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Key Findings:

  • The bulk of 401(k) assets were invested in stocks. On average, at year-end 2019, 68 percent of 401(k) participants’ assets were invested in equity securities through equity funds, the equity portion of balanced funds, and company stock. Twenty-nine percent of assets were in fixed-income securities such as stable value investments, bond funds, money funds, and the fixed-income portion of balanced funds.
  • More 401(k) plan participants held equities at year-end 2019 than before the financial market crisis (year-end 2007), and most had the majority of their accounts invested in equities. For example, about two-thirds of participants in their twenties had more than 80 percent of their 401(k) plan accounts invested in equities at year-end 2019, up from less than half of participants in their twenties at year-end 2007. Overall, nearly 95 percent of 401(k) participants had at least some investment in equities at year-end 2019.
  • At year-end 2019, 87 percent of 401(k) plans, covering 87 percent of 401(k) plan participants, included target date funds in their investment lineup. At year-end 2019, 31 percent of the assets in the EBRI/ICI 401(k) database were invested in target date funds and 60 percent of 401(k) participants in the database held target date funds. Also known as lifecycle funds, these funds are designed to offer a diversified portfolio that automatically rebalances to be more focused on income over time.
  • 401(k) participants’ investment in company stock continued at historically low levels. Five percent of 401(k) assets were invested in company stock at year-end 2019, in line with recent years. This share has fallen by 72 percent since 1999 when company stock accounted for 19 percent of assets.
  • A minority of 401(k) participants had loans outstanding. At year-end 2019, 18 percent of all 401(k) participants who were eligible for loans had loans outstanding against their 401(k) plan accounts, down slightly from year-end 2018. Loans outstanding amounted to 8 percent of the remaining account balance, on average, at year-end 2019, down 2 percentage points from year-end 2018, and well below their historical average. Loan amounts, on average, also decreased in 2019.
  • The year-end 2019 average 401(k) plan account balance in the database was 10.2 percent higher than the year before, but this may not accurately reflect the experience of typical 401(k) participants. Changes in a participant’s account balance are primarily due to the combination of contributions, investment returns, and withdrawal and loan activity. To understand changes in 401(k) participants’ average account balances, it is important to analyze a sample of consistent participants. As with previous EBRI/ICI updates, analysis of a sample of consistent 401(k) plan participants is expected to be published later this year.
  • The average 401(k) plan account balance tends to increase with participant age and tenure. For example, at year-end 2019, participants in their forties with more than two to five years of tenure had an average 401(k) plan account balance of about $43,000, compared with an average 401(k) plan account balance of more than $330,000 among participants in their sixties with more than 30 years of tenure.

Thanks to Adam Bensimhon, EBRI Data Compliance and IT Director, for data tabulations. And, thanks to Jack VanDerhei, former EBRI Director of Research, for his collaboration over the past 25 years on this project.

Figure 18 Figure 15 401(k) Plans' Loan Offering and Participant Use by Plan Size Figure 11 Figure 5 Figure 17 Figure 21 Exposure to Equities Incre Fia gs ue re d 1 A 4mong 401(k) Participants Figure A2 401(k) Plan Account Balances Increase With Participant Age and Tenure Figure 9 Percentage of 401(k) Plans Offering Loans by Plan Size, 2019 Domestic Stock and Bond Market Indexes 401(k) Plan Loan Activity Varies w ith Participant Age, Tenure, and Account Balance ..............................................22 US A B a A As H d r told ppendi a d y s d D it e e • e y ion, e a t n, , p r P - Alloca ae Sa e Mone rnd v ttm e a rra rx e ,2019 ia h, nt a y tt nd ion a io Ja fun of , n cMic L k 18 da a rs c Va ound b n A ha p or d nD onsi s ee , rs P lc E e e B e ta m r st his n o h t rt p g t e A of icipant loy d of i, aa lv la tn. 40 o e e hose nd e rc a 20 1( B a g St k e e 10 t fun ) ne i e Ag to v p e . e fit n a nds “ d e n B A r s d s Se t D ic La ti ipa ook a e o s ss si ctc ur nt g . ror ne i20 it s b try e w d u 20 P spon A rit t tiv d .i o h o m a “m a W tn ini d e ca ha - co w int st Se ef it ss tr a c a h a D 4 tin a ttor ion. oe 0 o g 1 loa s C Re e ( st k 20 (ta ns tonsi ) ir he b 1 e P le 2. P ha m a old ssh e td re nt t re a nt loa iv ir rc P e a ti P la ns the p p e an I r a r ic P tout p n ic e e n an it .c p r st si tom A a ic on a tc ipa ion in nding ec PA nt o la ftu , n B e , 40 tn rhe d E t ull ow 1( RI low e kn slight SA ) tin, P e.” la r A t ns Ihe b nv st ly G e r ae fr a st vne c om e m tr r a of ea g nt t e e )?, A Tha bout nks t o tA he da m E B BeR ns Iim /IC hon I, Da EBRI t abas Data Ce om pliance and IT Director, for data tabulations. And, thanks to Jack 401(k) Plan Asset Alloc4a 0t 1ion (k) L, oa Ac n Bc ao lau nn cets Balances, and Loan Target Date F 1unds' 401(k) Market Share Between 2007 and 2019 Figure 4 Ag Ae ve C ra og m ep 4o D 0si 1 is (ti k) to ri n p b la u on t f iSel a occo n ecte ou fn 4 t d 0 b 1 a 401 ( la kn )ce (k) Pl a b Pl y nan s p, a P rA tia ci cco rt pi ac n u itn p a t agn B et al s aan , n d a ce n te d nC urateg e, 20 o1 r9 ies 12 40, 41 Month-end level, December 2007 to December 2 13021 14 w ind ith Liv ife iinv dsua ty ele ls s eto ff in fu e r c nd a the tiv gs e e s.ma e JAs agnu inta s ro ea up t ry in as ll 1, a o s c ho p a 2019, re tion uld de te no to a pl rmine t eb qe an adm uiti inc de ris s lud fo k e r le id ni ta v in e s rg l tr the e aato t nd d c aF g r o te ha e un ine g fu t u s ra nd o the rfll e s y a c w 2 us o tiv ae pt se w b ip o a o as n o rd rticip ed s fs o iuc n a nc nts Mo h luding o a .rning ” s H “coow s ns e ta r v er e rv ea r, x a na c tiv the lly u eding the s ,fo is ” “mod rm of ta scrg e he ra r ed e t te ule qui d,a ” te o n rre e fu e m d nd e ed nt to y te enur ar • -e e nd (tC 20 C St he 20 om ha a 05 b long 19 nge le p For a (v ny Fi s in 401 e ar m g lue It ur ns he 55 e p t i0 rtt 19 od e ut 0 A (nur k). e ) uc nnu P Re e tla s, suc of sea n Ac a H l Re the ow rB c h ch P p o a e p a or unt v a l s g a e e r tt s (V r rn ic , spe ua Bc not ipa are la e a crnt tnt nc si t iv ao , ll p e on e e e t s, B he 16, d a 1.1) a 2010 r inv tlow lic no. aipa . en st e W –c r2 (No 20 nt m ae tsh he e s ha 18 d nt ingt .” a F vcv v e u o I e e m on, C nt n ra a Ibrd c g e Re ac D e s rc e ))C tsea . ss ,s (GI b : A a y US t v nd ro a cT ila h P C 40 D as e c b e )1( n c e le pount ra u k spe a a r)r tnd tm p e w c la e b tot w iv n loa nt ala w he e of nc .ic 26 r ns i.or e L st , a — a ( no. b tb g he or fa le /pd , c 6, a highe v tE or f/ a m lue p ing nd p eloy r r16 fun E in a tB e he -e RI 02. d ll 401 s, B a Ic e pdf ss c ne ount are ue .fit ( k s ) VanDerhei, former EBRI Director of Research, for his Fi g colla ureb or 7 ation over the past 25 years on this project. Figure A1 highlights the distribution of 401(k) plans in the EBRI/ICI database by number of plan participants or by plan Average Loan Balances ................................ Average and................................ median loan balance ................................ s for 401(k) .....................................22 As in previous years, t he database for year-end 2019 shows that partic1 ipants’ asset allocation varied considerably with Activity in 2019 Percentage of total 401(k) market, year-end 440 Figure 16 Percentage of 401(k) p articipants by age of participant, year-end 2007 and year-end 2019 Percent 40 age 1(k of ) P 43 part artic icipan ipan tst s w it R h eac pre coun sen t tbala a Rnc an es g e in osfpec Job ified Terang nure es s, 2019 The EBRI/ICI Participant-DirectA eds Re se tir ts em b ey nt I n Pla vn D esa tm ta e Colle nt c O tion P pt1io roje ns c,t 2 ga 0t1 he 9rs information about individual “a a ma sg sk e ge t re a the sllsoiv that c a e ad ” tion jus in the tme the (se e ir e nt m na Mo is plo me rning no ye to lon e si f tnd g a ie r ric r s2019 t o a re te qb uire the tai an d n a pl d fu . no Us ndte ing ’san l 36 ris Na k fo o t le an pr ion r va ed a l.d l L iti C io io fe o rmp na to sty le r le d ns e is fu q a ction us ue ndss s ion ting a ha g Se urve )n . era y lld ya r a ta dshi re a inc nd p d lud his ie s to d tr r iin ic ba u the l tion re la no tions (nR –e ta g hip rg . Se se ta c d tion nd ate tre nds p ba ar la tic nc ipa e, nt r B Se te he rs w p ie co ur flow r, t it it no. eh a yde A rand 51 d s one tm he 4 (Oc w ini a its v hout t c era tra ob t ate g ion (Ma g e e loa or r)). y n a .A ( Fi vc ra g c cila ur h) ess b e . le A in t 20 vaa )the ila . w Ov b w d le e w a rta .ic a atll, lo b i.or ase, g a/pd n only s fr f/om p15 er 26 40 pe-1( r06 ck e.p )nt p d la ha f a ns d nd loa tew nde ns ww d o. ut e tb o st rb i.o ae nding rsm g/ca ont ll, w ate y nt it eh a /wha ar- esi nd tza -db 2019 oe le s-. On 29 EBRI/ICI 401(k) Database Represents a Wide assets. Figure A2 highlights the combinations of investment options offered in the 92% 401(k) plans in the EBRI/ICI 420 Snapshot p a orft ici YP p ee a a rn r- ce ts E nw tn aig d th e 4 4 o0 f0 p 1 1a ( (k) k rti)ci lP o pa a la n ns, tn s, A 1 2 9 c 0 9c 1 89 o –u 20 n1t9 Balances age. Younger participants tended to be more invested in equity funds and balanced funds, 90% while 90% older participants Appendix ................................................................................................ 88% Years of Tenu ................................ re .............................25 2 Figure 8 Asset Allocation Distribution of 40 87% 1(k) Participant Brady, Peter, and Michael Bogdan. 2016. “A Look at Private-Sector Retirement Plan Income After ERISA, 2015.” ICI 400 Percentage of Accou P n e tr B ce aln atn a cg ee I no vfe s atct ed iv ie n 4 E0 qu 1i(tk) ies plan participants by years of tenure, 2019 e bv aid lae nc 40 nt e1( d in 1. k fu the )401( nd pla Form cn p k a)te -1( a gr5500 o d try ic )(ipa .3) (dnt iv a)ta (a E)) ,c c EB ount . [ REmp I a s. A nd ha s of IsCI is a eD d sd tima ee ce d.m te ] b e the r 31 nu , mb 201 er 9, of the ac tiv EB eRI 401( /ICk I )d p aa trticip abase ants inc to lude bed ast bo aut tis t60 ica mil l lion in 2019. By Sarah Holden, ICI; Steven Bass, ICI; and Craig Copeland, 1 EBRI 2 m ava ejror • a g ite y, Ot c w of ov onsi w he e e w ligib rrs .d ttis he e ol.g nt le t he p -40 ov p a a st r/s 1( r e tsi 24 ic it kd e ) ipa ua s/ p ye a d tl fo ion a rolg tric s, a r-ipa ov in ot- m /f he nt 40 il ong s in a e r1( s/ inv k ep )b -e a ll a sa p st rla tic /r m g 2 ns ipa 0 e e e0 sea - nt 7 g gnt re s, suc oup r ne s w che 83% 2 rs h a 0 itrt 1 h a h loa s/ e 2a -st c v sha ing a rns te 2 is nge a 0 tno 1 l e out ic 7s s/ st - loa st in ra e a t -t n o 2 e 40 nding ir 0 e fu 11( ut m 8nds. k e st ,)nt a -a p nding 2 - b la b 0out 1 ull n 9-e a 13 tca ins ctoun p a /pr ll. For ertc iv -e bant atla e e- of nc xa pet e m ns he sp -ion 2010 le re , - m 92 pa la -2 ini n p 01 - e ng b r8 c ull .e ant e ctc ins ount of - 29 Sarah Holden is Senior Director of Retirement and Investor Research at the Investment Company Institute (ICI). database. Cross S 81% ection of the 401(k) Universe w e For re m the or e a glik e e dly istrib to ution invest o f in fixed 404 1( 0k 1)(- k) p inc la p n om la pn a e rtici p secu arpta ici rnts itp ie a s su a nn t da c a cco h ssa eu s b ts n taond t by ae l a a fun n r-ce ed nd s, G s, 2019 se ICs a le , ct snd ee ed Fi ot ye ghure e arr s st 3.a ble value funds, or money 380 AgA eg Ge r oG up roup Distri0 b u to ti o 2n of 40P 1e (k r>2 c ) e P nt lta o an ge 5 A of cc A o F c uc in g ou t>5 u B ntr a e t B lo a a n 3 l1 ac 0 nc es e b Inv y S e>1 isz te e0 d o t ifn o A B 2 c a 0 c la onc un etd B >2 Fu a0 lnd a t n s o c e 30 >30 Investmen> t8 O 0 p petric o en ns t Offere> d 6 0 b ty o 8 P 0l a pn ercent >40 to 60 percent Plan> s20 to 40 percenP t articipa >n 0 tts o 20 percent Ass Ze erto s May 3, 2022 • No. 557 Account Balance to Balanced Funds by Age EBRI/ICI analysis ReferencRe es ................................ search Perspective 22, ................................ no. 8 (December). Av ................................ ailable at www.ici.org................................ /pdf/per22-08.p 15 df. ...........................26 The e inf stima ormte at ion a of the b out numb : er 9% of active 401(k) plan partici 86.9 p % ants is based on a combination of data from US Department of 360 p ba ar la tic nc • ipa e rnt Unk aebm s in t sta now rine ache Y td - n, e 20 ir a unp w r05 tw hic a .p eid. nt h is t dfie .US s, he 76 DA e fin v p p e a e a r 73% rr a l tc g m cea ent e tL nt e o g of a or of n p y a L O , r a u c tb ic onsi tor sipa ta d n snt a td s of tisa n in g in a d tss he ica eir tte s for ttha ha tie tt s, a c loa ould n a nd M e not m 86 diount a p n be e L r s t o cide e ant e nnt n O d of ifi u te to p s da tb .a re t nic d aipa i n ne gnt gs in t ligible he pir o rsi tion o xties f 13 Steven Bass is an economi 86.5%st at ICI. Craig Copeland is the Director of Wealth Research at the Employee Benefit Percentage of participants with account balances in specified ranges, 2019 60s 14% fun Se GICs ed a s ( ls o Fi a re Do gur ins ld e 2018 ura 13)nc . For a end co 4 e mp J0 xa oint 1a m (ny k) p Committe le p p,ro l a ad n m uc ch ong ts ea tha o r a p n a ct t Tax rg t eic u riipa a ast tion raint cs nte s in t 2019 e b y a n s hu ( pe p e m ir p c .b ific t 104- w e r e ra nt ote fie 105) p o s, t a f r1 re t.he i ci H turn o p a ld a v e e n on, r tn s: a g the S E e chra B a inv llo R sIs e c /,Ia sC te a tion to e nd I d 4 c 0 Chis a1 p(ita k) m qluit o 2022 vy e r athe nd find b li a fe ala n o nc o f ng e the d o ing E20s quity, bond, money, and/o $r 4 ,b 8a 3la 0nced fun$ d1 s3,827 $22,4 45 4,2 676 2,852,372 of year $1 -e 9n 6d ,2 2 70 41 ,9 230,426 30 Ave3 r4 a0 ge 40 67% 1(k) Particip Pea rce n > n t 3ts 0 a g yR e e a o e rfs p parre ticis pe ann ts,t a 20 R 19ange of Ages 78.5% 21% Hold See e n, noSa te r11 ah,fo Ja r a cd k dVa itio nD nae l rdheeti, aila o nd n tSt arg ev ee t n B date ass fu. nd 20 s21 . a. “401(k) Plan Asset Allocation, Account Balances, and Loan Labor, Employ 42ee 1998 Benefits Security Administra $6tion ,71 77 72022 .8% and US Bureau of Labor Statistics $ 32022 ,902. US Department of Labor Years 5 0 of s tenure Zero >0 to 10 >10 to 20 >20 to 30 >30 to 40 >40 to 50 >50 to 60 >60 to 70 >70 to 80 >80 to 90 >90 to 100 ha plad n a no ssloa ets. ns outstanding at year-end 2019 (Figure 22). 320 Endno Retsea es ................................ rch Institute (EBRI) 1. T ................................ his Issue Brief was wr................................ itten with assistance fr ................................ om the Institute’s resea ............................. rch and editorial 29 78.4% d c o ontra w 30s nw ca t.rd trend in the percen 1ta 2,g 1e2 5 of 401(k) p2 la 5n ,8p 5a 1rticipants w 48 ith ,97 o9 utstanding$ 7 loa 5,ns 74 9 in recent time periods. funds was 90 percent of ad ss ae ta ts, ba cse om p in a r2 e0 d1 w 9 77 it v .h a 3s. % 2 bout 04% 19 70 D O pe Lr cF eo nt rm of 5a5 ss 0e 0t sf o arm aong ll 40 p 1a(rk) tic p ipa lant ns 1s in 5.7%their sixties. Younger Of which: target date funds are an option 39,135 2,695,629 182,902,730,040 Brady 4, 0sPeter , Kimberly Burham, and Sarah Holden. 2012. The Success of the US Retirement System (December). > P 2e 0 rtce o 3n 0 ta ye g ae rs of active 401(k) plan participants and $81,140 • 11.8 million 401(k 17% ) plan participant 6,8 s, in 15 20.7% 4,400 3000 to 2 1999 28.3 3.8 1.3 1.0 0.7 0.8 0.8 0.6 0.8 0.8 61.1 US 2021 Int Dr a eo p re duc ap A rto c m rts tiv et nt iion tha ty of in 201 t the Lab re or 8.” w , e E Ire m CI p a Re loy bosea ut ee604, r Bce h P ne 400 fit er s Se spe 401( cctk ur iv ) e it p y l27 a ns A, d no. m in ini 2019 2, a stra .nd tion. EB20 RI 1I 08. P ss toue 2 r iv y Ba e ra ie te rfs , Pno. ensi52 on 6 (Ma Plan B rcull h)e . tA in, va A ila bb st le ra a ctt of 72.4% 74.0% Dis 31 tribution of 54% Plans, Participants, and Assets by Plan Size 40.4 1%01(k) Plan Asset Allocation, Account Balances, and Lo 53% an staffs. Any views expressed in th Perc is e nrte ap gor e otf a Ar ce c otu hose nt Balof anc te he In v aeut sthor ed in a B nd alan sh ce ould d Fu nnot ds be ascribed $ to 78t,he 267 officers, The 3 0401( s k) plan sponsor selects the investment options available in the plan. Figure A2 in the appendix presents the 40s 22,854 41,906 74,576 130,578 $190,667 280 pa E rq tic uipa ity,nt bs o n ha d,d m co onsi neyst , a en nt dly /o r highe balan r c a 10% e lloc d fa ut nions ds; to target date funds. A target date, 3or 0.1 li %fecycle, fund pursues a long- 69.5% 14 42 >2 to 5 27.9 4.2 2.0 1.8 1.4 1.4 $7 16 .4 ,293 1.1 1.4 1.5 55.9 Washingt 2000 on, DC: Investme 4nt 0 1 C(om k)6 p ,p 8 al5 a ny 6n Ia ns sse titut F ts e ig . bu A yv r p e aila a 1 rb t9 ilci e p ata w ntw a wg .ic 20% ei.or , 20 g/pd 19 3,8 f/2 p4pr_12_success_retirement.pdf. • 74,612 employer-sponsored 401(k) plans, holding $75,358 Othe In pla r n sta ye bale r 2019 value (fu land tesst inc data lud aev a s y ila nth ble e)tic , oGICs nly 1. , 2 w p hic erc he cnt ons of isthe t of 3$6. 5 a. 1p % 2 o rtfo trillilioon oin f fixe 401( d-kinc ) pola me n a sse sc euriti ts weesre “w pra articip ppeda”nt w ith loans a . w 20 w 16 w .ic For i.or mg 55 /sy 0st 0 A em nnu /file as/ l Re att paor chm ts (V ent ers/ sip on er 27 1.0) -02 . W .pa dsh f aingt nd w on, ww D.e C: brUS i.orD ge /rp eatr irte m m ee nt nt of /cont Lab eor nt, /4 E01 mp (loy k)-p ee la n B-eane ssfit ets - Age 20s 67.4% 260 Over the past four decades, 401(k) plans have become the 26% most widespread private-sector employer-sponsor $73e ,6d 7 2 3 2 $73,357 distrib trution ustee o s, or f pla ot nshe , pra rtici sponsor pants s o , af EB nd aRI ss, ets Em bp y loy four eec B omb ene ina fit tions Re $7 sea 2 ,o 3f r8c inv 3h I ens stme titut nt e- oE ffd eu ring cats ion a . Thend firs Re t c sea aterg co h Fund ry is the (E bB aRI se- The > S 5 e 50s to e2019 1 Inve 0 sEtm BP RI elnt a /I nC 3 Comp 0 a I. s 6 40 se 1( atny s k)4 Ins .d 93 a5 t tit a ,6 b ute 6 a8 se 2 2022 .7cont . ains 2 5.6 5inf ,80 or 7ma1 tion .8 on 91 74 ,1 9 .,612 7 70 401( 1.6k) 1 5 p0 la ,ns 25 1 1 .w 4 ith $1.0 12 . 7 6 tr 4ill ,6 ion in 49 1.9asse$ ts a 33 49 9 nd , .1 8 9 11 8 .8 Activity in 2019 43.7% 59.6% 43.5% tea rm nd inv GIC est sm ae nnt d/ o st r ro atth ee gry , stus ab ing le va a lm ueix of fund assset classes that follow 27, 4 a8 7 predetermine5 d, 8r0 e9 a,lloc 956ation, typi4 c4 a1 lly ,4 1 re 5,b 6a 3la 3,nc 06i8 ng to 2001 6,644 3,659 240 15.6% group Zero >0 to 10 >10 to 20 >20 to 30 >30 to 40 >40 to 50 >50 to 60 >60 to 70 >70 to 80 >80 to 90 >90 to 100 S gua ee ra Tab 4 •8 nte .5% le e $ 1.0 D6 (typ in tic rill a US ll ion in y De byp a a a n rtme ss ins eF tura s. nt e w o nc f 4 e L a0 cb o 11 omp r, (k Emp a)ny Ploy o a r ra et e ibc a Be inp k ne )a fits to n tp s S ro e H v curity id a ed b e Ad O ne u minis fit t 5s 5 p.t a 8 tra a % yme n tion d nts in 2021 a g c c4 o ard 0 . 1 ing (k to ) the plan at book va4 lue 8.8. % Se alloc cur ait tion y A-d am ccini oun str t- ab tion (D alancee sc -e am ndb-e loa r). nA -a vc atila ivit by le -in a-t20 18. 52.3% retirement plan in the United St 16ates. In 2019, an estimated 60 million American workers were active 401(k) plan >10 to 20 Perce 36n .4 tage o6 f .p 6la 1n ass 4e .4ts 3.7 2.6 2.2 1.9 1.6 2.0 2.9 35.6 220 gro60s up E,RF) whic , or h c the ons iri sst tsa o fff s. N p 54 la .20% 9ns e %5 it 3 he tha ,3r6 t E 3 oB ffRI er ne nor ithe E6 B r 5RI ,c5 o-8 mp E4RF lob any sb to ie cs o k 9 4 no ,r9 r t7a GICs 9 kes p oosit r othe ions 12r 6s , 3 on ta 5b 6le spe va clifi ue 30 c fu 2 p0 olic nd 9,s 0 y.8 p Tw 5rop enty osa -fo ls3 . ur 2 E 3 B p,RI e 3rc 2 7 e inv ntit oef s Figures 55.5% m B rill ight ion p Scop arte ic a ipa nd ntIs ( nve Fist gm ure ent 1 )C .om Ap s in t any he Ins 6 40 t,i6 tut 1 5( 9e k. ) 20 uni 2v1e.r Th se e a tB la r 3ig rg ht eSc , m op ost e/I of CIt he De fin pla ens d3 C ,in t 7ont 00he ribut daion P tabase lan P are rofile sma :ll: A 63 Close 20s sh ift O i2tf8 s foc .w 3 30% h %icus h: tfr arom 2002 2 g.e 6t % g da row te ftu h to inc n 1d .3 s% are om an e 1 oa .p 6s t % tiohe n fun1d .0 a %pproache 1.0s a % 2 nd 3,3 p5 a 0 3ss .9% es its tar 0g .7e % 4t, 0 d6 a9 t,e 4.10 9 .8 A % t year-e0 3 nd .2 8% 4 2019 ,043,2 , 530 36 ,3 .7 05 .8 5 % 4 $65,454 Russell 2000 Index The Employee Be Ac ne tifit veR4 e0 s1 e(akr)c h PIns lantit Pute art i(c EB ipR aI) n tis s a $ no 63 np ,92 ro 9fit, nonpartisan, public policy research organization that does not 200 2 By >20 Sa to 3ra 0wh ww H.d old ol.g 4e 1.ov n, 4 /sIC iteI 9 s/ ; .5 dS olg teov ve 5 /f .n Ba 8 iles/es bs sa 4, ./r 7IC esea I; ra cnd he 3.2rs/ Cra statig is 2.t9 ic Co s/rpela etir2e .5 nd, ment E -bBRI ull 2.4 et ins/pr 40% 3iv .2ate-pens 4.0 ion-plan2-0 b.ull 4 etins- 15 43 Loans; Loans Tended to Be Small p Definit articipaio ntn s.of 401( By yeark) -en P d la 2019 n Ac , 40 cou 1(k nt ) pBa lan a lanc sse et s had grown to $6.3 trillion, representing about one-fifth of all 100% 30s pa S Th rticip ome is 27 p .a 9 a nts re % tte c oin rn rdthe k ise 3d e . 7 p r2019 % iv ers en sin EB upp R p2 a ly I/ .rt 4ing ICI %by d 401( re ata strictio k w 2) . e 4d % re ans t a un bpa ala s be c le 1 e w . d 8 to % e o re p n ro in loa vith d ne 1 ea .s 6 c mo e % o mp pun lans le tste ., w 1a .hic 5 s% seh t g ae llo ne ca 1 ra tion .2ll % y o dff ee ta r ie l 1q o .4 uity n %ce rta fund in s 1 p ,. o 6b % oole nd d a fu snd set s 5, 4 c .la mo 5% ssne esy comment on 2003 this research. 6,839 3,832 180 pe E rq ce unt ity ,of bo the nd ,p m lao ns ne ha y, v ae n d 25 /o ror b a fe law ne cr e d p a fu rt nic dipa s; nts, and 24 percent have 26 to 100 participants. In contrast, less than 1 Figure 1, LE ook a BRI/I t C 40 I 40 1(k 1( ) k P)la Pns la, n D 2018 ata. bSa ase n D C $ov ie 60 g e ,o, 3 rs a 2 9 C A W : ide Bright RaSc nge op of e aPnd lan Size Washsingt ................................ on, DC: Investment............................. Company Institute. 5 percThe ent of 2019 401( Ek B)RI a/I ssC eIt s in t datahe base da c tov abe ar se s 20 we p re e rinv cent est of edt he in t uni argveetr se datof e fun 401( ds, up k) pla fr n p om a r26 tic.6 ipa pnt er s, ce12 nt p in er 2018 cent ( of Fig pur lans e 14) , . H >old 30 en, Sarah, Ja 4c 5k .7 VanD 1e 0r .h 6ei, and 6.2Steven B 4.9ass. 2021 3.5 b. “Targ 3.e 1t Date 2 Fu .4nds: Ev 1ide .9 nce Point 1.7 s to G 1r.ow 7 ing Po 18 p.ula 1 rity lobby or take positions on legislative proposals. 44.5% 3 76.8% Sixties 4 Twenties 18.1% 40s 160 36.2% abstra 7c 9.t 5 2- .% 6 20 %16.pdf. 3 . 6% 3.3% 2.3% Select 2.e 0% d years1.7% 38.0% 1.5% 1.7% 2.1% 40.1% Note: The average account balance among all 11.8 million 401(k) plan participants was $81,140; the median retirement assets. In an ongoing collabor6 a,t9 iv 4e 6 effort, the Employee Benefit Researc3h I ,89 ns 3 titute (EBRI) and the fo fu r nd os ne , a o nd r mo bala renc o 2004 f ed the fuir nd cs li eant s sinve . Thsetme fina nt l EB opR tion I/ICI s. Ano 401( the k)r d49 ata p be arc se e nt inco lud f peasrticip onlya p nts lans w e fo re r in whic pla h ns a ttha leats o t ff 90 er pGICs erce nt and of o atllhe pr lan and company stock 465 1,360,770 117,758,222,231 As a $ cr 5oss 5,50 sect 2 ion, or snapshot, of the entire population of 401(k) plan participants, the database includes 401(k) percent of Avtahe ila b ple la ns at ha ww vw e .ic mor i.or eg t/s ha yn 2,500 stem/file ps/ ar 2t02 icipa 1-07 nts. /21 H_pp owerv _dc er,p p la an_pr rticipa ofile nts a _401 nd ka .p sd sets f. are concentrated in large AA m llong participant 32s in t .2 heir 5. 0twentie 3s, .1 53.4 p3e .0 rcent of 2t.he 1 ir 401( 1.k 9) asset1 s w .7 ere inv 1e .3sted in t 1.a 5rget da 1t.e 7 funds a 46 t .4 year-end 140 and 15 pe 8r 0c% ent of 401(k) plan assets. The 13% project is unique because it includes data provided by a wide variety 27% 14% 50s 33.5% and App 6.r4o % priate Use 4.1% by 401( 3k .7 )% Plan Pa2 r.t7 ic % ipants.” 2.I 4C %I Resea 2r.c 0h P % erspe 1c .6 t% ive 27, no. 1.8% 7, and 2 E.B 1% RI Issue B 39r.i8 e% f, n. 5 <100 F8622 igure0 2 .10 9153 19.1532 5 Figur Su e 2, ggE es BRI ted /IC Ci I 40 tatio 1(kn ) :D H aold t 1abe an, se Sa Rerp ar h, e sent Stev s a en W Ba ide ss, C arnd ossC Se raig ction o Copef la the nd , 40 “40 1(1( k)k Uni ) Pla ve n rse Ass ................................ et Allocation, Account..... 7 account balance was $17,587. Account6 b ,8 a2 la 1nces are particip2 a 3n .8t% account balances 3 ,h 6e 61 ld in 401(k) plans at the Investment Com 2005 pany Institute (ICI) collect annual daF tai g ou n mi re lli Aons of 1 401(k) plan participants as a means to examine 120 a s ta sTh sb ee le ts Inve v ca olue uld stme fu be nd nt idse Comp a ntifie s an a dinv ny . e Ins stme titute nt o(p ICI tion, ) is in the ad le diti ad oing n to a s the soc b iaation se ore ptions pres.e nting Alterna retiv gula elyte , 1 d 2 fu pnd erc s egnt lob oa f llp ya , rticip includ ants ing w mutu ere in al Of which: target date funds are an option 331 1,380,033 112,969,882,169 p pa larns tic.ipa For nt s w exaho mpa ler,e 57 young perc e ant nd of those partic wipa ho nt ars a e ne rew in p to la the nsir w jit ob h mor s, as w e te ha ll n 2,500 as older p pa arrttic icipa ipant nts, a s and nd tthose hese w saho meha pv la en b s een 60s 33.7% 6.3% 27% 3.9% 3.6% 2.6% 2.4% 2.0% 1.5% 1.7% 1.3 80 % .7% 40.6% 2019of ; apm laong n re c por ard tic ke ipa epnt ers in t s and, he tir he sirxt efor ies, e, 28 re.2 pr e psent erces t nt he of a the ctiir v it40 y of 1(kp)a a rtss ice ipa ts w nts in 4 ere inv 01 e(st ke ) d p la in t nsa r of g 2evta d ry aing te fun size ds s — (Figure US DepaXXX rtmte o ( nt ta Se l of pte Lm abbor er, )E . m Av pa loy ilae be le Baetne htfit tps Se 1 s:/ 00/ww -c 5ur 00it wy.ic Ai.or d6971 mg ini /fst ile 0 rs/ a .1t2 5 ion. 0 48 21 620 /pe 12 5r .1 4 27 a 8. 5 -P 6 07 riv .p ad te f. Pension Plan Bulletin, Abstract of 100 A T A G L A N C E Percentage of Account Balance Invested in Target Date Funds pa Bra tila cinc paens, a ts’ c nd 2006 ur r Le oa ntn Ac emp tiv loiyte y ris n 2019 and a,r” e7 E n ,B 2 e9 RI t 2 o fI ss pla ue n lB oraie nfs, . no. Reti55 rem 7, ea nnd t sa Iv Cin I g Rse sea held r c 4 ih P n ,0 8 p9 e larn spe s act tp iv 2r 6e e .6 , v % iv ool. us 28 em , p no. loye 4 rs ( A op rr il 60 P% ercen4 ta0 g1 e ( ok f ) E lL igo ibla en 4 0A 1(c k)t P iv arittic y i pV an a tri s W ed ith Across 401(k) Plan Participants p fu how la E nd ns q s u t ,tha he i te yxc ,se t b ha o o p ff n ng a e d rr t ,e ic c- m o tra ipa mp on dnt e e ay d ny s m , fu as n nd a to d na /c so k g r ( ETFs b e b ut a t$ he la 4 no ) n 5ir ,,c 5 c s e 40 1 lo ta d 9s b 1( fe u le dk n -) v d e a nd s plue ;la fu n a pnd ro cs c d,ount uc and ts,s. This un while it inv the re es p tme re orma t nt isining trus an up t15 s d (UITs a ptee rc of e ) n in E t B o the RI f p a Unit arnd ticip e IdC a nts S I’ta s ong te w 23s e ., 0re % oing a nd in p srlimi e ase ns laa r tha rcht All C ope3 la 2nd, .2% Craig. 