4.3% 3.4% 2.8% 2.0% 1.5% 1.1% 7.0% Equity B Target-dat 10%e date balan-ondMoneyGICs and Other Company Equity Fund Balances, by Participant Age or Tenure Age Group Zero 1–10% 11–20% 21–30% 31–40% 41–50% 51–60% 61–70% 71–80% 81–90% 91–100% >2–5 36.7% 3.5% 3.0% c 2.8% 2.0% 2.0% 2.2% Jun-04 1.5% 1.6% 1.5% 43.4% 60s >$40,000–$60,000 50.9% 13.6% 45.0%7.8% 20.9% 5.5% 3.9% 10.5% 3.0% 10.9% 2.6% 9.6% 1.9% 1.4% 1.2% 8.2% 9% Age Funds Total funds ced funds Funds Funds Stable-Value Funds Stock $3,659 a 20s >5–10 >$60,000–$80,000 32.4% 42.6% 1.8% 5.3% 47.6% 1.7%4.4% 1.6% 18.4% 3.9% 1.2% 2.6% 10.3% 1.3% 2.3% 11.5% 2.1% 2.1% 8.7% 1.2% 1.6% 1.2% 1.7% 1.7% 1.0% 31.6% 54.6% All 53.6% 12.4% 7.7% 5.5% 3.9% 3.3% 2.6% 1.8% 1.3% 1.0% 6.7% 8% Percentage of account balances, 2013 Dec-04 Group 1998 2013 1998 2013 2013 2013 1998 2013 1998 2013 1998 2013 1998 2013 Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. >10–20 >$80,000–$100,000 48.8% 7.3% 50.9% 5.7% 15.9% 4.8% 3.1% 10.1% 2.7% 11.9%2.2% 7.5% 1.7% 2.0% 2.8% 18.9% 30s 32.2% 2.4% 2.3% 2.3% 1.6% 1.6% 1.9% 1.4% 1.4% 1.2% 51.6% 8% a c 20s 66.9% 28.1% 7.4% 55.0% 41.1% 13.9% 5.1% 4.5% 4.0% 1.6% 3.7% 1.0% 10.5% 4.1% The analysis includes the 9.1 million participants in plans with company stock at year-end 2013. Jun-05 GICs /Stable- Target-DateNon-Target-Date Bond Money Company >20–30 >$100,000 54.3% $3,708.4% 0 54.7% 6.0% 12.5% 5.0% 3.3% 9.0% 2.9% 12.5%2.4% 6.8% 1.8% 1.5% 1.3% 13.1% 40s 34.4% 2.7% 2.6% 2.5% 1.7% 1.7% 1.7% 1.3% 1.3% 1.1% 49.0% b 7% Row percent 30s ages m 67. ay 8% not add up t 35.1% o 100 per b 8.0% cent because of 47.7% roundi 37.ng. 8% 10.0% 5.1% 6.1% 4.1% 1.9% 3.2% 1.3% 9.4% 3.1% Funds All Balanced Funds 48.0% 18.9% Funds 7.5% Funds Value Funds 12.4% Stock 6.3% Other Unknown >30 59.0% 8.4% 5.4% 4.4% 3.0% 2.4% 1.9% Dec-05 1.3% 1.2% 1.2% 11.9% 50s 35.5% 2.8% 2.4% 2.5% 1.7% 1.7% 1.7% 1.1% 1.2% 1.0% 48.3% 40s 64.5% 39.0% 9.7% 40.4% 31.6% 8.8% 5.9% 7.6% 5.1% 2.3% 4.4% 1.7% 8.0% 3.4% d 15% All Age Group 42.5% 5.1% 4.1% 3.6% 2.4% 2.2% 2.1% 1.5% 1.6% 1.7% 33.1% Plans With GICs and/or Other Stable-Value Funds 60s 39.4% 2.7% 2.2% 2.2% 1.4% 1.6% 1.6% 1.0% 1.0% 0.9% 46.0% 50s 60.5% 37.3% 11.3% 36.2% 28.1% 8.1% 6.6% 10.2% 5.9% Jun 2.-06 8% 6.7% 3.9% 6.5% 3.3% $3,832 20s 61.1% 18.7% 2.7% 15% 2.2% 1.9% 5.5% 5.2% 2.2% $20,000–$40,000 35.6% 26.2% 6.5% 9.4% 1.4% 16.4% c All 33.7% 2.4% 2.2% 2.1% 1.5% 1.6% 1.9% 1.2% 1.3% 1.1% 51.1% 60s 50.0% 34.6% 12.1% 31.9% 24.3% 7.7% 8.7% 13.9% 7.8% 3.7% 13.3% 5.3% 5.7% 3.2% Percentage of Account Balance Invested in Target-Date Funds Dec-06 30s 58.0% 14.6% 4.3% 4.2% 4.0% 7.1% 4.8% 2.6% >$40,000–$60,000 38.8% 18.9% 17% 10.0% 10.5% 1.6% 14.4% All 64.8% 36.1% 9.1% 41.1% 31.9% 9.2% 5.7% 8.5% 4.9% 2.4% 4.6% 2.7% 8.6% 3.3% Tenure (years) Zero 1–10% 11–20% 21–30% 31–40% 41–50% 51–60% 61–70% c 71–80% 81–90% 91–100% 40s 47.8% 13.2% Percentage of Account Balance Invested in Target-Date Funds 6.1% 6.4% 6.8% 10.0% 6.7% 2.7% >$60,000–$80,000 43.6% 15.1% 9.2% 10.6% 1.8% 13.9% 18% Jun-07 $3,893 Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. 