Ne ws from EBRI The full analysis is being published simultaneously in November 2018 issues of EBRI Issue Brief and ICI Research Perspective. FOR IMMEDIATE RELEASE Consistent 401(k) Participants Accumulate Significant Account Balances ### Contact: The Employee Benefit Research Institute is a private, nonpartisan, nonprofit research institute Betsy Jaffe based in Washington, DC, that focuses on health, savings, retirement, and economic security Director, Marketing and Public Relations issues. EBRI does not lobby and does not take policy positions. Employee Benefit Research Institute press-media@ebri.org The Investment Company Institute (ICI) is the leading association representing regulated funds 202.775.6347 globally, including mutual funds, exchange-traded funds (ETFs), closed-end funds, and unit investment trusts (UITs) in the United States, and similar funds offered to investors in jurisdictions worldwide. ICI seeks to encourage adherence to high ethical standards, promote Consistent 401(k) Participation Leads to Higher Account public understanding, and otherwise advance the interests of funds, their shareholders, directors, Balances and advisers. ICI’s members manage total assets of US$20.5 trillion in the United States, serving more than 100 million US shareholders, and US$6.7 trillion in assets in other jurisdictions. ICI 1 Washington, D.C. – November 6, 2018—The average 401(k) plan account balance of The number of 401(k) plan participants varies from year to year in the EBRI/ICI 401(k) database. The year -end 2016 EBRI/ICI carries out its international work through ICI Global, with offices in London, Hong Kong, and 401(k) “consi da stent tabase401(k represe ) npa ts 2 rticipa 7.1 millints” on 401( — k) pl those w an particho r ipants emaine . d active in the same 401(k) plans from 2 Washington, DC. The consistent sample is 6.1 million 401(k) plan participants with account balances at the end of each year from 2010 through year-end 2010 through year-end 2016 — more than doubled in that period, according to new data 2016. published today by the Employee Benefit Research Institute (EBRI) and the Investment Note: Account balances are participant account balances held in 401(k) plans at the participants’ current employers and are net Company Institute (ICI). of plan loans. Retirement savings held in plans at previous employers or rolled over into IRAs are not included. Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project The study, “What Does Consistent Participation in 401(k) Plans Generate? Changes in 401(k) Account Balances, 2010–2016,” examines the accounts of 6.1 million consistent 401(k) “The data in this report help us understand the importance of continuous participation in the participants. The analysis finds that average 401(k) plan account balances for consistent 401(k) system,” said Jack VanDerhei, EBRI’s director of research. “By analyzing data from participants increased by 122 percent during this period, with all age groups registering consistent participants over the past six years, we’re able to see that 401(k) plan accounts have a significant increases. 401(k) account balance growth reflects contributions of employers and very positive financial effect on retirement nest eggs, thus helping savers plan for the future.” workers, in addition to investment returns, and varies with participants’ asset allocation, withdrawals, and loan activity. Key findings of the EBRI/ICI analysis of 401(k) participants include: “Tracking the account balances of a consistent group of 401(k) participants highlights the growth potential of this powerful savings tool,” said Sarah Holden, ICI’s senior director of retirement ? The average 401(k) plan account balance of the consistent participants grew at a and investor research. “These results demonstrate the benefit of persistent saving and underscore compound annual average rate of 14.2 percent, from 2010 through year-end 2016, to how 401(k) plans have become such a vital savings vehicle for millions of Americans.” $167,330. This was more than double the average account balance of $75,358 among all participants in the EBRI/ICI 401(k) database at year-end 2016. Why Does This Sample Group Matter? ? Among the group of consistent participants, 26.4 percent had more than $200,000 in their This study analyzes a subset of the 27.1 million 401(k) plan participants in the EBRI/ICI 401(k) plan accounts at their current employers, while another 18.4 percent had database — those who remained active in the same 401(k) plans over the past six years. It is accumulated between $100,000 and $200,000. important to study consistent participants because the average 401(k) account balance for the database as a whole can be buffeted by 401(k) participants entering and leaving the database as ? About two-thirds of 401(k) participants’ assets were invested in equities at year-end they change jobs or retire, and by plan sponsors entering and leaving the database as they change 2016—whether through equity funds, the equity portion of target date and non–target recordkeepers. EBRI and ICI jointly publish a separate annual update examining large cross date balanced funds, or company stock. Asset allocations were broadly similar across the sections of the whole database. Studying consistent participants allows for a more in-depth consistent participant sample and participants in the broader EBRI/ICI 401(k) database at analysis of the potential for 401(k) participants to accumulate retirement savings over time. year-end 2016.