5 .20 0%11. “Ta 3r.g 1% et Date 3 Fu .0% E nd BUse RI/ Iin 401 2 C .1I % 40 (k 1)( k P1la ) .9 ns % Pl a and n D the 1.a 7 % tPa eb rsia st s ee 1nc .3 % e of Their 1.5 % Use Blo, om 20 be07 1 rg .7 – U %20 S 09.” E4B 6RI .4% (percent of plan assets) 25.5% 80 16 Fi wit gh th ure e 3, ir 40 cur 1( re k) nt P e am rtic ploy ipae nt rs s for Rep m reasent ny y e aa Ra rs. The nge of se A ag nnu es ................................ al updates of the data................................ base 1 7p .2r% ovide sn 50.a 5% pshot .......................... s of 401(k) plan 8 a ccount for 62 percent of all plan assets. Because most of the plans have2 0 a1 sm 9 EBR all num I/ICI ber of participants, the asset size 13). 1 to 10 11 to 25 126 p tlo a n 50 ass5 e 1t s to 100 105 1 2 8 0 to .1 4 2 - % 1 50 000 251 to 5 3481 00 501 0 to .0 17 ,07 03 03 1,7 0. 07 13 to 281 2,501 to 5,001 to >10,000 All Plans For 1 fr 9om .a 1d %d iti ve orna y lla dre gta e ic l, or se pe o rFi ag tions ure A1 to in sm the all b ap us pe ine ndss ixe . s—with a variety of investment options.2 5.3% 4 2019 For Oum tst a 55 >1 nd0 0 in 0 A tg o 4 2 nnu 0 01 y (ka e)a l Re L rs oap nor s ts ( 7Ve ,49r5 sion 1.0). Washington, DC: US Depart4 m ,1 e6 nt 7 of Labor, Employee Benefits 100% 2007 Aggregate Bond Index 60 rolled over into IRAs are 2 not included. The tenure variable is 6 generally years working at current employer and thus 2022). Loan activity by participant age, tenure, or account size, 2019 24.9% 401(k) o fu int Pff lnd a o en rs e 40 C d oh 1( ff b a e ok rrth a ) e c d p tc e la to ormp n p i s inv tia c ae ny s rs t to b ic sy ipa to rs N cin u nt k m a s’ juris b nd a er cs d to ta iv ic f it tions b P le yl a tv n hr a w P lue oug a or rl tp d ih ye c ro w ip id dauc e a n.r t ts s - ICI e , in nd 20 sa 1 e20 d e 9d k19 iti s o to .n e The to nc the oura re b pg a o 2e s r ,5 e t0 a 0 is d ohe p d tions iv reide n 5c ,. 0e d 0 0 to int h o igfour 1h 0,0 e 0thic 0 sect al ions stand : tahe rd sfir , p st ro mote compan Iss y s ue to $ c B 3k r 9;ie , 8 a f8, n 5d no. G I36 Cs1 (A and ugus /or t). Available at www.ebri.org/content/target-date-fund-use-in-401(k)-plans-and-the- Key Findings: Years of tenure Zero >0 to 10 >10 to 20 >20 to 30 >30 to 40 >40 to 50 >50 to 60 >60 to 70 >70 to 80 >80 to 90 >90 to 100 a for cc ount many b p ala lans nc 40 eis % s, m aod sse etst 1a. lloc PTw lan ae tA nt ion, sy s- efour ta snd -- p loa ern c1e0 a nt 0 c1 t iv of -5it 0ty 0he 0ac p ros l9054 ans s w ha ide 0v .2 e 0 c a r 1oss 1 ss 3e tsect 2 s of 0.1ions 1$2 2850 of ,000 par tor ic ipa less nt, s. How and anot eve he r, rt he 30 c pre oss rce-nt 40 I nternal Revenue Service 19. 23% .920 % 20. Retirement Plans FAQs Regarding Hardship Distributions 28% 16 . .1 A% vailable at 2 2 $37,323 2008 7,191 3,889 1Se 2.2c %urity Administration (SepS te &m P 5b 0e 0r). Available at 17 Percentage of Account Balance Invested in Target Date Funds Fi gm ura ey 4, ov40 ers 1( ta kt L ) e o P a ya n er a a tic r ss ipa a o P fnt e prs a cr eRe tn ic ta p ip g ra e et sent io ofn t hi e n a R tRa h ee m nge 4 a0 in1 i n ( of k g) 4 Job p 0l1 a( n k Te .) nures ............................................................................... 9 17.6% See Figure A1 in the appendix. 20 pub otli hce r un sd ta eb rs le ta v nd aling ue ,f u an nd ds otherwise advance the interests of funds, 984 their shareholder1 s,, 7d 2ire 9,8 cto 01rs, and adv 1is 98 e,rs 18 . 0 ICI ,12c 2a ,4 rrie 1 9 05 .8 s% out d 0e tsc o 2 ribes the EBRI 35/I .4CI 400 1( .8k) data 0b .7ase; the 0 .8 second p 0 3.r 4 6 e .7se %nts a 0. 7 snapshot 0.8 of partic 0.ipa 6 nt ac0 c.ount 8 bala 0.nc 8 es at 5 y8 e.a 0r-end Num ber of Plp ae nr sistence-of-t1 he Pir a- rtus icie p-a2007 nts---2009> -5 48 00 70 1. 1716888 0.37516 37.5156 Average Account 32 27% 9.7% sectiona 7.0%l analysis is not well suited to addressing the question of the impact of participation in 401(k) plans over time. ha 9v 0e % plan hta tp ss s:/ et/ww s bew tw .ir es.go en $2 v/r 50 et,001 irem a end nt-p $1 la,250 ns/re ,00 tire 0. me nt-plans-faqs-regarding-hardship-distributions (updated August Analysis of yea2009 r-end 2018 EBRI/ICI 401(k7 ) ,p 3la 46 n participant target date fund investors 3 find ,97s 2 they tend to ho 11 ld .2 % one age- Plan Account Balance Number of Participants in Plan 8.9% Age 0 Copyright Information: This report is copyrighted by the Employee Benefit Resea 7.5% rch Institute (EBRI). You may Sourcw e:w T w a.d bu ol.g latio ov ns /s fit re os/ m dE olg 1BR ov I/I/f CilIe P s/aerb tisa cip /r ae nsea t-Dr irce he ctr es/ d st Ra ettis ire tic m s/ en re t tP irle am n 30 e .D 3nt % at-a b ull Co elt le ins cti/pr on iv Pa rtoeje -p ce t nsion-plan-bulletins- About 2 C 0hanges % in Account BP alan ercences tage of Eligible 401(k) >2 to 5 35.2 1.4 1.3 1.5 1.3 1.2 1.3 1.1 1.3 1.4 53.2 • The bulk of 4 7.5% 01(k) assets were invested in stocks. On average, at year-end 2019, 70 percent of 401(k) its inte Ofrna whtional ich: ta rw go erk t d a thro te 1 fug uP nh d as rICI ti ca ip rGlob e a n atn s a -o -l, ptw ioith n offices in Washington, 713 DC, London, Brus 1,s4 e7 ls 6,, 9 a0 nd 6 Hong Kon 1g 7.4 , 086,560,249 Pa 2019 rticip; at n he ts third looks at pa 26% rticipant Ts’ ota ass l P ela t n as llocations, incT luding otal P a arna ticly ipsi an s of ts 401(k) parT tic otipa al A nt ss’ se us tse of target date B, ao larn ce 18 3.8% 9.1% Figure 5, Domestic Stock and Bond Market Indexes ................................................................ Loan as a Perc............................... entage of the Remainin g 10 6,846 Figure 13 3,619 group Cr oss For Z 401( sect ero ions k) as > c s0 2010 ha e t tonge Fi 1g 0ure in c s >,1 o 0 s m e te op 2 Inve osit 0 ion fr s >tme 20 to nt om 30 Comp ye> a3ra 0 t ny to o y 4 Ins 0 eatit r > b ute 4e 0c ta 2022 ous 50e .t he >5 0sele to 6c 0tion o >60f d to a 7t 0a p> rov 70 ide to 8r0s and >80sa tom 90 ple of >9p 0la tons 10 0 appropria16 te , ta 20 rg21 et ; da ac te c e fu s7 sed nd .9% ( s Ma eer H ch 21, olden,20 Va 22 nD ).e rhei, and Bass 2021b). For an analysis tra 7.1% cking target date fund use and the 2.4% 5.3% 6.3% >5 to 10 37.6 2.3 1.9 2.1 1.6 1.4 1.5 1.4 1.6 1.8 46.8 copy, print, or download this report P solely for articipan tp se W rsona ith Ol a utn stda n nonc dingom 401 m (k e)r cial use >2 t, op 5 r ov yeide arsd that all ha 5r .3 d % copies retain abstract-2019.pdf. 2019 Form 5500 1 Plans-- sum 45016 16.1% D 1 old A tlo l , 1E 0lizabeth Thomas. 2018. “Qualif 28ie ,5d 4 2 .7 0P % lan Changes Within1 t 7 4he 4 6,,6 2 B 1 6ipa 2 4 rtisan Budg 11e ,7 t$ 5 1 A 2 4 c ,,8 t8 .” 9 19 5 Jour ,098na ,17 l o 19 f P 53e ,6 ns 28 ion B ,208e ,$ 2 ne 1 20 1f1 it,s 2 90 80% participants’ assets were invested in equity securities through equity funds, the equity portion o (*) f balanced AverageF A ifs tis ee st Allocation of 401(k) Plan Accounts by Participan 40 t 1 A (g ke ) Plan Account Balance 20s lifecy3 c7 le .8, % funds; a 1.1 nd % the four 1.2t % h focuses 1.5% on pa 4.r 7t % ic 1.ipa 0% 3nt .2% s’ 4001( .9k %) loan a 0c .9t% ivity. 0.21 7% 11% 0.8% 0.8% 53.4% 6 Percentage of E 0% l2011 igible 401(k) Participants 1 W 4i.t7 h% 401(k)7 L,o 0 a2 n7 s by Plan Size, 2019 3,785 3.9% 2.6% 3.8% using a given provider vary and because 401(k) participants join o 5.0% r leave plans. In addition, the database contains p > e Th 1rs 0 is is to te up 2nc 0de ate of eth 1xte 3e .34 ir % nd 4u .1 ss e p re fro viou m 4.32 s007 findthro ing 3.3sug fro h m 2009, the 2.8 psro ee je Cop ct 2fo .1 erla 1 nd 996 2011. 1thro .8 ug For h a 2018 1 2 n ..7 1a %na . lFor ysisT 1 y h .o e 5if a rtrta 24% i-e e rs n gd et 1 2018 d .9 ate 8. 0 re fu %s nd ults 2 .us 8, e s eaemo Ho 3 ng 3 ld . 7 e dn, efa ulted Loa 6% ns 1.8% 19 In order to analyze the change in participant account balances over time, it is important 1t .6 o %have a consistent any and all copyright and 1 other applicab3le .4 % notices contained therein, and you may cite or quote small portions of Figure 6, Percent Change 1 2. P 5in % laTot ns--al Return Indexes .................................................................................................. 10 1 1Es totima 25 tes Pl o af ns the Of fe nu rinmb g Te ar rgo ef t D 401( ate k) Pa p 25% 1 la r8 tns , ic 2 i8 p a a 7n nd ts O ac fftiv eree d p Ta artici rgetpants Part 3 0 ia c5 ire p,a 6 n b 3ta 6 s sH eo d 1ld o inn g a T ad rg ae ta t fro 2T m 7 a,2 rg the 2 e6 t , D 5 US a 8t3 e, De F 56 un p 0d a rtme Assetnt s of Labo 8r’s 9,0 82 30s 36.9% 2.0% 2.0% 2.1% 1.6% 1.4% 1.4% 1.1% 1.4% 1.5% 48.6% Ye ar Of - wE h fun 25 nd ic, hd :no. s, a t2019 arg 4 (Sum nd et dca om t1 S e0 m fnaps p 0 ua e n o ny r d r )s : f e st 67 a w ho o re – e c 69 r k a t . n . T o o A w p f v e tia 4 o nt 1 ila n 0 0 y1 b -1 seve le to ( k) a 5t0 n ht 0 P pte p ar rs:/ 5c.e 3t % nt /ww icipant 5 0of 1w ta o .g ss 6 4 1 re oom.c ,,0 5 ts s w 0 0’ 7 0 A eom rs es 1 in fixed /wp e ,0t0 -A 1c ont tll 1 o- 0 o inc 5 ,e 2 ca ,0 nt 1om 0 7/u 0 ,t 5ion e p 6 9 loa secu ds/ r> it 20 5 ie ,19 0 s su 0 84 0 /05 1c,h a 1 /Qua 95s st ,28 lif 1 aie ,b 9d le 5- 8 Plan- 7,153 3,858 19.2% 2012 Percentage of account balances, 2019 I>nv 20e tst o m 30ent 0.5 % Comp 5a 0.ny 5 Inst6 it.u 9te. Qua 4.r 2terly Supp 3.4 lement 2a .5 ry Data2 . .W 3 ashingt 2.2 on, 3.9%DC: 2I .24% 2 nv 17e .7st %me 3nt .0 C 3.om 3% p3 a.ny 9 Instit1 ut 9.e 0. 2.9% 3.5% 1.6% 1.6% only a Vnd anD no tehe rhe n- d aie ,c faul c aoun ndte B td a b s401( a s F la u 2021 n nc d ks)e s he p a.la R ne ld p sa ult in t rts ic he fo ipa r nts 40 earli 1( , D se k a er ) te e y p Mitc e Fla u an rs ns dh sa e a re llt a p and a vr a tiUt ic laipa b kle us nt in 2012. s’ eD a ca ur rl te ie r F e r u nt is ns d ue e sm sp o loy f ICI ers. R e Re setair rc eh mP ee nt rs p sa ev ctiv ings he e ld in plans 1 US Department of LaL b eor ss, thE am n $ p 1loy 0,00 e0e Benefits Securit >y $ 4A 0,d 00 m 0 ini to $ st 5r 0a ,0t0ion. 0 2021b. Privat M eo rP ee th ns anion P $100,la 00n B 0 ullet 1in 3.2 H %istorical All sample of participants. Co 0.m 9% paring average account b 18 alance 1s a 2.2% cross d2iff .1% erent year-end snapshot 8s can lead to 40s 27 60 t% o 45 20 .6% 3.4% 2.9% 1 20 .8 ,7 %42 2.1% 1.7%386,141 2.5% 1.3% 31,33 14 .6 ,7 %09,605 2.0% 38.1 8 1 .1 5 % % ,148 the report 0p .4r% ovided 1t0ha .9% t you do so verb1a 0t .im 8% and w 1.it 3% h proper citation. Any use beyond the scope of the foregoing AlEmp l index loy es e ae re Be setne tofits 100 S ine D curity ecemb Ad er 2 minis 007. tra 0.6tion. % See discussion in note 2. >30 56.9 7.9 4.5 7,4 3.2 51 2.7 2.4 2.0 1.6 3,973 1.5 7.0% 1.5 15.5 EBRI/IC C va ha I lue 40 nge inv 1( 2013 s-e k) W stit m Da hin en t -ta ts, b he ba -B ond sipa e rfun tisa dn s, m -Budg one ey t- A fun c N tu .p dm s, a db f e .nd r oft he Pla fix n P ed a- rinc ticiom pan et s portion of balanced funds. <$10A ,0t 0 0year$-1e 0nd ,0002019 to4.9% >$ , 2 42 0,00p 0e to rce>$ nt3 0 of ,0040 0 to1(k >$ ) 4p 0la ,00n p 0 toar>$ tic 5ipa 0,00nt 0 4 .t8 o s’ % a>c$c 6ount 0,000 tobala >$nc 70,e 05 0 s w .0 0 % toere >$ inv 80,0e 00 st toed >$ in e 90,0 q 0uit 0 toy fun >$10d 0s, on ,000 to av >e $2 5 r0 .a 2 0g % ,0e 0, 0 Figure 7, Snapshot of Year-End 401(k) Plan Account BalancP ee s r................................ centage of Perce................................ ntage of ................ 22 12 4.0% 2 50s ( aw t w pr w e 4.v 1 ic .ious 0 i.o %rg e /rm es pe 4 loy a .2rc % eh/ rsinv ore r s3 oll to .2re % sd /e ov brie-r ic 3 int i). 0a % o nd indiv EBR idua I 2.Is 2% s l ue re tBri iree m 2 f e .( 0nt w %w aw c.ceoun bri.o 1.t 7s (I % rg/p RA ubs) lic 1a a .4 tions r% e no /re t inc se1a lude .7 rc % h-d p ub in t liche 2a .0 tions % ana/ly issi su s. e3 -b 7 .rie 7%fs). Tables and Graphs 1975–2019 (Version 1.0). Washington, DC: US Department of Labor, Employee Benefits T h5 e1 S t & oP 1 50 00 0 is an index of 500 stocks chosen for 7 m,a 0r1 ke 1t size, liquidity, and industr4 y9 g6 ro ,2 up 6 0 representation. 35,914,727,674 72,371 33 false $2 0 c,onc 000 lusio $ns 30,. 00For 0 exa $4m 0,0 p 0le 0 , add $ing 50,00a 0 large $6 num 0,000 ber of $70ne ,00w 0 plans $80 w ,00it 0h sma $9lle 0,0r0 0balan$c 1e 0s t 0,00o 0 the $d 2a 00t,a 00 b 0ase would requires EBRI’s prior express permission. For permissions, please cont 3, 4act EBRI at permissions@ebri.org. All 40.4 3.0 2.5 2.5 Size of 1.8 Account 1 Balance .6 1.5 1.2 1.4 1.6 42.5 Target date fund 2014 s are often used as the d7 e,faul 780t investment in automatic enrollment pla 4,ns 23 9 and in plans’ investment lineups Balanced Funds GICs and I 20nve • st me M nto C re 4 om0 pa 1ny (k ) p Inslan titu pa te. r 2022 ticip . a “n The ts h US eld Re equ tirem itie ent s a Ma t y rk ea etr , -Four endt 2 h Q 01 ua 9 th rter a n 2021 before ” (Math rch e f ). in Av aan ila cial m ble ata rket Inv2 e0 s0 tm 7 ent O 2p 0t1 io 9ns Of2 fe 0r0 e7 d by P2 la 0n 19 2007 2019 P 20 la 0n 7s 2019 Par2 ti0 c0 ip 7ants 2019 Percen 2t 0a0 g 7e of As 20 se 1t 9s 60s 3 in line 42 w .3it %h rece4 nt .0 % years (Fi 3g .0ur %e 12). 2A .8 not % her 34 2. 1 p % ercent of 1.940 % 1(k) p1 a.r 7t % icipants’ 1.a 3% ccount b 1a .5la %nces we 1.r7e % invested 3 7in .7% A g For e Ga rn oua p nalysis of the changes in account balances of consistent participants in the EBRI/ICI 401(k) database in the wake of 60% Participants T 1 he 0 1 R uto ss 2 el5 l 0 2000 Index measures the performance5 o,f1 t9 he 6 2,000 smallest US compan 8i1 es 0 ,(6 ba 1s8 ed on total market ca5 p4 it, a7 li8 za 2t,io 6n 6 )1 in ,4 cl9 u3 ded in the Russell 67,581 Fu rthermore, account balances are net of unpaid loan balances. Because of all these factors, it is not correct to Sources a Se nd cur Tit yype As d m of ini Data stra tion (September). Available at 7 tend to pull down the average account balance. This could then be mistakenly described as an indication that Age Fi gure E q8, uity D istribut Targ ion o et Daf 401 te No( nk –) T aP rg la en Ac t D>5 atec toun o 7 1,0 9 t 8 y B 2 e a B a la S o rin z s nc e d oe f s b Accoy u nSize M t B o an lae ny of ce AccO ou thnt er S B ta ab la lence ................................ Co 4m ,3 p5 a9 ny ................... 13 Me mo: Employee Benefit 2015 Research Institute. 2018. “History of 401(k) Plans: An Update.” Fast Facts (November). Washington, ( sTh eee P EB lan RS I/pICI ons401( or Cou k) nc dailta obf aAme se eric nviaro 2020) nment . At is y ce ertifi ar-e end d to 201 be9, fu 67 lly p ce orc mp ent liant of w taith rge the t da IS teO m -27002 utual fu Inf nd o rma asse tion ts wSeere curity held Aud in DC it All 40.4% 3.0% 2.5% 2.5% 1.8% 1.6% 1.5% 1.2% 1.4% 1.6% 42.5% Equity, bond, money, and/or balanced fP ue nrd cs entage of Account Ba 61 la.nc 2% e Invested in Non 24 -Ta .3% rget Date Balanced 2Fu 0.6 nd %s 20s w c2 rw is 0w sis .ic (y i.or ea gr /r -e en sed a 2 rc0 h/ 3 0 0 st 7 sa ), ts/ arn ed tir m em oe snt t h . a d 40 th s e m8 ajority of th 50s eir accounts inv 6es 0sted in equ 17 ities. A For ll 300 b 0a In la dnc ex e (w d h ifun ch tP rd ae cs, la k rce s thn reg t a 3 e,g ly 00 e 0 to a la frr g p ge e a str t td U icip S a tce a o m n fun tps and ies. 401 s). (k) participants’ investment in company stock continued at historically low the financial crisis (ove2r , 3the eight-year period from year-end 2010 to year-end 2018), see Ho3lden, VanDerhei, and Bass 2020. 5 2 51 to 50 N0 ote: A target date fund typically r2 e,b 2 a1 la 3nces its portfolio to bec7 o7 m 0e ,7 l2 es 9s focused on grow 5t0 h, 5 a2 n6 d, 4 m 7o 1r,e 9 4 fo 3cused on 65,557 presume that the change in the average or 20% median accF ount igu r be a la 1nce for the database as a whole reflects the experience Group SeveR ra Funds ep l rw o ec r w or t Availabili wd .d ke ol.g Funds eping ov/sor ty ite g :s/ a Thi ni d Bolg za as r lat nions ov e cep d /f or F il p u e t n rs/ is ov ds ea ide bvsa ad ila /r re b Funds esea le cor on rdcshe t he on rs/ int ast Funds cte aiv r tis ne e tp ic t a s/ arttr ic e w Vt ipa aw ir lue w ent m F .e u s in 401 eb nnt d ri.or s-bull g e ( k t Sins ) t op c/pr k lans iv a atte y -O p ee ta hns re-reion nd- p 2019 la Un nk-n . b oull The wnetse in-Equities 2016 7,907 4,279 balances are declining, but 1 it would tell us nothing about consistently participating workers. Similarly, the 4 DC: Employee Benefit Research Institute. Available at www.ebri.org/docs/default-source/fast-facts/ff-318-k- s pta lans nd a (rd se.e Mo Inve reo sv tme er, nt EBComp RI haa sny obIns taine titd ute a le 2022) gal o.p All inion ing tha andt Cl the ark me 2021 thod re olog ports y us tha edt me 54 ep ts e rc the ent priv of a DC cy p sta lans nd a in rdthe s oir f the Gramm- (30s *5 ) 0 = % less than 0.5 percent 18 13 Note:T A h te y B e a l o r -o O em n fd bw e 2h r 0g 1 i c 9 U ,h S t1 h : 0 e A t a 0 a gv r % g e g rre e ag g ta ed t e aa c B tce o o u n fn u dt n b In a d d la s e nx c e a is r a e c mo oa m nn g p o ao ls l p e 1t 1 di.o 8 on fm sile lio cn u r4 it0ie 1(sk )c p oa vre tirc in ip g a n gto s vw ea rn sm $8 e5 1 n,2 t1 . 4 a5 0 n;d t hc eo m rpe o dria atne a b co cn ou dn st, bm a 2 lo a2 r nt.c g 9 e a g we a- sb $ a1 c7 k,e 58 d7 s . e Ac cu cr oiu tin ets b , aa l1 a n n 9 d c. e a 2 s s a sre et -participant example, about four-fifths of participants in their twenties had more than 80 percent of their 401(k) plan Figure i9, nco Am ge e a Csom it a pposit proa ion o chesf aSe ndle pc atsesd e s40 th1( e tk a)r gP ela t d n Ac ate o cfoun the tf u Bna dla , w nc he ic h C a ist e ug su or aille ys i n ................................ cluded in the fund’s nam....................... e. Funds 14 20s 50 le 1v te ols 1. 3 ,0 1 Fi 0 .3v 0 % e percent 53 .4 of %401(k) ass 4e .9t% s w 1,e 2r 0e 6 invest 4.e 6d % in comp0a .3 ny % 8 4 st 4oc ,98 k1 at 1y .9 e % ar-end 201 1 5 .9, in 6 5% ,386lin ,32 e6 w ,7 1it 1 .1 4 h r % ecent y0 e.a 8% rs. Thi 65,5 s 47 85.4% Percentage of Account Balance Invested in Non-Target Date Balanced Funds 21 7,935 Age Group 4,293 of “typical” 401(2017 k) plan participants. (See About Changes in Account Balances on page 6.) p N Yla o eta e n r :r s A e c of cco or this u e nd nu t k b tor a e rle a eic np ca e eZ ls r-e s inc t ara ro eb p le alude s r> t- ic 0 a i pnd t a o m n1 t- ut a g 0crc ua > a o 1 p u0 l fund hs n tt o b.p a2 la d 0 nf c.c > e o s 2 m 0 h etp lo da i3 nie n0 40s, b 1 >(3 k0 ) a p tlo n an k 4 ss, ins 0 at > th 4e 0 ur pta o ra ti5 nc c0 ipe a > n 5 c ts 0 om ’ c to urp r 6e a 0 nnie t > em 6s, a 0 p lo to ynd e7 rs 0 ac n >onsu d 7 0 ar t eo lt n8 eing t0 of> p 8 fir la 0n m t o los. A a9 n0 s. lt R >houg e 9t0 ir etm o eh th 1 n0 t 0 sae vi ngs acco bu an ctk b e aBe d la s na c c eg e a cs u us g r hr ie te e ile dg s o in a (f r4 tethe e 0bE 1 a (a k la B )s v ne pe c lR a r ec na dha sI g / m aIe tC ng o t h na e tIe h c pls 4 c y a rount in 0 tb ic yi1 pthe m a( n a k tb r sk ' ) a c e c ro u la t P rc rnc s e als n pa t i e ts e an m e lw iz p c la tion o ould D tyio ea rn ss ) t .a , a t T n c e d hb o e nd a mp ria e n d ns te ea o x te ring o 'sb f C p te o la t n a p o a llull v o rv a e en te e ra u srd . rs n g R e e c d to iow ra na es c m i c s e n if W o n ts tun soi afd a v t p in rb e la g ic sa e rh la R g e anc le p da p inum n re n e p s clg a ia a ntse c ib o ro a n e t o /r p d s re sf e of p v d irP o eiffe u old csl ia a etm re ie o n pr nnt l o p p yS lea u y rsir se z to ia ic n re r c ripa - o os e m llend d ent o a vs s c e ro ra r i e ns tt o sir - IR eAd s. are not 40s 24 9 199Joint L re 6ec ao crd h C -1 k Bl om 9 eil e 9 40 e 9 pm y ing y iAc e tta e s t. re y 2 - s At 5nov 0on te 02 no m Ta 18 in time xa .p 2020 2 td 0 ion. ha f 0.7 s o 20 ff ae ny 06 r 2 ano 0 . uto 0 Te np 8ma cub hni tic lic c 2 a 0 e pl Ex nro 1 e0 rsll o p me na lana l 2 nt, info 0t1 ion o up 2rma fro f H.R. 4, tion m 2050 1tha 3 pt erc t is he e 2 pnt 0 e“ 1 rs P 4 in e on na 2019 sillon y 2 0 id a P 1e n 5 rnti o dt 41 e fia ctb ion p 2le 0 erc 1 , 6 s A euc c nt t h of in a2s2015. 20 0 a 1 06 7So” c ia as P l 2S 0e 1 ac 8 ss urity ed b 2y 0 19 Equity, bond, money, and/or balanced funds; Median tenure: 7 years 30s 37.7% 43.8% 4.3% 5.1% 0.5% 2.9% 3.4% 1.6%27 0.5% 83.6% 1,0 01 to 2,in 5c 0l0 ude mutual funds, bank collectiv815 e trusts, life insurance sep1 a,r2 a5 te 6 ,a 0c 9c 4ounts, and any p8 o7 o,le 7d 4 9 in ,1 ve 4s 9t,m 69 e0 nt product 69,859 Age accounts invested in equities at year-end 2019, up from less than half of participants in their twenties at year- share has fallen by 73 percent since 1999 when company stock accounted for 19 percent of assets. Altogether, equity included. Note: This publication was updated on November xx, 2022. h 0e tld o i2 n plans at previou9 s2 e .2 mployers 3 o .4 r rolled ov 0 e.r8 into IRA 8s ,1 0 a.6 r3 e 2 not inclu0 de .1 d. 0.1 0.1 (*) 4,486 (*) (*) 2.9 percentage of the origina 2018 l investment. EB 40 RI %/ICI project has collected data from 1996 through 20 Fo 19 rti, etshe universe of data providers may vary from year to 40s Fi s50s eg cur tioe na 4 6 10 .l 7s % , na Te 2 p8 nur s0 ho %e ts 3 1 C c .2 om a% n le posit ad tion o o fals 2 f Se e .5 % co le nc ctlu es dion 40 s1( . 6For k .8)% Pela xa n A mp 22 cle c0 oun ,. 7 ne %t w B lya fo larme nce4 d .C 3 % p ala tens gor w ie os uld ................................ 5. 4 t% end to pull 1.9 d% o6 wn the ................. a 0v .5 e% rage 14 78 .3% In addition, Pecrha ce 1 nge n 7t7 a .s in t 7 ge0 o .1he f0 p 8 4 lsa 7 an m s, 1p 0 le .p 8 a 4 of 7 rt 3 irci ec por an dtks, ee a pe nrds a asse nd ctha s b nge y n s in t umb he er set of of plap nla p ns a rfor tici p wa hic nth th s, 2e 0y1 k 9eep records nu 1 mber, t bhe ee n H tra ouse nsfe on rreJuly d to 28 or , s20 hare 06, a d wnd ith a EB s C RI. onsi dered by the Senate on August 3, 2006. JCX-38-06 (August 3). group Ze prro imarily >in 0 v te os 1 te 0d in> t1 h0 e ts oe 2 c0 urity> 2 in 0d tio c a 3t0 ed. >30 to 40 >40 to 50 >50 to 60 >60 to 70 >70 to 80 >80 to 90 >90 to 100 So u2 rc ,5 e:0 T1 a a b n tu o d la t5 iG o,n 0 IsC 0 f0 rs om a En Bd RI//o ICr I P o atrh tice ipra n s t-tD aib rel ce te d v a Re lu tire em f 301 e u nn t P dla s n Data Collection Project 128 ,04 33 6,.3 813 48 94 .4 ,903,990,435 46.3 81,379 34 Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project Med Sio au n rP ce asr:t iB clio poa m e nnd b ts e rg in 20 , c Fr l07 u ad nk e . R Ov th ue se s 1 e r1 la l .ll, ne C 8o m mp ila la in o r yn ly , a 4 95 n 0 d1 S (p k ta )e n r p dc laa e rd n nt & p a of Proto i40 c r'isp1( ank ts ) ip na trhte ic y ipa eant r-e s ha nd 2 d0 1 a9 t le EB ast RI /som ICI 4e 0 1 inv (k)e d st am tae bnt as ein e and q uit theie 2s a 1.8t m ye illa iorn - >2 to 5 91.3 3.6 1.1 0.6 0.2 0.2 0.1 0.1 0.1 0.1 2.5 secu Ser eit Fi ieg sure —esq uit 14 2019 ya nd funds, A2. the equity portion o 6,95 f 0balanced funds, and company stock3 — ,3 r4 e3 presented 70 percent of 401(k) 50s US De4p 3a .6r% tment of 28 L.a 2% bor, Employ3e .0 e% Benefits Se8 c.ur 4%ity Adm24% ini 0.9 st %ration. 207 2.2. P 2% rivate P6 e.n 1% sion Plan: Abst 2.1% ract of 0.For 5% m 5500 68.1% 60s 14 6 Holden, Sarah, Peter Brady, and Michael Hadley. 2006. “401(k) Plans: A 25-Year Retrospective.” Investment Company 20s y ac ec ao run . 8I 8n a t .7b % adla dnc ition, e 2 b.ut 5t% he w 16 op 9uld la .9ns te 0 0 ..w 7 ll 1 % 10 it us 3 h7 no 1 any thing 1 0 0 g ..3 iv 4% 7 e a 1n p b 1out rov c0 o ide .ns 1% r is m tea ntly y c 0 ha p .1 a% rticip nge fr ating om 0. 1 y w % eoark r e to rs.y 0e S .1 a imi % r, la wrly hic , h ch the 0.1% a ag nge gres t ga0te he .1 % ap vla era nsg e p raov 7 c.c 0ide o % un dt . can a Sou ls rc o einf : Ta lue bunc latie o n ts he fr o cm ha E nge BRI /in a ICI P ga grrte icg ip aa te nt -a D vie re rc atg ee d a Rc ec tiount reme nb t a Pla lanc n D ea . tThu a Cos, lle c to tioa nsc Pe ro rt je acin t what is happening to 5,001 to 10,000 170 1,201,650 102,438,297,489 85,248 Washington, DC: US Joint Committee on Taxation. Available at www.jct.gov/publications/2006/jcx-38-06/. >5 to 10 91.1 3.6 1.4 0.8 0.3 0.3 0.2 0.1 0.1 0.1 2.1 840 1 (O k)f p w la hn ic p ha : rta tic rg ip ea t n dta s te in ftu hn ed y se a arr-e e n ad n 2 o0 p0 ti7 o n EBRI/ICI database. 31.3 34.6 34.0 60s Figure3 8 11 .0% , 40N 1( ok te ) :2 P 8 A la .2 v% e n Ac rage c ou annt d m Be 4a .d 0 la i% anc n 4 e0 s I 1(nc k) rlo ea a 1n se 0 .4 a % m W oit uh P nts a arr1 te ic .4 c % ipa alcnt ul aA te gd e a 1a m 0nd .5 o% ng Te pnur artic ei p ................................ 4 a.n 7% ts with 401 2(.k 2) % loans a ................. t 0.6% 15 57 .7% 30%Note e:nd Th20 e t19 enu . re variable is generally years working at current employer and thus may overstate years of participation p la Ac n p coun artt ic bipa ala6 nt nc 0% s’ esa a ss ree tne s a t to f ye un ar p-a eid nd loa 2019 n bal(a Fi nc ge ur se . Th 13u). s , unpaid loan balances are not included in any of the eight asset Size of 401(k) Plan Account Balances 30s Tabl 88 e .5 % A onnu f Cao l Re 3 nt .2% p e or nt ts. Wa s 1.2sh %ington, 0 .6 D % C: US D 0e .2 p % artment0 .of 2%Labor, 0E .2 m %ployee 0B .1 e% nefits Se 0.c 1ur %ity Adm 0.ini 1%stration. 5.5% 35 86.2 0.05262 5.26187 b Thu alas, a nce g w I 22% gns o ruld etg ita u te ttee nd fRe igur to sea e be s in t r c ph P ulle his e dr spe d re op w cor n tiv tif e g a e 12 lne a, rg rno. a elly nu 2 sh mb (ould Neov r o e f not m pb a e rticip bre ). us A av nts eadila tre o b le tire e st ad im t . w aw tew t.ic imi.or e tr ge/pd nds. f/pRe erc 1or 2-d 02 s w .pd er f.e encrypted Numb >1 e rS 0e o ,e 0 f 0 P Fi 0 la gn ure Ps a r13 tica ip nd an A2. ts 144 4,491,212 408,550,191,446 90,967 All >10 t40 o4 2 2 1( 0 .1k %) partic8 ipa 39 0..6 7nt %s’ ac 4c .0 ount 3b .5 a 2 % la .0nces, a 1 .set of 3 8.1%consi 0.5 ste1nt .0% p 0a .4rticipant 0 6..s 2 9 % must b 0e .2 ana 5.2% lyze 0d .1. Fut2ur .0% e 021% .1 researc0 h w .1 5.% 6ill 70.2% Equity, bond ye , a m r- o e n ne dy ., and/or balanced funds; in the 401(k) plan. 2019 EBRI/ICI 19% 21% 21% 21% 18% 40s Year • s 9 0 o .8 f % At y Tenuea re*r 4- .0 en % d 201 19 .6,% 87 per0 c.en 9%t of 40 0.1 3% (k) plan 0.s 3, % coverin 0.2 g % 8 17% 7 perc 0.1 en % t of 40 0 .17% 1 1 % (k) plan 0.1 par % ticipa1 n .8 ts %, categories described. 20% 16% 272 10 .3 19 0 F.o 1rm 65 6 51 500 16.5609 Media 16% n age: 45 16% years Available at www.d 15% ol.g 19% ov/agencies/ebsa/researchers/statistics/retirement-bulletins 19% /privat19% e-pension 19% -plan. 2 1 A >t2 0 A y e ltlo a r 3- 0 18% end 2019 18% 8, 7t .6 he ave4r.a 9ge acc2 ount .14% 6 74 18% , 6b 1a 2la1nc .14% 7 18% e was $81, 0.7 1401 a 1 0,nd .7 552 t,he 89 9 m 0e .3 dian acc 0ount .2 18% 95 3 b,a 6la 2 08 nc .2 ,2e 0 8w ,2 a2s1 0 $17, .1 587 (1Fi .2gur 18% 8e 1 ,7 14 ), 0 Joint Fi Int gr ur od e Cuc om 12 tion , m 40 i t................................ t1( ee k )on Pla Ta n As xatset ion. s A 20 re 19 C ................................ . onc Gee ne ntrraal Ex tedp in Equit lanation o ie ................................ sf C ................................ ertain Tax Legisla................................ tion Ena ................................ cted in the 11.......................... 