0–2 48.9% 1.3% 1.2% 1.3% 0.9% 1.1% 1.2% 0.9% 0.9% 0.8% 41.6% a 50s 37.3% 11.8% 8.0% 8.3% 12.9% 11.5% 6.9% 2.8% Age Group >$80,000–$100,000 Zero 1–10% 45.7% 11–20% 21–30% 13.5% 31–40%9.5% 41–50% 10.1% 51–60% 61–70% 1.8% 71–80% 14.0% 81–90% 91–100% 21% The analysis is based on samples of 1.2 million participants with two or fewer years of tenure in 1998 and 4.4 million participants with two or fewer years of tenure in 2013. Dec-07 >2–5 52.1% 2.1% 1.8% 1.7% 1.3% 1.3% 1.4% 1.0% 1.1% 1.1% 35.1% 60s 30.0% 10.2% 10.7% 10.7% 19.6% 10.0% 5.8% 2.5% b >$100,000 51.3% 12.6% 22% 6.1% 9.1% 1.4% 14.2% 20s 48.6% 0.9% 0.9% 0.9% 0.7% 0.9% 1.3% 0.8% 0.8% 0.7% 43.6% Minor investment options are not shown; therefore, row percentages will not add to 100 percent. Percentages are dollar-weighted averages. >5–10 d 59.4% 3.1% 2.4% 2.1% 1.5% 1.4% 1.3% 1.1% 1.2% 1.3% 25.1% $3,661 Jun-08 c All All 40.8% 46.0% 12.3% 16.2% 7.8% 7.2% 7.8% 12.1% 8.3% 10.1% 1.7% 15.5% 6.4% 2.6% 30s A target-date fu 46.7% nd typical1.3% ly rebalances its portfol 1.4%io to become l 1.4% ess focused on growth 1.0% and more focu 1.1% sed on income as i 1.4% t approaches an 1.0% d passes the target date of th 1.0% e fu 0.9% nd, which 42.8% >10–20 65.7% 4.4% 3.0% 2.4% 1.7% 1.6% 1.3% 1.2% 1.6% 2.5% 14.7% is usually included in the fund’s name. Plans With Company Stock Tenure (years) Dec-08 40s 49.3% 1.6% 1.5% 1.5% 8% 1.0% 1.2% 1.2% 0.9% 1.0% 0.8% 40.2% >20–30 72.0% 5.0% 3.0% 2.4% 1.7% 1.6% 1.4% 1.2% 1.0% 0.9% 9.6% d Figure 35 GICs are guaranteed investment contracts. $4,089 12% $20,000–$40,000 0–2 63.5% 33.4% 15.0% 17.6% 5.2% 5.5% 3.4% 2.8% 9.3% 3.5% 5.7% 5.1% 24.4% 1.5% 50s 50.4% 1.6% 1.3% 1.4% 1.0% 1.2% 1.1% 0.8% 0.9% 0.8% 39.6% Jun-09 >30 75.5% 5.1% 2.7% 2.1% 1.4% 1.2% 1.0% 0.7% 0.7% 0.8% 8.7% a b Note: “Funds” include mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investment product primarily invested in the security indicated. >$40,000–$60,000 >2–5 58.2% 32.3% 15.1% 20.7% 115.8% % 6.8% 4.1% 4.4% 9.1% 5.1% 6.0% 5.1% 19.0% 1.9% Many Recently Hired 401(k) Plan Participants Hold Balanced Funds 60s 54.5% 1.5% 1.2% 1.2% 0.8% 1.0% 1.0% 0.6% 0.7% 0.6% 36.9% All 58.8% 3.0% 2.2% 1.9% 1.4% 1.3% 1.3% 1.0% 1.1% 1.3% 26.6% Dec-09 >$60,000–$80,000 >5–10 50.1% 33.3% 14.0% 20.7% 12 6.5% % 6.5% 6.3% a 6.9% 8.5% 7.2% 6.2% b 6.0% 17.9% 2.6% Percentage of recently hired 401(k) participants holding balanced funds, 1998–2013 $4,167 All 48.9% 1.3% 1.2% 1.3% 0.9% 1.1% 1.2% 0.9% 0.9% 0.8% 41.6% >$80,000–$100,000 >10–20 39.9% 39.1% 11.8% 14.4% 7.5% 8.9% 8.7% 10.5% 8.7% 10.9% 6.9% 6.9% 14.2% 3.3% Percentage of Account Balance Invested in Non-Target-Date Balanced Funds Jun-10 12% Age >$100,000 41.3% 11.3% 7.3% 9.8% 5.7% 14.6% >20–30 29.0% 11.4% Percentage of Account Balance Invested in Non-Target-Date Balanced Funds 8.4% 9.3% 16.2% 14.1% 8.2% 3.1% Group Tenure (years) 1998 1999 Zero 2000 1–10% 2001 200 11–20% 2 2003 21–30% 12% 2004 31–40% 2005 41–50% 2006 2051–60% 07 2008 