Figure 8 Exposure to Equities Increased Among 401(k) Participants Between 2007 and 2020 1 Endnotes Percentage of 401(k) participants by age of participant, year-end 2007 and year-end 2020 2 Percentage of Account Balance Invested in Equities 1 Holden, Sarah, Steven Bass, and Craig Copeland, “401(k) Plan Asset Allocation, Account Balances, and Loan Activity in 2020,” EBRI Issue Brief, no. 576, and ICI Research Perspective, vol. 28, no. 11 (November 2022). >80 percent >60 to 80 percent >40 to 60 percent >20 to 40 percent >0 to 20 percent Zero Investment in Retirement Plans: By the Numbers (2022) 2 Ibid. 3 Ibid. 14.7% 20.1% 4 Bearden, Bridget, and Michael Gropper, “ESG Investment Options in Public DC Plans,” EBRI Issue Brief, no. 552 30.1% 35.1% (Employee Benefit Research Institute, February 24, 2022). Summary Statistics 43.7% 43.5% 14.6% 48.5% 48.0% 51.9% 54.9% • Younger 401(k) plan participants tend to be invested more in equities than older 401(k) plan 77.3% 36.9% 77.8% 18.1% participants. On average, at year-end 2020, 69 percent of 401(k) participants’ assets were invested 23.8% in equity securities through equity funds, the equity portion of balanced funds, and company stock. Younger participants, as a group, had more than 80 percent of their 401(k) plan assets invested in 51.7% 23.0% 17.2% 1 19.1% 28.4% equities, compared with 56 percent of 401(k) plan assets among participants in their sixties. 23.8% 19.9% • Overall, 94 percent of 401(k) participants had at least some investment in equities at year-end 17.6% 33.9% 9.7% 7.0% 30.3% 11.2% 2020. More 401(k) plan participants held equities at year-end 2020 than before the financial market 3.8% 9.1% crisis (year-end 2007), and most had the majority of their accounts invested in equities. For 7.9% 7.1% 2.4% 6.3% 16.3% 5.3% 4.7% 12.5% 13.1% example, nearly 80 percent of participants in their twenties had more than 80 percent of their 3.9% 7.3% 3.8% 5.0% 2.5% 3.4% 4.7% 3.8% 401(k) plan accounts invested in equities at year-end 2020, up from less than half of pa 3rtic .6%ipants in 19.2% 3.9% 1.5% 2.5% 1.8% 17.7% 0.6% 2.9% 2.2% 0.9% 1.1% 2.0% 13.2% 2 12.2% 10.9% 10.8% 1.2% their twenties at year-end 2007. 7.7% 5.6% 5.9% 6.1% 6.7% 4.7% 2007 2020 2007 2020 2007 2020 2007 2020 2007 2020 2007 2020 • At year-end 2020, 86 percent of 401(k) plans, covering 87 percent of 401(k) plan participants, 20s 30s 40s 50s 60s All included target date funds in their investment lineup. Target date funds were 31 percent of the Age Group assets in the EBRI/ICI 401(k) database, and 59 percent of 401(k) participants in the database held 3 target date funds. 1 Participants include the 11.5 million 401(k) plan participants in the year-end 2020 EBRI/ICI 401(k) database and • In an th an e 21a .8lysis of p million 401u (kblic ) pla-n se pc arto ticr re ipanttire s in m the e n ye t aplan r-end s t 200 h 7a E t Boff RI/e ICre I dd ata ebn aviron se. mental, social, and governance 2 Equities include equity funds, company stock, and the equity portion of balanced funds. Funds include mutual (ESG) options, there was an overall ESG adoption rate of 31 percent. Conditional on being an ESG funds, bank collective trusts, life insurance separate accounts, and any pooled investment product primarily investor, the average proportion of the individual’s account allocated to the ESG fund was 14 Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project percent. There was meaningful variation in ESG adoption across participants by age, gender, Figure 7 4 account balance, and tenure. Target Date Funds' 401(k) Market Share Percentage of total 401(k) market, year-end 2007 2012 2017 2018 2019 2020 Average Asset Allocation of 401(k) Plan Accounts by Participant Age 86.5% 86.9%86.8% 1 86.3% Percentage of account balances, 2020 78.5% 77.8% 78.4% 77.3% 3, 4 74.0% 72.4% Balanced funds GICs and 69.5% 67.4% Age Equity Target Date Non-Target Date Bond Money Other Stable Company Memo: 2, 3 3 5 59.6% Group Funds Funds Balanced Funds Funds Funds Value Funds Stock Other Unknown Equities 58.8% 55.8% 55.5% 20s 33.5 50.2 5.5 4.9 0.3 1.7 0.9 1.3 1.4 84.3 30s 38.1 44.0 4.5 5.3 0.5 2.2 2.0 1.9 0.9 82.9 44.5% 40s 45.9 32.4 2.4 7.1 0.7 3.4 3.7 2.4 1.0 76.7 50s 43.4 28.4 2.9 9.1 0.9 5.8 4.4 2.5 0.9 66.2 60s 37.8 28.2 3.7 11.2 1.3 8.4 3.6 2.8 1.0 56.2 31.0% 30.7% 26.6% All 41.8 31.0 3.7 8.7 0.9 25.5% 5.6 3.7 2.5 1.0 68.5 25.3% 16.1% 1 Percentages are dollar-weighted averages. 2 7.5% A target date fund typically rebalances its portfolio to become less focused on growth and more focused on income as it approaches and passes the target date of the fund, which is usually included in the fund’s name. 3 Not all participants are offered this investment option (see Figure A7). Plan4s Offering Target Date Funds Participants Offered Target Date Funds Participants Holding Target Date Funds Target Date Fund Assets GICs are guaranteed investment contracts. 5 Equities include equity funds, company stock, and the equity portion of balanced funds. Note: A target date fund typically rebalances its portfolio to become less focused on growth and more focused on income as it approaches and Note: Funds include mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investment product primarily invested in passes the target date of the fund, which is usually included in the fund’s name. Funds include mutual funds, bank collective trusts, life insurance the security indicated. separate accounts, and any pooled investment product primarily invested in the security indicated. Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project