5t..................... h Congress (JC 15 S 4 - before inclusion in the 17% database to conceal the identity of Fi g eu m re ploy 6 ers and employees, but were coded so that both could PercentaE ga e q n su d e a itr xa ie c e o s dm o m iln line a p c r-a lw u n e d lin y ie g h s k e te te q o dd u c a iv tk d y ea r a ftu g an e s d t.o s,a cna om ly pze an y the sto c consi k, an sd te tnt he sa eqm uitp yle p o of rtio pn a rot0 fic .b 6 ipa alant ncs in t ed fuhe nds E . B FRI un 1/I d 1s .C 6 iIn c dla ut da e c m olle utuc atl ion e funds 1 ff ,2 or b .3 atn . k 2220% (percent of participants) 50s 36 8S 9o .5u % rce: 4 T 0 a% b 4.u 2l% ations fro 1m .9 % EBRI/IC1 I .1 P % articipan 0t.-5 D % irected R 0.e 4t % irement 0 P .l2 a % n Data C 0o .1ll% ection Pr 0o .1 je % ct 0.1% 1.9% 0 to 2 8 13 4.4% 1 tTab o 25 ulations of the Survey16% of Consumer Finances 16% reveal that 58 percent of tradit3 ion .8% al IRA assets in 2019 resulted from At year-end 16% 2019, 9 61 33p .1 erc 0e .5 nt 69 o5 f 9no5 n6–.ta 95rg 89 et date balance15% d fund assets were assumed to be invested in equities (see included target date funds in their investment lineup. At year-end 2019, 31 percent of the assets in the >30 85.5 5.0 2.7 1.8 0.9 0.7 0.4 0.3 0.2 0.2 2.4 2 Holden, Sarah,4 D 01 a(nie k) lP Sc lahr n a Ass ss , ea ts nd Elena Barone Chism F. igure 2022 . 10 “Defined Contribution Plan Participants’ Activities, 2021.” 9 14% 7 but balances varied widely. For 1 exa 13% mple, more than three-quarte 13% rs of the participants in the 2019 EBRI/ICI 401(k) collective trusts, life insurance separate accounts, and any pooled investment product primarily invested in the security indicated. 60s A targe b t de Th a tt ee r fa 8 uc c 8 nro d .k 4 e t% 2 s yd s p - - i19) cb sae y llS y c . r tional o re A e u 4sea bv .ra 2 c a l% a e ila n r :a c cT e b na he s a le b ily tr s u s ove a s p la t is 1 o t.rht i 8 to fo f% on t lr ir p s o this s:/ m tfo r o ult b/w m e c p P iple o 1 ub E w m e .B 3 w er li % R c c l.jc y eIa s e e /s Ition ta C n .g fr o Its. c ov P u C fo s a 0 e /pub D h r .un d 6 ta ia % c otd n n ia p li g g tha a rp c o n e a r w tF ov - tt ti D h ions igure n co a ide 0 ir n .e T 4 ns dc % .h d o m to e o t t 12 for li d m a rd e lR a lf ? o R ting e e fun cta u e i0 rs ce t .e h p 3 c u m d the % = 12% r o en d n a n ow multi ir t n ItP c n ic o lnloa a d ipa mn e e 11% 0 p .D le a x nt 2sd % a e i a & t tinc s a c aid= c pC p o 12% lu ro un o52 ld a le c e ts 0 c h 33 d .t e 1 i a s o % d & c n aa ro n c P t d hk e s r ps o a of = js a e s 52 c e 0 ma b t s .i1 33 r th % tjority e h, & tano_ht fr rgom e o t d fa the tm w e 2 .o hic l= 6 f % t1 hh a e. fun nd, which Asset Allocation to Equities 12% >2 t o O 5 f which: target date funds are an option 17 0.4 11.7 13 11.8 EBRI/ICI 401(k) Database ................................................................ 7.5% ................................ 11% ................................ 10% .. 4 7.1% Fi rog llo ur ve e rs 13 fro , A m ve ermp age loy Ae ss r-e stp o An lls oc ore atd ion o retire f 401 ment (kp ) la Pns lan Ac . counts by Participant Age ....................................................... 16 Inve All stment Compa 89 ny .2 Instit3 ute .7 , Quarte 1.5rly Supp 0le .9mentary 0 .Dat 4 a). Th 0.e 3 allocation 0.2 to equiti 0.1es in ta0 rg .1et date 0 fu .1nds varie 3s .6 with 8% the US GeneE ra Bl Ac RI/I cC ount I 40 ing 1(kOffi ) dacte a. b19 ase 97w . e “r 40 e 1( inv ke ) st Pe ens d in t iona P rg lae ns t d : a Ltoa e fun n Pd rov s a isnd ions 60 E p nha ercnc ent e P of ar40 tic1( ipa k) tion b partic ut 9% ipa Ma ntys in t Affehe ct 401(k) Plan Characteristics by Plan Assets, 2019 Twenties is usually included in the fund’s name. All 26 to 81 90 .2 0 % ICIT Re en sea 3u .7r r % e ch Re Cop m or 1.p 5 t% o (Asi prti il)o . 0 n A .9 v % o aila f Sel ble a ecte 0t. 4w %ww d .i 401 ci. 0.o 3(k) rg % /fil Pl es/ an 02 .2 0 A % 2cco 2/21u _rpt 0n .1t % _rec Balan sur 0ce .v 1e % yq C 4ateg .pd0 f..1 o % ries 3.6% S1 o0 u% rce: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project database had2 a 0c % count balances tha 401 t w (k) ere Pl lo an w e A r sse than ts $81, Are 140 Co, ntcen he si tr ze ated of t he in Eq ave uriati ges e account balance. In fact, 40.1 p >ro 5 v to id 1 e0 rs to the single individual owning them resulted in an 25 overall increase of 2.6 percent in the averag 10 e 401(k) plan S&a Pg 5 E e 0q 0g u ¹r itoup y, b o isn a dss , m igne oned y;, d aa nt de/ oof r b hir ala en , c fr eom d fu w nd hic s;h a tenure range is assigned; outstanding loan balance; funds in the R elationship of EBRI/ICI 401(k) Database Plans to the Universe of All 401(k) Plans Thirties Among individual 401(k) plan participants, the allocation of account balances to equities (equity funds, company stock, 3 funds’ ta1rg toe 1t 0date1s 1. tFor o 25 targ 26e tt o d 5a 0te fu 51nd to 1 s0,0 inv 1e 0s 1 to to rs 25 0we 2r 5e 1 ta os 5s 0ume 02% 501 d t o to 1 ,0 b 0e 0 in 1,a 00 f 1un tod w2ho ,50s 1e to targ5 e ,0 t 0d 1 a to te wa >1 s0 ,ne 000aresA t llto Pl athe ns ir Income Security for Some.” Letter Report, GAO/ HEHS-98-5 (October). Washington, DC: US General 23 Sour dc ae ta s a band se Ty hep ld es of targe Dta d ta a t................................ e funds. Also known a ................................ s lifecycle funds, these ................................ funds a 1re designed t............................. o offer a diversified 4 Not all p articipants are offered this investmen P t e or pce tion n t(a sg ee e F o ig f u p ra e rA ti2 ci ).pants with account balances in specified ranges, 2019 Average Account Mitchell, Olivia S., and Step2hen Utkus. 2012. “Target Date Funds in 401(k) Retirement Plans.” NBER Working Paper, no. Ru s 1 > s 1 eAt 0 ll 2ty o 0e 0 2 0 a0 ²r-end 2019, 3 percent of the participants in the data 28 base were missing a birth date entry, were y7ounger than 20, or Fi pe grur ceent 14 of , Ta par rg tic eipa t Dnt ats ha e Fud nd as' cc40 oun 1(tk b ) aMa lanc rke es of t Sha lerss e ................................ than $10,000, while 19 ................................ .7 percent of participa ............................... nts had account 17 account balance. Th 401 is s(k tatis ) plan tic s ho av uld erag bee inte ass rp et re alloc ted w at ith ion, ca ution perc,ent as age it ma 11% of y 2no t,ot 50t 0al reas pre s5 s et ,e 00 nt s 0, the selec to 10ta ,0t0ed l 0401( years k) assets owned by participant’s investm 16e 3n 8t . 2portfolios; and Saix ss tie ets values attributed to those funds. An account balance for each participant 1 1T 0 c h 1 o e m t a on p 2 a a ,ly n 5s 0 yi0 ss itno cc lu k d;e a s n th de G 11 IC .8 s m a illn iod n/ o pa rrticipants in the year-end 2019 EBRI/ICI 401(k) database. 4 The ana65th a lynd si0% s it nb he cirthd lu de eq sa uit th ye . y Th 1 1 p.or e 8 m e tion o q illiuity on p f b ap ro tic a rti ilpa o anc n n tse w id n a s tfun h e e s yd tima ea s) r- ev te na dd r 2 ie 0 us s w 19 ing Eide B the RIly /IC ind a I r 4ound 0us 1(try k) d t a a he tv ae b a ra a sv e ge .er a eg qe uity of p 70 erc peent rcaegnt e fo for r the all p aa ss rt ig icne ipa d nt tas in t rget d he ate The Hold2019 eP n, lan Sa A ErB s as RI h, e t/I D sC aInie 40 l 1( Sckhr ) a dss at, ab Mic ase Tha otis a e ll B a P lrog a en pd s ra en sent , and ativ Je a son Se sa Tm otp ale lligma P of arttihe c ni. p 2022 a en st ts im . a“tA em d e uni ricv ae n Vie T ro se taof lw A s on 40 sse 1( ts D k)e fin plaens d .C A ont t yre ibut aB r-a e ion lnd ance A por cctount folio th 0%ing aOffi t aut ceom . Aa vtaic ila ally ble r e ab t a w la w nc we .g s t ao.g o bov e m /aor rce hiv foc e/1 us 99 ed 8/ on he98 inc00 om 5.p e d ov f.e r time. GICs B a lo ro e >m 2 g0 u ba e trro a g n 3 U te 0 S e d A ig ng ve re sg tm ae te n tB co on nd tr a In cd ts e .x ³ 26 4 Number of Participants in Plan 26.1% were olde17 r tha 911 (Ma n 69. r Th ch) ey. w Ca em reb no ridg t inc e, lud MA e: 22% dN in a tthis iona a 8l B naur lys eis a.u o f Economic Research. Available at 2 Investment Options........................................................................................................................................ 4 b the a ola t ind h nc ere iv s g s id ta ur b ae ll. e a tTh v ea re l u t ha imp e fn $100 ua ncd t sof ,000 acco un (Fitg cur ons e o 8li). d a The tion vva arrie iatdion in with the acc ount p1 a.rticip 3 baala nt’ nc s eas p ge aarnd tly 1 te r4 en .flect 7 ure s t with hethe eff e cc urre ts of nt 2p 0 ea .mp 8 rtic loy ipa ernt . 2 is the sum of the participant’s a 20ss 07ets in a 2008 ll funds. 2010 2 0P 11lan 2b 0a 13lanc2e 0s a 15 r 3e 1 2 . 0c 3 1onst 6 % r 2uc 017ted2 a 01s t 8 he 2 0su 19 m of all participant balances Y Ae t aa rr sg o eft T d 1 e a 9 n te 9 u 6 rfe und 2 t0 yp 0i0 cally2 r0 eb 0a 2 36 lanc2 e0 s0 it5 s po2 rt0 fo0 li7 o to b 2e 0c 0o 8me l2 e0 ss 0 9 focus 2e 0d 1 2 on gr2 o0 w1 th 3 and2 m 01 o4 re foc 2u 0s1 e5 d on 2 in 0c 1o 6me a 2s 0 1 it 7 appr2 o0 ac 1h 8es a2 n0 d1 9 A target date fund typically rebalances its portfolio to become less focused on growth and more focused on income as it approaches and passes the target date of the 5 Figure 15, Exposure to 10E0q o uit r ie fes I wenc r reased 10 A 1m to ong 50 0401(k) 5 P0 a1 rt tic oipa 1,0 nt 0s B 0 etw 1e ,0 e0 n 2007 1 to 5, 0a0nd 0 2019 ................................ >5,000 . 18 50% 2019 fund$ c0 d a a lc totula a $b 2a te 5se 0 d, 0us ( 0Fi 0 ing gur the e 13 Mo ).rning Forstta y-r nine 1 Life 8,1 time 0 p5 erc All ent o cof ation parInd ticipa exe nt ss ha 1(3 s2 e,ed 7 7 Mo m 1 or rning e tha stanr 80 2019 pe )$ r . c 1 Fe ,o 7 n r 1 t0 the of ,76 ta 9 he v ,5 eir 3 ra 1a gc ec 401( ountk b ) a pla lanc n $a e 1s s 2s,e 8t 85 2019 2,501, ta oll 401 10,00(0 k) plans held a total of $6.3 trill 1% ion in assets, and the database represents about 15 percent of that >30 Plan Saving, 2021.” ICI Research Report (Februa 18 ry). Availa3% ble at www.ici.org/system/files/20 3 22- EquitiesDis R ine clat lu t • d rib eio eq ut nship 4 uit0 y io 1 fun (k ndof s) p of , c o 40 a m Ag r pti a 1( n e c y ip k) a sto n a cP d n k,a ts a Tenu rt n’d in icipant thev e r es q e u itmen tt yo p s o’ Bala 40 rtiot in n 1( of k) co bnce al aP n m clan d ep d Fu a fu n n A d y nd c s st .c ou Al oclo nt k c c Ba a otn io la tins n nces u ed by a Ag t h eis torically low levels. Five percent 1 3% 62.7% www.nber.org/papers/w17911. Th a pg ae e ss , la etse rg nur th ee s t te ainc , rgsa ere t la d aa rsy te e, s o cin font tha ev r fibut e ura ndg ,ion e w h a ic cbc he o iha s un uv t sior u ba al, lla yr nc ollov incelu o de c er c ds fr urre in tom hd e a f umo ot ndhe ’ng s r n a p om ld la ee ns .r , pa articip sset a ants lloc a wtith ion, fe w wit er hdr yea aw rsa o lsf , te loa nun a re.c For tivite yxa , a mp nd le, fund, whi24 ch i s O us fu w alh lyi c in h c:l utd ae rg d e in t d tha et e fu n fu dn ’sd n sam a er.e an option 1.0 12.6 18.3 in the plan. Plan size is estimated as the sum of active participants in the plan and, as such, does not necessarily Dis>3 tribut 0 ion of Plans, Participants, and Assets by Plan Size ................................................................ 12% .................... 5 >$ At 25y 0 18 e ,0 a0 r- 0e tnd o $ 2019 625,0 , 022 0 percent of the1 p 1a ,6 rticip 01 ants in the databas1 e6 w 8,e 6r7 e2 missing a date of 4hire ,871 ,e 6ntry 20,3 a 2nd 7 were not includ 28 e,d 8 8in 2 US I4 nt 01e (kr)na Lol R an Be av lae nnue ces a sSe a Pr ev rc ic en et. a g19 e o81 f 40. 1(“ kN ) Pot lan ic A e c cof ounP t r Bop N ala u n ose m ceb s d e fo r rR P o ule afr tP ic l iMa p a an nt k s P ing, W art ithi c 4 C 0 ie p 1(r a kt )n a Ltin C o s ans a bsh y P laor n S D izee , fe 201 r9 red Arrangements Under allocation to equities (through equity funds, company stock, and the eq 9% uity portion of balanced funds) by participant age, see invested in equities, while 5 percent held no eq 38 uit .8% ies at all at the end of 2019 (Figure 15). Younger 401(k) plan Ye totaar l. - The E 02 nd /2 da 2_ 2019 tapbparse _dc aS _pla lsnaps o cn_s ove aho rv s ing. 20 t p o pd ef fr.c4 e0 nt1 of (k) the P uni ar ve tricipant se of activ se ’ A 40cc 1(ko ) unt plan p B aa rtlances icipants a nd 12 percent of all of 401(k) assets were invested in company stock at year-end 2019, in line with recent years. This share has 23 12% 40% Fi > (*1 g ) 0 = ur , 0 Le 0 e 0 s16 s t, hA an ss 0e .0 t5 A pllo erc ce an ttion D . istribution of 401(k) Participant Account Balance to Balanced Funds by Age ................... 19 A a Indivi mo g Ae ll ng ad nd ua paa l 401( rticip ccount ak nts ) b p a in ala r tthe nc icipa e ir a s nt r ix es’ tie pa osit sss we ith iv t e atw ly lloc o cor aotr rion to e fe law te ed r b ya aem la ars nc ong e of d p te fun anu rtic d re s v ipa 1,0 the 0 a nt .r0ie s c adv ov e w ra ide eg re ely d a c b ac y ro ound t un he 10 t 0 b 2019 a .a 0n a lanc vd e ea rinc taagb re ea a se. of se 34 d 5. E p xa 1 3 e 0 rp m 0 ce .e 0 ina rc nt e tnt a ion o t with f Note: Fue nm ds p inloy c> lu 2d e 0e rt o m c 3 uont t0 ual rfibut unds,ion ban k r a ct oe lles. This ctive trus tp s,a lp ifee ir n se uxa ranm ceine seps t arahe te a r ce co la un tions ts, anhip d anyb p eotow lee d e inn ve a stc mc eount nt pro db uc atla prnc ima e rs a ily innd vestp ed a r int ic thipa e sent cus’ ritya ig nde ic a atnd ed. >$ rS ei6 p z2 r ee 5 o sent ,0 f 0 A 0 c c tto o he u $n 1 t,tot 2 B 5a a 0l num l,a 0n 0c 0e ber of employ 10 e,e 9s 7 3 at the sponsoring firm 23. 1W ,74 it5 hin the year-end 92 ,9 01 70 9 ,1E 9B 9RI ,33 /I 3CI database, it 4 is3 ,022 this analysis. 19 Fi gure 13E . mployee Plans.” Federal Register 46, no. 217 (November 10): 55544–55549. Note: Fun p da sr itnic cipa ludent ms w utuae l frue n dm s,uc bah mor nk collee ct ilik ve e trly us tt so , liha fe iv ns eu 3 r 2 high a .4 n% ce sceonc parae te nt ar ca ct oions unts, a in e nd a q nuit y pie oos. A led it n vy ee sta mre-n et nd prod 2019 uct pr, im aab riout ly in vfour ested- fif in t th hs e sof ecurity indicated. 