61–70% 2009 71–80% 2010 2011 81–90% 2012 91–100% 2013 Dec-10 All >30 21.5% 36.9% 10.4% 17.9% 9.4% 4.8% 10.9% 23.4% 8.4% 14.5% 6.5% 6.5% 18.8% 2.9% $3,889 20s 27.0% 28.3% 27.1% 27.3% 32.7% 35.1% 38.9% 43.5% 48.5% 51.1% 63.6% 64.1% 69.6% 72.0% 70.8% 67.6% Age Group 0–2 Zero 83.6% 1–10%1.7% 11–20% 1.4% 21–30% 1.1% 31–40% 0.7% 41–50% 0.5% 51–60% 0.6% 61–70% 0.4% 71–80% 0.4% 81–90% 0.3% 91–100% 9.2% d d Figure 41 Jun-11 30s 29.0% 31.0% 28.3% 26.5% 33.1% 36.2% 39.8% 42.8% 47.9% 54.2% 59.6% 61.2% 63.0% 68.1% 69.5% 67.8% All Plans With Company Stock and GICs 40.8% 12.3% and/or Other Stable-Value Funds 7.8% 7.8% 12.1% 10.1% 6.4% 2.6% 20s >2–5 82.9% 82.9% 1.4% 2.4% 1.1%1.7% 0.9%1.4% 0.5% 0.8% 0.5% 0.7% 0.8% 0.8% 0.4% 0.5% 0.4% 0.5% 0.4% 0.3% 7.9% 10.8% 11% 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% 65.6% Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. Recently Hired 401(k) Plan Participants Tend to Be Less Likely to Hold Company Stock $20,000–$40,000 35.9% 7.3% 12.5% 4.7% 1.4% 15.4% 17.0% >5–10 81.0% 3.7% 2.8% 2.1% 1.2% 0.9% 0.9% Dec-11 0.5% 0.5% 0.5% 5.9% 30s 84.1% 1.8% 1.4% 1.1% 15% 0.7% 0.5% 0.6% 0.4% 0.4% 0.3% 8.5% a $3,972 50s 30.9% 34.9% 32.1% 29.2% 33.9% 35.5% 40.3% 43.3% 47.8% 53.4% 58.0% 58.7% 59.1% 64.2% 66.7% 64.5% Row percentages may not add to 100 percent because of rounding. Percentages are dollar-weighted averages. >$40,000–$60,000 34.7% 6.8% 15.0% 5.1% 1.3% 16.0% 18.8% Percentage of recently hired participants offered and holding company stock, by participant age,1998–2013 >10–20 80.3% 4.7% 3.6% 2.8% 13% 1.5% 1.1% 0.9% 0.5% 0.4% 0.4% 3.8% 40s 83.8% 2.0% 1.6% 1.3% 0.7% 0.6% 0.6% 0.4% 0.4% 0.3% 8.5% b Jun-12 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% 60.6% A target-date fund typically rebalances its portfolio to become less focused on growth and more focused on income as it approaches and passes the target date of the fund, >$60,000–$80,000 35.5% 6.7% 14.1% 5.2% 1.5% 16.1% 18.3% >20–30 79.5% 5.3% 3.8% 103.0% % 1.7% 1.3% 0.9% 0.5% 0.4% 0.4% 3.2% AA ll 50s ge G 28.9% roup 19 31.3% 83.8% 98 1929.1% 99 1.9% 2000 27.4%20 1.5% 01 33.0% 200235 1.3% .4% 2003 39.3% 200 0.7% 4 42.8% 2005 0.6% 47.6% 2006 52.7% 20.6% 007 59. 2008 9%0.3% 20 60.09 9% 20 0.3% 63 10 .0% 20 67.5% 110.3%2012 68.6% 8.4% 2013 66.3% which is usually included in the fund’s name. Dec-12 >$80,000–$100,000 $3,619 37.8% 6.3% 12.8% 5.3% 1.6% 15.3% 17.7% c >30 80.8% 4.9% 3.4% 2.7% 1.7% 1.2% 0.9% 0.5% 0.4% 0.4% 3.0% Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. 11% 60s 20s GICs are guaranteed investment contracts. 60.8 83.8% % 61.1% 1.8% 60.5% 58.1.4% 1% 53.9% 1.2% 49.6% 49. 0.7% 8% 45.4%0.6% 40.0% 35 0.7% .4% 32.9%0.3% 32.3% 30 0.4% .3% 26.2% 0.3% 23.0% 2 8.8% 7.9% a >$100,000 39.5% 4.8% 10.4% 5.2% 2.8% 12.4% 18.9% d The analysis includes participants with two o r fewer years of tenure in the year indicated. All 81.6% 3.5% 2.6% 2.0% 1.1% 0.9% 0.8% Jun-13 0.5% 0.4% 0.4% 6.1% The analysis includes the 13.8 million participants with no equity funds at year-end 2013. 