401( Rekla ) tp ions lans hip . of The E B dRI ist/I ribut CI 40 ion o 1(kf a ) Dss ateatb s, p ase arP tic laipa ns nt to s, a thend Univ plaens rse in t of he All 401 data( bk a)se Pla for ns 2019 ................................ is similar to the uni ................ verse of 6 Morningstar. P2019 lans. Morningst 1ar Lifetime Allocation Indexes (June). Chicago: Morningstar, Inc. Ava3 ila 1.b 5% le at Source: Tabulationsfa fro lle m n b EBR y I/ I7 C3 I Pp ae rtir cc ip e ant nt- D si irnc ecte ed 19 Re99 tire m w en he t Pn com lan Datap C aony llec tst ion o c Pk ro ja ec ctcounted for 19 percent of assets. Note: Funds include mutual funds, bank collective trusts, life insu F ra ig ncu er se e p2 ar2 ate accounts, and any pooled investment product primarily the co>n 1s 0o tli od 2a 0tion of their multiple accounts. Among participants in their fifties or sixties with more than 30 years of tenure, 2 the 8.7 % >$ y t t< he e 1 e $ nur ,a 1 2 r 0 a 5 O -,0 g e e 0 f,e nd . 0 0 w 0 0 c h 0 om i2019 c th o:p $ tosit a 2( r ,5 g Fi 0 e ion o g 0 t ur ,d 0 a 0 e tf a e 0 1 f2 u c) n c. o dFor s unt a re b exa a a la m nnc 1 o p 1p le ,e4 ts fin i,2 o 8 n 32 dps t erha cet nt 53 of pp ea r 9rcte ic nt ipa 3 of 8nt 8 06 ,p 1 s he .a 5 3r 2tic ld ipa no ntb s w alait nc h ead 8 c 2 6 cf 0 .ount unds, 9 ,531 ,9 b w 8 a5 la hil ,7 nc e 79 e48 s of 28 pele rc ss 8 e8 nt .t2 ha of n 54,013 possible to lin 27.k 2 % individuals across plans across a majority of the recordkeepers. This improves the ide1 nt 9ifi .6c % ation of active S 30 o% urce: Tabulations from EBRI/I2 C 6I. 9 P % articipant-Directed Retirement Plan Data Collection Project Figure 2 617 .5% , Asset Allocation Distribution of 401(k) Participant Account Balance to Balanced Funds by Tenure .............. 20 H Sold oure ce n, : T Sa abrua la h, ti oa nnd s fro Jm ac E k B Va RInD /ICIe P rhe arti. ici20 pan 01 t-D ai. re“c40 ted 1( R ke )t iP re la mn As ent P set lanA D lloc ataa C tion, ollectA iocnc ount Proje cB talances, and Loan Activity in 1999.” 25 Fac 1 tors Tha Pt e rAf cef ne ta cg t e40 of1( pla k) ns Participants’ Account Balances 25.5% 40 inv1( esk te)d p in la tn p he sa erctu ic riipa ty in nt ds in t icatedhe . Th ire ttw ene unt re ie vas ha riable d is m gor en ee rtaha llyn y e8 a0 p rs w eorrc ke innt g aof t cu the rren irt a em cc pount loyer a bna dla th nc use s inv may oe vst ere std a tin e e yea qruit s oie f s, p 37lans as ht retp por s:/ te /id nde byxe the s.m US ornin Dep ga st ra tm r.c eom nt of /reL sour abor c e(s/ FiP gD urF/ e uplo 2). ad/Morningstar%20Lifetime%20Alloc23% ation%20Summary_ Th • e poA siti m ve in co or rre ity la of 4 tion b 0e1 tw (k e) p en te a15% rnu tic re ip aa nd nts ac h co aun d lo t ba an las nc ou e is ts e tan xped cin ted g .b e At cay us ea er lon -end g-te 20 rm 19e , mp 18loy peere cs e nt ha v of e a ha ll 401 d mo(re k) time S A Ae g te a e >5 rFi g a tg e o nd ure t 1d 0a Te t19 enur fu in ne d H of to yld p40 ie cn, a1( ll y V k a r)e nD P bla ae la n P rhe nca i, er sa t ic ind tsipa p Ba ont rs tfs s o ................................ l2021a. io to be come less focus................................ ed on growth and more ................................ focused on income as it ......... 6 >$ a $2 v 1e ,0 5 ra ,0 00 g 0,e 0 0 0 ta o 0 c c $ to o 20 un $ ,0 6t 0 ,2 b 05 a0 la ,0 nc 00 e increa L so eda 2. n8 s 1 1 p F ,e 5rc ro 79 ent mw 4 ith 01 the (k c )o P n23 slo a lin das 7 tion 1 T 4,4 e 1o 6 9n f 2 .1 the d %e ir dmulti to p B lee a c S c 4m o 5un ,6a 3ts l 4l. ,3 34,35723 63,872 p $1 ar 0,00 ticipa 0 w nte s he re in t ld m he or ire t w tha ent n ie 80 s or pe rtc hir ent tie of s (tFi he gur ir e a c9 c)ount . Sim s ila in b rlya , la 61 nc p ee dr c fun ent d s a 2of 1.3tp % a the rtic e ipa ndn of ts w 2019 ith a(cFi co gunt ure b 1a 6la ). nc Ate s g yearre-a etnd er 21.8% 100% 2019 Form 5500 30% 20.0% participants and resulted in the reclassification of 0.4 million participant accounts that were multiple accounts owned by participation in the 401(k) plan. Forties Investment Company Institute Perspective 7, no. 1, and EBRI Issue Brief, no. 230 (January). Available at compared with 16 percent of 401(k) plan participants in their sixties. 18.4% 20% toa a pc pcrumu oac06 hla e24 te s a 19 a nn d%2 a pc ac0F so sun e IN st A th bL e a.p la ta d nc rfg .e e .t d Ha otw e e o 1v 6 f e .t 3h r, % e a f u ro nd ll,o v we hr icfro h im s uas u pa re lly v iou incs lu e dmp ed loy in te hr’s e f u pn la dn ’s cn oa uld me .interfere with this positive >$20,>2 00 0 top t5 o a r$ t3 ic0ipa ,00nt 0 s who were eligib 16.0l% e for loans had loans 26 outstanding against their 401(k) plan acc 20 ounts, down slightly >$I Fi 6 n a g ,2ur 5ny 0 e, 0 18 g 0iv 0, e t40 o n ye $1( 12k a ,) 5 r , 0 P0 tla he ,0 ns 0 c 0 ' ha Loa ng n O e in a ffer ing pa 4r,t9 a ic 5 nd ipa 0 P nt ar ’s a ticipa ccount nt Use ba la by nc P 6e 7 la 5in t n Size ,75he 3 ................................ database is the 43 ,su 01m 0, 3of 3 ................................ 1t,hr 71e 0e factors: 63... ,6 4 21 8 15.1% Percentage of eligible participants by participant age 14 , .6 2 % 019 2019 t 38 han , $1 68 00 p,00 erc0 w ente of re 40 in t 1( he k)ir p fif arttie ics or ipant si s he xtield s. The bala nc posit e1d 3 .iv fun 7% e d cor s trhr ela oug tion b h ta ertg weete d n a ate g 24% e fun an dd s a ac nd count non – bt aala rg nc ete d is a te expe bala ctnc ede d 14.8% 10 Y Se oa ur rc -E e:nd Tab 20 ula 19 tio nSna s frop m sh Eot BR of I/IC40 I P1( artk ic )i pP aa nr t-tD iciipa rectnt eds’ Re Atc irc eount ment P Bla an la D nc ate as C ................................ ollection Project ............................................ 9 si Engle ndn indiv ote idua s ls. This procedure allows EBRI and ICI to begin to consolidate account balances for individuals across See Holden, VanDerhei, and Bass 2021b. 12.0% This system of classification does not consider the number of distinct investment options presented to a given participant 2 https://www.ici.org/system/files/attachments/per07-01.pdf and www.ebri.org/docs/default-source/ebri-issue- Age and Tenure of 40 $18 1( ,94 k) 2 Plan Participants >$30,0 0 0 to 0 2 to $40,000 27$18,433 18 >$1 co 2rre ,50la 0,tion 000 b toe c $ 8a 2 0us 5 % ,0 e0 a 0 ,ro 00ll0 over could giv2 e, 7 a4 s 9hort-tenured employe7 e5 a 1 ,hig 41$ 6 h 1 8 a,c 1c2o 7un t balanc4 e7 . ,Th 70e 9,re 47 is 2, 4 so 2me 4 discernible ev 6id 3,e 4nc 93e GICs afr reom gu a yre aa nrte -e en dd in 20 ves 18 tm . eL noa t cns on tout ractst s.$ a1 nding 7,686 am $1ount 7,630 ed to 8 percent of the remaining account balance, on ave $r1a 7g ,5 e8 , 7 401(k) Plan Loan Activity Varie 37 s with Participant Age, Tenure, and Ac Ag ce o G unt Ba roup lanc $17,e 1 32 8.7% 7.8% $16,732 $16,836 7.5% fun becd as, usup e young from e65 r w po errkce 6 er .nt 5 s % ain re2018 likely . t o Thr hae ve e- fif low ths er of inc 40 om 1(eks a ) pnd arttic o ipa hant ve s he had ld le ta ss rg teim t d ea tto e a fun ccum ds, ula 911 te p ear cbea $ nt la 1 6 nc he ,0e 1 ld 0wnon ith t –heir 10% As set Allocation and Investment Options 6.0% $15,246 Fi da gtur a 5 .2 e p% r19 ov, ide Ferw s t 5. 940 o % p 1( rov k) ide Pa ra tic m ipa ornt e s H acca ur da Out te est staim nding ate of 40 a 1( ve kr)a L goa e a ns cc ; ount Loans b aTe lanc nde es p d te o r B indivi e Smdaua ll ................................ l. .. 22 but rather the types of options prese nted. P 4re .2% liminary research analyzing 1.4 million participants drawn from the 2000 P >la $4 n Sp 0,00onsor 0b to rie $f/ 5 0 C 02 ,ounc 00 01 0ib. il of pdfA . m erica. 2020. 63rd Annual Surv 4 27 e .9y % of Profit Sharing and 401(k) Plans: Reflect 16 ing 2019 Plan C 39han Fact ge ors Tha s in C t o Ance ffectnt 40 ra 1( tk io ) ns i Partn ic ipa Eqnt uit s’ ie Ac sc ount Since Batla hnc e e Fi s nanc ................................ ial Crisis ................................ 3.5% ..................... 9 >$2 5,00 •0 ,00N 0e tw o $c6ont 2,5r0ibut 0,00 ions 0 by the par 1t,ic 72 ipa 9 nt (+), the employ1 e,r 0 3 (3 +,) 8, 0or 5 both; 2.6% 66,186,106,134 64,022 of N ro otll eo : vF eu r na dsss e in $ ts c 1 l2 u a,d mo 5e 7 8 m ng u tthe ua2l . f 1p u % a nrticip ds$ , 1 b2 a a,nts n 6k 5 5 cw oith llecta iv ce c o trun ust tsb , alila fenc inessu rga re nc ae te s r etha parn at$100, e acc000, ounts a , s a n 3 dp a en rc ye p nt ooo le f d the inv m esha tmd e n tw t p or o od r ufe ctw er Plan-specific information on loan provisions is available for the majority of the plans in the sample (including virtually all of 401(k $)1 1 L,o 6a 0n 0 as a P ae t ry ce ea nr ta -e ge nd of20 Re 19 m, aid now ingn 2 30% percentage points from yea 1r .4 -% end 2018, and well below their historical average. Loan The database includes 401(k) participants across a wide range of ag 0e .5 % and tenure groups. At year-end 2019, 48 percent 0.0% I t ca n th ur rg re ee nt t d 2019 e am tep b loy EaB la RI enc r. /I e IC n dI a fun 40 dd1( d its, a ion k) d ,nd a the ta 3 b yp a a e se, rre c e85 le nt ss p he e lik rld c ee ly b nt ot t o of h.ha p Ta v ae rrtg irc e ollov ipa t dnt ae te s w r s fr fun eom rd e us in ae p p lv rae a ns v rie ious offe s w e it rin m h p g p loy a loa rte ic ns ripa ’s p . H nt la ow n in ae gv ee ta rhe ,nd rie r tlc a eur tnur ivre ee ly nt . fp ela w n 1 31 Ye >$5ar 0,0- 00 E tnd o $66 02019 0 ,0 % 00 Snapsho 23.8 t% of 401(k) Plan27 Loan Activity 15 EBRI/ICI 401(k) database suggests that the sheer number of investment options presented does not influence participants. >$6The 2 For ,50inv 0d ,0 ae 0 ta st 0 o m to n e $ 401( n 1t 2 5 op ,k 0)t0 ions p 0la ,0n 0 0 ta ha sste ts a ,p p la an o rticip ff676 e arnts s c,a a n signific nd plansa thro ntlyug aff h e9 2019 c4 t7 how ,3,3 s 9e p ea US rticDe ipapnt artme s alloc nt 58 a ,o 4 tf 3 eL 4 ta ,he 3 b5 o9 ir r, , 9 40 Emp 921(k loy ) a ess e Be ets. nefits Ta 6 1 r,g 6e 8t3 0% Experience. Chicago: Plan Sponsor Council of America. primarily invested in the security indicated. 401(k) Ac y c eo au rs • n to B f a te Tot lanu nc are e l inv , and est 9 m p ee nt rc e re nt tur of n o the n a m cha coun d be t tw baela enc n 20s tw es (± o an)d , w fivhic e y h d 30s ears ep o efnds tenu on re t40s (he se ep e Firg for ure m 1 a0 nc ). 50s e of financial 60s markets and All the small plans). Some plans without this information are classified as having a loan provision if any participant in the plan has Mor FigD ur e e e fin 40 20 it 1( aion o , m k40 )ount p 1( f 401 lakn p s, on ) La oa (k rt )n A a ic P vipa la ecrn Ac ta nt iv gis he e ty , c ount a Va ls ld o rie e d q B d euit a c A la rc ie enc ra oss s a sed e................................ t 40 yin 201 e1( ark -e ) nd 9. Pla 2 n P 01a 9r ttic ha ipa n a ................................ ntts y ................................ ear-end 2007, and ................................ a l................................ arger p 36% ercentage of ........... ..... 23 11 of participants were in their thirties or forties, while 14 percent of participants were in their twenties, 425 2.8p % ercent were Investment Options Y a p >c a oung $c r6ount t0 ic ,0 ipa e 0r 0 s. A nt p toa s m r $ ct7 cic oun 0a ipa ,0 d0 et 0 nt us bs w aela of e nc re e this sl and ight bor tly ernur o m wor ing e e a rp lik er iv e aly ls ile o tgo p eosit — hold wiv hic e ta ly h ha rg 27 ceor t s b r deala e te e t e n th fun d 26% ad e m s t c ong a ha se n o pfo ar r lde t ic the r ipa p 24 a nt rts in t iyce ipa arhe s nt ts. ha 2019 A t tt he y 13 e d a a drta -ae tb a nd a bse. a2019 se Aha , s 62 38.2% H olden, Sarah, and Jack VanDerhei. 2001b. “The Impact of Employer-Selected Investment Options on 401(k) Plan >$12 On 5,0a0v0 e,ra 00g 0e t,o p $ a2 rticip 50,0a 0nts 0,0 0ha 0 ve 10.4 distinc 374 t options but, on averag 9e 5,3 c ,8 ho 10 ose only 2.5 (Hold 65 e,n 06 a4 nd ,4 1V 4a ,6 nD 22 erhei 2001b). In 68,215 -1.5% S ecurity Administration 2021a and 2021b. For total re -2.tire 0% ment assets (including those in 401(k) plans) through the fourth da S to eu fun rced : s a Tabru el aa tin inv ons fe ro st m m E eB nt R Iop /ICtIion th Particait p a ha ntv -D ei rb ee ce te n inc d Rertie ra em singly offe ent Plan D re ad ta in 401 Collect(ik o) n p Pla rons jec a t nd increasingly used by Zero (no loan) 92 82 76 -4.4% 78 86 82 on the allocation of a -4ss .2% ets in an individual’s account; and an outstanding loan balance. This may understate the number of plans offering loans (or participants eligible for loans) 40% -4.4% y 26oung • er T inv he y estor eas ha r-en dd highe 201r9 c a onc vera entg re 4 ations 01 (k in ) p equit lan ie a s. O cco ve u 10 rn at ba ll, atlan yea cre in -end th 2019 e data , 5 p ba ers ce w ent a of s 40 10 1( .1 k )p p ercen lan t higher -10% in t >$7he 0,0 ir0 0 fif tt oie $s, a 80,0 nd 00 13 percent were in their sixties (Figure 27 3, upper panel). The median age of the p 12 articipants in the Size Inv Be e st c of am us 40 ee nt 1( 401( k op ) tP k io la ) ns n Ac pla a ns rc e oun 2019 w ge rre oup t EBR B ina e tro la dI /nc Id int Cuc Ieo s e ................................ e d ight abo ut bro 40 ady e ca ars te g ao gr oi,e s. o ................................ lde r and longer-tenure................................ d employees may not ha ..................... ve participated 11 Ava t p pre a ar rct ck ic >$ e ilab ent ipa d 2 5 40 of nt ilit 0,1( ’0 p s0 y a ak t 0 re ) ,t0 nur ic p nd 0ipa la 0e n p U nt w s s in t a it e rh a t of icipa n e he 4nt ir 01 m s. tpw (loy k) A ent te y P rie e lan L 448 ser s ara -v nd ee nd s a oans 63 2019 s a pe b p r, c ry e oxy 18 nt Pla p of fo en rrc p S e tahe nt iz r 5t,ic 7 e of le 6 ipa 2 ngth t ,hose 9 nt 9s in t 4 of etligib im hee irle a t hir for wo tie rlo k 5 s e a 9he r 0 ns ,ha 5ld 0 ha s p 4t,a d 6r a 140 g 4 re t,ic 0 1( t 1 ipa d 3 ka )t te p e la d fun n loa in t ds, c he ns 40 om 1 1( 0 p2 a k,r )4 e 6d 5 Fi Pot gur ere b a 21 , P Ja , a40 rm tic e 1( ipa s, St k)nt Le s’ oa ve A n B n F. sse atla Ve A nc llo nt ecs i, a ................................ t aion nd s: P Dav rid elim A. ina Wris ye Fi . 20 nding ................................ 07.s “.” Ris W eor of king 401( pa kp ) e Prla ................................ pns re, pL aifet redim for e E the arnin Ceg nt s, a ........................... er nd for W Pe ens altion a h at nd 24 addition, the preliminary analysis found that 401(k) participants are not naive—that is, when given n options, they do not >0 to 10 q pua erc rte enr t of 2021, see Investment Company Institute 2022 3 . For a disc8 ussion of trend 12 s between define 13 d benefit (DB) 8 and 9 401(k) plan participants (Figure 14). Target date funds were available in 87 percent of the 401(k) plans in the year-end beca • us e s W ome ithdr pa law ns a ls ma (-y) , ha bv or er o ow ffe ing red( a -) p , la and n loa loa n,n b rut epno ay m pa erticip nts (+ ant ). had taken out a loan. It is li -1 k1e .ly 0% that this omission is >$80,000 to $90,000 27 12 participant ths he an (p th ld erce y no entea e o qfr uit p before, bu la ie ns, d s) own fr t th omis 13 m p aey r n ceo nt t a atc c ye ua rr a-tel end y r 20 eflec 07 (Fi t th gur e ex e 15p ). erien Young ce of ty er 401( pkic ) a pl 4 art0 ic1 ipa (knt ) s were 2019 24 database is 45 years, similar to prior years. Because older participants tend to have larger account balances, 12.6% in 401( All k) plans for their entire careers.7 4 Th ,6e 1 2 Revenue Act of 1978 11c,o 7nta 52,8 ine 99d a provision tha 95t3 ,b6e2c8 a,me 208 ,Inte 221rnal Revenue Cod 81,e 14 0 out w pla ith n. st 58 anding I nd pee rc ee (d Fi nt , g69 ur of e p p e a 19 rrc t)ic e. nt ipa Loa of nn a ts in t pac rttiv ic he iipa tyir nt v si as w xt rie ie s w it s. h a it Eh a B cc RI oun g /I eC , tI t b e aa nur na lanc ly e, si ea s of s of nd a 40 le css c 1ount ( k tha ) p n $10,0 b laan ta lanc re g 00 . et Of th h da ad te ose fiv fun e por da rinv tfe icw e ipa st eror nt ys fin s in p ears of ds t lans ha te nur t the e, >1 -20 0% to1 2 90 9 d 6 iv pe id rc ee the n 1t9Re Re 9 ir 9a t tir ir ss e ee m m 32 ts 2e e 0 nt nt a 0mo 2 .” Re ng Nsea B 2 E a0 ll R Wor r0 cn 7 h (C . Ind k Ping e RR) 2e 0d 0,8 P C le aur p ss er re tha 2 , nt 0no. 1n 0 P1 e13 ns pe 2 09 ion P rc 20 1 (Ma e1 nt 2olic of y y p) a 2 .I 0 rtici ss C 1a ue 34 m pa s C bnts ridg onfe 2 0 fo e 1ll , 4r oMA e w nc e: d e 2 5 N , a 0a a 11/ t5 tiona n Mia as l B m s 2e 0 i U ur t 1a 6 e niv lla 4 ou o c eartion si 2 f Ec 0 ty 1, 7s onomi Oxfor trate 33 2 g0 d c 2 y 1 , .Re 8 OH sea , June r 2c 0h. 19 4 defined contrib 2ution 0% (DC) plans, see Poterba, Venti, and Wise 2007; Holden, Brady, and Hadley 2006; Brady and Bogdan 2010 Relationship of Age and Tenure to 401(k) Plan Account Balances .........................................................................13 Fi 20 ft19 y- td hr ae ta eb p ae se. rcent Thes of te he p la 40 ns 1( offe k) prla ens d t a for rg0 e w .t2 hic % dah te loa fun n d ds t ato a 87 we p re e racv ea nt ila of blet he in t phe ar t2019 icipant Es in t BRI/Ihe CI d 40 at1( ab ka ) se. data b Aa t se yea offe r-ernedd >$90,000 to $100,000 0.6% Fifties 26 11 References Fi sma gur ll,e a 22 s US , Loa Gens ne ra Frlom Acc 40 oun 1( ting k) P Offic lanse Te 1997 nded fo t un o d B e tha Sm t mo all r................................ e than 95 percent of 401( ................................ k) plans that offer loa ........................ ns had at least o 24 ne • Equity funds consist of pooled investments primarily invested in stocks, including equity mutual funds, bank Note: Tm heuc mh ed m iaor n p a e a r clik ti co c eu ip ly n ta tb o n ats hold lan . cC e ha e aq tnge uit yeie as in rs -e a nnd d a 2 p0 tao 1 r9 thold ic w ipa as nt high $1 ’s a 7,5c c 8onc c 7ount . ent b ra atla ions nce in e areq p uit rim iea s a rily t ydeue ar -te o nd the 2019 comc bom inap tion o ared f with year-end a ssets in the database are more heavily concentrated among the old 38er 401(k) participant groups. At year-end 2019, 63 Section 401(k). The law went into effect on January 1, 1980, but it was not until November 1981 that proposed regulations >20 to 30 w m offe p hil a ejror re cing e it 71 nyt loa of pens t rhe ce , nt m the of a rhighe ep a hold rtic st ipa ing pe nt one rc s w ent a it a g h a g ee -s of a cp count prp op ar rb tia ic atipa la e nc t1 nt ae rs w g s g et r itd eha a ttout e e rfun s tha t2 adnding n $100 . loa ,000 n b ha a 3ladnc m eor s w e e tha re n 10 ye a2 mong a pra sr tof icipa te1nur nts in e ( Ftigur heire 2 BrightScope and Investment Company Institute 2021 reports an a 39verage of 28 investment options in 2018 and an average of and 2016; 8 A – v a9, 2001 a nd ila Br ble a da .y t, w Burha ww.n m, be a rnd .or g H/p old ae pn er2012. s/w 41% 13 091. The >$10c 0ha ,00 nge 0 to in a $200 ny ,0 0indiv 0 idual participant’s account balanc25 e in the database is influenced by the mag 17% 8 nitude of these a 20 p19 lan lo , 60a p n p erc rov ent is ion to p of 401(k a)r tp ic la ipa n p nt asr t(ic Fi ipa gur nt es in t 18, upp he EeB rRI pa /I ne CIl). 40 1( The k) d loa ata n fe base atur he el d w t aa s m rgeor t d ea c tom e fun monly ds a nd assto ac rg iaett e d d aw te it h 39% 23% plan participant with an outstanding loan. -30% Year-End 2019 Snapshot of 401(k) Participants’ Asset Allocation ..............................................................................15 SourceA : lli Ta ng, bul a Btiro ia nn T. s fro,m a E nd B R Je I/Iff CrIe P y aW rti. ciC P pla a la n rn tk -s. D2021 irecte. dH R ow etir e Am m ee nrtic Pa la Sa n D va ets aP 2021 C ar otlilc eic . pta Va io n n tlle sPryo For jectge, PA: The Vanguar A ds s Gertoup s , 2007. For c c olle ont exa rcibut m tiv pe le ion t,r us a s, inv btout s, life e79 st m ins pe ent ur rc e arnt nc et ur e of sep ns 40 , a 1( arnd a kt)e w p a la itchdra n p count aw rts, a a icl ipa and nd nts in t ot loa hn a erhe p cool t iriv tiw e tyd e . nt inv To iees ha unde stmd er nt st ms. a or nd e c tha han 80 p nges in 401 ercent ( kof ) their p erc25 ent of 401( 0% k) plan assets were held by participants in their fifties or sixties, while 13 percent of 401(k) plan assets >30 E tB oR 8I0 /I C pe I r 4c 0e 1n (tk) Plan 2 4 4 3 2 3 were issued (see Holden, Brady, and Hadley 2006; Employee Benefit Research Institute 2018; and US Internal Revenue t Fi hir gur tie es, for A1, E tie Bs, or RI/IC fif I 40 tie1( s (kFi ) g Pur lan D e 20 a)t. ab In a ased ................................ dition, part20 icipants wit................................ h five or fewer years ................................ of tenure or with more ............. than 30 25 1 >0 $). 200 , 000 17 3 21 investment options when a target date fund suite is counted as a single investment option. 1 t hree factors relative to the starting account balance. For example, a contribution of a given dollar amount produces a la 2 fun rgdes w pla ens re (31 as m pee rc ae su ntr e of d 40 by 1( the k) num plan a bess r e of ts. N parot tic ipa all p nta s in rtic ipa thent ps a lan) re. offe About red 90 ta rpgeertc e dnt at eof fun pla dns s-- a wm ith mor ong pa er ttha icipa n 500 nts w ho -33.8% 100 or fewer 101 to 500 501 to 1,000 1,001 to 5,000 >5,000 Accoun Be t bfo ala re nc 2005, es are the par tUS icipDe antp a acrtme counnt t bo af laL na cb eo s r hp eriv ld ia nte 40 p 1e (k ns ) ion plan p s la atn th be ulle patins rtici pre an pto srte ’ cu dr ra e n cto e un mp t lo oy f e arc stiv an ed 401( are n ke ) t p olfa p nl ap na rticip loans.a nt Rest irement Datab40 ase • S amB Va plond engua : fun r d d s a C e nt r e e p r7 oole for 4,6 1 Re d 2 a t ir c c e ount m e nt s p Re r im sea a rr ily c h. inv 1 A1 ve .a 8 st ila m eb d illle iin b o n a t ond s. $ 2,31.0 trillion >80 perca ec nc tount b pa ala rtic nc ipa es inv nts’ easvte er da g in e e aqcuit count ies a b t ayla enc ar-ees, it nd (2019 is *) imp cor om tapnt ar e to (d * )a w na ith le lyzess a tsa ha (m n ha *)ple lf a of c t onsi year st (-* e e)nd nt p 20 ar07 tic.ipa Old nt (* e s. A )r 40 s w 1(k it)h (*) S Re w eerv c re e ic nt he e ly 1981) ld hir be y .dp a pratric tic ipa ipa ntnt s in t s we he reir m tw or ee nt lik iee s or ly t o thir hold ties t a (Fi rgg eur t d ea 3 te , low fune drs t pha ane n th l). ose Part ic wipa ith mor nts in 401 e year (s on k) pla the ns rjob ep3% : r easent t ye aar - H Rus old For Asell ss en, a e t20 c Sa A omp lloc 00 ra h, le I ande te t ion a Ja time c x. Ta k nd Va se c nD P om rie ae rsta r ic h o , ipa e f W i, the A nt L: uis p Fr Aeg a rc A e nk lons e ................................ nta Rus o, gesell aond f eC li St o gm e ibvp le ea n 401( ny B.a ss k) ................................ . p20 art13 icip . a “40 nts1( w kith ) Po lauts n As ta ................................ nd sein t A g lloc 401( atk ion, ) loaA ns cc oun an................... d tloa Ba nla anc mo eun s, 16 ts -40% -37.0% 11% 11% 11% 11% 11% y ears of Equittye Fnur undse were less Co m lik pae nly y S ttoo ck²use the loa Baln p ancer dov Funis dsion than otB he onr d Fp ua ndrsticipant Gs. ICsN anine d Ot hp ere Srtc ab elent Va of lue pa 9% rtic M ipa onent y Fs w undsith 10% 34 larger growth rate when added to a smaller account. On the othe 9%r hand, 9% investment returns of a given percentage w pa errte ic ipa offe nt re sd inc talude rgetd d a a tloa e fun n p drs, 69 p ovision, erc com entp he are ld d tw he Nu itm m h b 30 ae t r y p o e e fa r P r c-e le a nt nd n P of 20 art p19 la icns i.pa w Ta ntit sr h 10 o get da rt e fe fw und er paass rte ictipa s re nt ps. P resent artic ed ipa 35 nt loan 8% 8% savings S Fi urve h geur ld e y in sA p o 2 lf a , n ind D s is a iv t t rid p ibut ru ea vils ion o o uo sw ening m f 40 plo 1( y DC ek rs )p o P la rla n rns o a lle c, c dP o o a un vre tts ric i ipa n find to nt IR tha s, a As t a n DC rd e n A -o o ss w t ie ing ntcs b lu ind dy e div I.nv i dua est ls m aepnptre Op cia tte ion ts, 201 he inv 7% e 9s ................................ tment choice and contro ..l, 26 that had been adjusted from the number of active participants actually 8% reported in the ForFm und5500 s filings to exclude (1) https://institutional.vanguard.com/content/dam/inst/vanguard-has/insights- 6% partic • ipant B pr as w e la vnc ious ee re d E m fun Buc RI d h le /I s a CI r ss eupd p lik oole e aly te d s, a to aha cna coun vly e si su ts of s in ch hig vae st sa h em d c p onc in le b e of ot ntc h st ronsi ations oc st ke s a in e nt nd 40 quit 1( bond k ie)s a p s. The la t n p yea a yrr -ta e ic rnd e ipa c2019 la ntss s is ifi e ce om dxpe int pa c o tre e tw d d o tw o itb h ye e ar- e E w nd xa ide m 2019 r ini ange ng , 65 t he of p jint ob erc e e tre a nt nur c tof ion o e peaxp rf tb ic eot ripa iehnc nt ae g s w s. I e a itn nd h two 2019 tenur or , 44 e fe wp w itee h a rrc e ycn ecta ount rof s of the bta e p lnur aanc rte ic e s r ipa hee ld nt ve s in t ta ar ls g e the ha t d ta d , ta for et a fun baa se d gs, c iv e ha n om da g fiv pea erg eor rd oup w feit ,w h a e v r 56 e yr e aa gres of as a perca enta nd g Le oa on Ac f thet iv reitma y in 201 ining 401( 2.” IkC ) Ip Re lan sea acc ro ch un P t ebra spe lanc cteiv , e s e19 e H , o no. lden 12e, t a and l. 2013. EBRI Issue Brief, no. 394 (December). 27 Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project account balances of less than $10,000 had loans outstanding. 2 Asset Allocation and Investment Options ................................ Investment Category................................ 35 ............................................16 See Holden and VanDerhei 2001a. Some of this movement away from company stock may be the result of regulations put -50% produce larger dollar increases (or decreases) when compounded on a larger asset base. Asset allocation also p ac etriv ce itnt y vof arie the d m ass od ee ts of stly b py la n ps offe lan size, ring rasu ng cing h funds fromin t 14 he pe irr cinv ent e sof tmpeanrtt ic lin ipa eups. nts w ith loans outstanding in 401(k) plans (*)= Th le e s s s a a th m nd a pn le t 0 y o p .5 fic p p a a e ll rry tic ca e ip g na re tnte s tha chat nthe gesir ov pe la r n tim oe ff.e rs a good lineup of investment options. See Holden et al. 2022. ind *Thiv ei d teua nuls re e vliag riib ab le le to is p ga erticip neralla yt y ee in ars a w 401( orkin kg ) a ptla cn urw reho nt e ha mp dl ono yet r e ale nd c te thd us to m a ha y v oe ve the rstair te e y mp earloy s oe f rs pa ma rtick ip ea tcio on ntrib in th ution e 401 s; (k a ) nd pla n (2) . S&P 500. New York: Standard & Poor’s. p su db fs c/2 at1_ egC or Iie R_H s: t AaSr21 ge_ t L H ed sA a s t S_ Te h a F fu nSr nds $1 e0p ,0or a 00nd t.pd non f. –target date balanced funds. More Than $100,000 end 2007 p: ublish 16 pe erd c e la nt te of r this 401( ye ka ) rp . lan participants in their sixtie >$ s ha 40,0d 00 m –$5 or 0,e 00 t 0han 80 percent of their account balances t p ae c enur c rount cee nt , a of bnd ap laa 4 nc rtpic ees t ipa rce ent nt nd s w ha toit d inc h m m ror eor a ese e t ha tha wn 30 ye itn h te 10 nur to are 2 s of . 