10% All 30s 61.9 83.6% % 62.3% 1.7% 61.6% 60.1.4% 0% 57.2% 1.1% 53.3% 52. 0.7% 3% 47.6%0.5% 43.6% 40 0.6% .4% 37.4%0.4% 36.2% 33 0.4% .6% 30.0% 0.3% 26.4% 3 9.2% 0.7% b All 39.7% 7.3% 9.2% 5.5% 2.2% 15.2% 15.4% "B alanced funds” include mutual funds, bank collective trusts, life insurance separate acco unts, and any po o led investment pro duct primarily invested in a mix o f equities and fixed-income securities. 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. $3,785 Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. Dec-13 40s 59.8% 60.6% 59.5% 58.8% 55.9% 52.6% 52.0% 47.3% 43.6% 40.7% 37.9% 37.0% 34.4% 31.4% 27.5% 31.3% a Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. The analysis includes the 26.4 million 401(k) plan participants in the year-end 2013 EBRI/ICI database. a The tenure variable is generally years working at current employer, and thus may overstate years of participation in the 401(k) plan. 4% The analysis includes the 4.4 million recently hired participants (those with two or fewer years of tenure) in 2013. a b 50s 57.6% 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% 30.8% Minor investment options are not shown; therefore, row percentages will not add to 100 percent. Percentages are dollar-weighed averages. Row percentages may not add to 100 percent because of rounding. Jun-14 b 7% Row percentages may not add to 100 percent because of rounding. b c Salary information is available for a subset of participants in the EBRI/ICI database. A target-date fund typically rebalances its portfolio to become less focused on growth and more focused on income as it approa 60s 54.1% 55.5% 53.6% 55.7% 51.0% 49.5% 47.8% 43.9% 40.4% 38.4% ches and passes the target date of the fund, which is usually included in 38.7% 40.5% 36.8% 30.8% 26.7% 30.0% $3,858 c c 5% Dec-14 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 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 the fund’s name. All 60.5% 61.0% 60.0% 58.7% 55.3% 51.6% 51.0% 46.3% 42.0% 38.7% 36.2% 35.5% 33.0% 29.3% 25.7% 29.9% name. which is usually included in the fund’s name. 4% Note: “Funds” include mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investment product primarily invested in the security indicated. The tenure variable is So urce: Tdabulations fro m EB RI/ICI P articipant-Directed Retirement P lan Data Collection P roject. Note: “Funds” include mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investment product GICs are guaranteed investment contracts. primarily invested in the security indicated. 4% generally years working at current employer, and thus may overstate years of participation in the 401(k) plan. $3,973 Note: The analysis includes 401(k) plan participants with two or fewer years o f tenure in the year indicated and in a plan o ffering co mpany stock as an investment option. Note: “Funds” include mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investment product primarily invested in the security indicated. 4%