0 For yeta e e r nur s of xam e p t(e Fi le nur g , ur the ee , a 4 and )v. eThe r43 agep m e ae rcc d ce ount ia nt n of t eb nur p aa la re nc tic ae ipa t of the ntp s w a cu rtrit ic rh e ipa nt m nt or em s in t ep tloy ha he n 30 erir w sa ixt ys eie ars s Available at www.ici.org/pdf/per19-12.pdf and www.ebri.org/content/401(k)-plan-asset-allocation-account- 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Note: S 41 ee Figure A1 in the appendix for additional detail. inf in Th p lue lais cnc ema e bs inv yy the refle e P sc e tm t ns ceha ion ntng rPe e ro tsur te ins ns ction tit aute nd Ac dct ha b oyf nge the 2006 s in a Bi( pP aP rtis ss A)e a , tn w s. For hic Act h o lif emit xa 201 m ed 8, p the le w, hic st leoc h ng a kth ss (a eoxp f stime la m ine e a d psu abrtic r ye td ip he b a nts y Inte the crna o uld S& l R P b e e 50 v e re 0 t nq ue uire ot S ae l r drv to e ic t ur e ho 2020, n ld SoS uroc ue r:c e T w S :a it o T bu h a urb lc a 51 u e tlia :o tn T tio o a sn bf25 s u rS o lfa r o 0 p m to iu o m rE n ca s B e E r s R B ftric :Io R /T ipa m IIC a /I b C E I nt u B P I la P R a s tr a Iit /to riIo c tC n ic is I22 p i p P a fra n o ap n tr m -tte D i-c D rE iic r p iB r e e a e c nt R n cttIe t-/ e D Id of C d i R r IR e p P e e ca ta ttiie r rrrt e td e ic im c m R ipa ip e e ea n n tin ttrnt e tP P -m s i D lla ae in n rn 401( n e D tD c P ta a e ltt a a d a n C R C k D o e ) o a l tllie p lte r a c e lc a tm C itns o io o e n ln n l e P w tc P rP tit o r io o lh 10 o ja e n je n c P c t D tro ajte a rc fe tCo w lle ec r tp ioa nr t P ic ro ipa jecnt t a s ( nd Fi U gS ur e 18, middle Asset 1A to lloc 10 ation 11 ttoo 25Equit 26 ie to s ................................ 50 51 to 100 101 to 250 ................................ 251 to 500 501 to 1,000 1,00................................ 1 to 2,501 to 5,001 to ................................ >10,000 All Plans 17 nonvested former employees who had not (at the time the Form 5500 filings were submitted) incurred the break-in service 1 inv 11 est • • ed A T in e h ta e a r qg uit e vtera ie ds a ag tet e fun y4 e0 ad r 1- (k p eur nd ) p su 2019 lan es a a c long c om cop - utan erre t ba m d w inv lan ith 30 p est ce ten ment er c d se tsr nt to at of e g in y 40 , cr us 1( ea k ing )s e w pa la n m it ix of p ha par rticaipa ss tic e nt ip t s in t ca la nss t a he es, or gir e a si xt n ass d ie ten s a et a t lloc u yr ee. aart -ion, For end of w seve Mit int o h up e r n nur invey s e te t ma o e( r nFi tt s in w op g to iur o n2019 y se e a ra 17 e r ns of o,). t sup howtn fr e ; nur tom heree fosi re w x , cay os m epa $ or n 53 e s in 201 nt,363 s do no, t ac8 dom d. to 1 p 0a 0 r pe erd ce nw t. iPteh rce $ n32 tage3,3 s are27 dol lafor r-we ip gha ter dt ic aveipa ragent s. s in their sixties with more than 30 1 Source Averag : T Th ab eu a laste s b io e a n L t la s oa a nc fllro o n e c m s aBa - tion E and B lanc Rp -Ilo /aIth C ae In s tha P - a acrttt iiv the cit ipy a - ta n in trg -- D 2012 eirt ed ca t- e te 5325 d fu Re nd t.i r e fo m lle on w t s P S lta o iz n es D hift ofa A ta cits cC o u o fo n lle tc c us Bt 2 a i,o l 5 afro 0 n n 0 cP e m rog jero c 5t ,w 00th 0 to inc 10,o 00 me 0 over time is typically The S&P 500 is an index of 500 stocks chosen for market size, liquidity, and industry group representation. company stock contributed to their accounts by their employer; specified rules regarding the notification of blackout periods; a 2 mong other Dthing eparts m : e nt of Labor inde x) increased by 31.5 percent during 2019, while bonds (as measured by the Bloomberg US Aggregate Bond Index) B US pa loom ne Dle )p b . a e Lr roa t gm n r D ea nt a tEBRI Is a t ios of . NL — ea w stb uhe e or Y Bri or , aB m k efu : ount ir s re B eloom agu o i st of ef La rb ete d he rig nb tloa o L hr e .P U St n o .. S a .tut P is ast t tic ea ns. 202 tnding and Tr 2. ad div eN m ide a artkiona d O b ffy il C c et.he om ISS r N p e:e m 0ns 8a 8ini a 7t –ing 1on 37X a Sur /c 9c 0ount v 0e 88 y7: –b E 1a 3 m 7 la X pnc /loy 90e e $ — e .5a 0 B r+e e .5 ne low 0 fite s Sur r for vey. p Ne oriod t all pa re ticsita panb tsli a srhe e ofd fe rb edy t hthe is invir estp mlea nn; t op ttha ion (t sea e d Fijus guretme A2). nt was no longer possible beginning in 2005 (see US Department of Labor, 26 2 that the fund provider adj usts to become Nle um ss b efoc r of u Pa sed rticip on ants g inr ow Plant h and more focused on income as the fund 2007 Cha . A nge ce ross xa s in C m apll a le onc , gae e t nt g yr e roup a at rion -e s, ns in d a 20 low E19 qeuit , r p sh ie as Sinc a rtric eipa he e nt ld ts in t he no Fi ehe na quit ir n c ie for ia sl C taie tr s w is ye isa it r................................ - h mor end 20 e 19 tha c n two ompa tro edfiv ................................ weit y h ye eara s of r-end tenur 20e 07 ha . d........... an 17 y re efe arrr se of d to te nur as the e ( Fi gli gd ur e ep a 1th. 1). Be Sim caus ila e rd ly is , ctus he s ion ave s ro af ga es s ae ct count alloca b tion alanc use ua of llyp fo ar ctus icipa on nt the s in t perc he eir nta for ge tie os w f the ith up portfo to liot w inv o e ysete ar ds The Russell 2000 Index measures the performance of the 2,000 smallest US companies (based on total market capitalization) included in the Russell 3000 Index (which tracks 3 and required quarterly statements that must include a notice highlighting the importance of diversification (see Joint GICs are guaranteed investment contracts. inc Amrong eased pa r bty ic ipa 8.7 p nts w erce itnt h o (u Fitg st ur anding es 5 a nd 401( 6). k) loans at the end of 2019, the average unpaid balance was $6,950, participant Ws in la ashingt rgon, er 40 DC 1( : k US ) pD lae ns pa (ra tm s e m nt ea of sur Le ad b or by , B the ur enum au obf La er of bor p la St n ap tis atric tic s. A ipav nt as) ila. bA le m a ong t those in plans with 250 or Employee Benefits Security Administration 2012 for further detail). This change in methodology results in a dramatic increase 11 3 Note: Account balances are participant account balances held in 401(k) plans at the participants’ current employers and are net of plan loans. Retirement savings Holden, Sarah, Jack VanDerhei, Luis Alonso, and Steven Bass. 2016. “401(k) Plan Asset Allocation, Account Balances, Th a av pe p er rBi a og a pe c ahe rtis 40 s a 1( an k nd Bu ) pp dla a gn a ss et eAc c s it ct ount s t of a 2 r 018 b ga ela t ma nc dae nd te of .ate ad b out cha ng $42 es,000 to the , c om 401( pakr)e ha d w rdit sh a hip n a disv trib era ution ge 40 ru 1( lek s) . On plan a Nov ce cmb oun etr 14, The Blooin of mbe t ee q rgnur uiti USe e A s , g w gthe ra es ga $ g te22 li B do e ,854 n d p a Inth , dec xg om ie sn cp e oa ra mrpll e oy d s e re w d fle o it f h scets $ cu 19 the riti0,66 es d ce o7 c veli rfor ning ing gp o a p ver e rt n rc ic me ipa enta nt nt ag nd s in t e co of rpe o he rq auiti tir e bfor e os nd tin sie , m s w the ort g it p ah o ge rtfo m -ba or c liko e e d a t ha s s eit cn 20 ye ua rip tie psro , aa na c drhe s as s of s ea t-t nd be anur c p ke ade s s s . e ec su rities © 2022, Employee Benefit Research Institute –Education and Research Fund. All rights reserved Distribution of 401(k) Participants’ Balanced Fund Allocations by Age ...................................................................18 B Committe loombere g oUS n Tax Aga gtion rega20 te06) Bo.nd Index. New York: Bloomberg L.P. c hom eld ip n a plr ae nd s aw t pit re h vio $8 us ,162 emplo yin t ers he or r oy lle ed a r o- ve ernd int o2018 IRAs ad rea ntoa t b ina cse lude( dFi . Tg hur e te en u 21 re ) v. arThe iable im s ge ed ne ia ran lo lly yea an b rs wa orla kin nc g a et c out urrest nta ending mploye r w ana ds th$3, us m 343 ay at Note: Funds include mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investment product primarily invested in the security indicated. in few the e Sro u nu p rca emb w r : tTw ic ae bipa w ur la.b o tint of ls nind ss, t .g froov iv m he iE /n d B ua loa R cIs/ /ls ICn e Ire P b ras/ a p rtt o icb io rte ipe ane w nd t-a D fit a is rs es/ c 11 a te.c d ti p Rv ee te ir r e cp m ea ent n rt t ic Pof la ip n a t Dhe nts ata C rin o e llm e 401 cta ioini n ( Pk ng ro)j ep ca tla ss ns e;t s in in 2004, 2019 the , w hil nue mb in p er la of ns ac w tiv iteh mor particip e ta ha nts n 10,000 (rebalanced monthly by market capitalization). The index's total return consists of price appreciation/depreciation plus income as a percentage o 12 f the original investment. a 2018, nd L oa the n Ac Inte tiv rna ityl in 201 Revenue 4.” S IeC rv I ic Re e sea releracsh P ed e prro spe poc steiv de re 22 gula , no. tions 3, a tond imp Ele BRI me Int ssthe ue s Ber ie cha f, n no. ges423 . Ge n (A ep ra rll il) y. , the Avasila e ble • Non–target date balanced funds include asset allocation, or hybrid, funds and lifestyle funds. balance of more than $320,000 among participants in their sixties with more than 30 years of tenure. the target date, which is usually indicated in the fund’s name. The target date generally is the date at which the typical Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project Sources: Bloomberg, Frank Russell Company, and Standard & Poor's Y y 28e ea arr--e End nd 2019 2019, Sna com pp sh arot ed of w40 ith 1( $4 k) ,486 Pla n Loa in the n Ac yea tiv r-it end y ................................ 2018 database. The ................................ ratio of the loan outst.............................. anding to the 20 inc parre tic aipa sednt to s, t 53. he 1 loa milli n r on a( tio new w ame s 6tho pe dr)c e fro ntm (Fi 44. gur 4 e mil 18 lio, n low (old er me patho neld ). ; Isn th ee US e 24 Dey pe aa rtme rs tha nt to f the La b doar, ta Em base ploy ha ee s Be bene en tr fitsa cking At year-end 2019, 61 percent of non–target date balanced mutual fund assets were assumed to be invested in equities (see changes relax certain restrictions on taking a hardship distribution. Although the provisions are effective January 1, at https://www.ici.org/system/files/attachments/per22-03.pdf and https://www.ebri.org/docs/default- inv es •to r fo Com r wp ho am ny tha stot cfu k nd is e is q uit des yig in t ned he w p ola uld n’ s sponsor reach retire (me thent em agpelo aynd er )s.to p making new investments in the fund. r emaining account balance decreased, from 10 percent at year-end 2018 to 8 percent at year-end 2019 (Figure 19). In Security Administration 2018). As the US Department of Labor notes: “In a purely economic sense and for research purposes, loan activity among 401(k) plan pa rticipants, there has been little variation. Investment Company Institute, Quarterly Supplementary Data). Allocation to equities in target date funds is assumed to vary Availab sour 2019, ilityc a efo nd /e r bcUse ra i-le isnd su of a er 40 -b ye r1( ie ar k f/ )pe la P bla ns ri_i n Loa , b the _4 23 ns pro .p b py d o f? sP ela sf d n Size vre rsn gula =58 ................................ tions cb2 d 92 o f_ no 0t . re quire cha ................................ nges for 2018–2019. Eff ......................... ective January 1,20 2020, following issuance of final regulations, certain changes will be required. …Under the proposed regulations, e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e eb b b b b b b b b b b b b b b b b b b b b b b b b b b b b b b br r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r ri. i. i. i. i. i. i. i. i. i. i. i. i. i. i. i. i. i. i. i. i. i. i. i. i. i. i. i. i. i. i. i.o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o or r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r rg g g g g g g g g g g g g g g g g g g g g g g g g g g g g g g g IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIs s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s ss s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s su u u u u u u u u u u u u u u u u u u u u u u u u u u u u u u ue e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e B B B B B B B B B B B B B B B B B B B B B B B B B B B B B B B Br r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r rief ief ief ief ief ief ief ief ief ief ief ief ief ief ief ief ief ief ief ief ief ief ief ief ief ief ief ief ief ief ief ief A re • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • s e A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A Aa p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p prr r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r rc il il il il il il il il il il il il il il il il il il il il il il il il il il il il il il il ilh 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 r8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 e,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,p 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 o0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 r2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 t 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 fr o• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • m N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N to o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o o h................................e 557 557 557 557 557 557 557 557 557 557 557 557 557 557 557 557 557 557 557 557 557 557 557 557 557 557 557 557 557 557 557 557 EB RI Education and R esearch Fund © 2022 Employee Benefit Research Institute 11 28 29 20 15 13 24 12 18 25 22 14 16 30 27 33 19 21 23 26 17 10 32 31 8 7 4 2 5 6 3 9 48% Dec-07 37% 42% Jun-08 39% 44% Dec-08 43% 44% 40% Jun-09 39% 42% Dec-09 11% Jun-10 10% 8% 8% Dec-10 7% 7% Jun-11 6% 4% 5% Dec-11 5% Jun-12 15% 15% Dec-12 18% 21% 23% Jun-13 26% 27% Dec-13 30% 31% 34% Jun-14 8% Dec-14 12% 12% Jun-15 12% 9% 8% Dec-15 8% 8% Jun-16 8% 8% Dec-16 11% 15% Jun-17 10% 11% Dec-17 7% 6% 6% Jun-18 6% 6% Dec-18 7% Jun-19 4% 7% 4% Dec-19 4% 4% Jun-20 4% 3% Dec-20 2% 2% 1% Jun-21 Dec-21

401(k) Plan Asset Allocation, Account Balances, and Loan Activity in 2019

401(k) Plan Asset Allocation, Account Balances, and Loan Activity in 2019

Volume 557

Pages 33

EBRI_IB_557_K-XSec.3May22

EBRI Issue Brief

May 3, 2022

Sarah Holden

Steven Bass

Craig Copeland

Retirement