NEWS FROM THE EMPLOYEE BENEFIT RESEARCH INSTITUTE New Analysis of 401(k) Plan Data Finds That Active Plan Participation Results in Sizable Account Balances Cha For imm ngese in diat 401( e rel k) plan ac ease: Jun count e 30, 2022 balanc es are influenced by contributions, asset allocation, withdrawals, and loan activity. “The significan For more info t grormation: wth in thRon e 401( Drk) plan ac esner counts among the younger and new 401(k) participants highlights the importance of dresner@ contributions ebri.org and the power of compounding,” said Craig Copeland, director of wealth benefits research, EBRI. “Younger particip ants also tend to have higher allocations to equities, often through target date funds, as a result these consistent ( particip Washingt ants’ on, D balances refl .C.) -- A neect stock w study from mar ket the Invest performa mence nt Co durin mpany g th Ins e study titute pe (ICI) rio d and the .” Employee Benefit Research Institute (EBRI) released today finds that participants who consistently participated between 2010 and 2019 did accumulate sizable 401 Othe (k) plan acc r key findings from ount balan thces e rep . This ort inclu trend in th de that y e consis ounger tent 401 parti (k) pa cipa rtic nts’ ipan accou ts or t nthos balanc e wit es hig h smhlight aller year s the accum -end 2010 bala ulation ne ces ffect of o expe ngoing 401( rienced highe k) participa r percent grow tion. In fac th t, a in accoun t the end t bala of 2 nce 019 s , 33 percent of compared with the acti older participants ve group had or th more tha ose wit n $2 h larger ye 00,000 in t ar-eh nd 2010 eir 401(k) balances. plan accoun Th ts at their e research curr alsent employer o found that these co s, while anot nsisther 20 p ent 401(ercent ha k) participan d betwe ts ten en d t$10 o conc 0,000 entr and $200 ate their a ,00 cc 0. ounts in e In contras quity t, in the bro securitie ader EBR s. OIvera /ICI 401( ll, equit k) databas y fundse, 11 pe -- the equity rcent had portion acco ounts with f target dat me funds ore than and $200, other ba 000 and 9 lancep d fun ercent had ds and b co etwee mpany stoc n $100,000 k — and $200 represente ,00 d 0. abo ut two-thirds of their 401(k) plan account assets at both the beginning and end of the study period. The The st new udy st is b udy as ana ed ly on the zed ac Etive BRI/IC 401 I d (k) pa atabas rtic e of empl ipants wh oyer o m -spo aintain nsoed red 401( accouk) plan nts wits, h t ch oe same mpiled t pl hro an spo ugh a nso cor lle abo ach year fro rative resear m 201 ch 0 pro through ject und 2019 ertaken . Specifically, by the two o it track rganiza ed thtions s e account bal ince 19ances of 96. The pro 1.3 ject is un million 401( ique k) plan becaus partic e it includes da ipants whota pr hado acc vided by ounts i a n the wide va year riety -end of pla 201n rec 0 EBRI/ICI ordkeepers 401(k) databas and repre e and ea sents the ch s act ub ivity of parti sequent year cipa through nts in 40 year 1(k) plans o -end 201f va 9 (arying size nine-year p s fro eri m od). very larg e corpo rations to small businesses with a variety of investment options. The 2019 EBRI/ICI database includes statistical Key information findings o in t n 11.1 millio he study in n 401( clude:k) plan participants in 73,312 plans, which hold $0.9 trillion in assets and covers 18 percent of the universe of active 401(k) participants. • The average 401(k) plan account balance for consistent participants rose each year from 2010 through year-end 2019, with the exception of a slight decline in 2018. Overall, the average account balance increased at a compound annual Past reports about the EBRI/ICI 401(k) database can be viewed at www.ici.org/research/investors/ebri_ici . To review the average growth rate of 15.6 percent from 2010 to 2019, rising from $58,658 to $216,690 at year-end 2019. complete 18-page Issue Brief about the study, “What Does Consistent Participation in 401(k) Plans Generate? Changes in • The median 401(k) plan account balance for consistent participants increased at a compound annual average growth 401(k) Plan Account Balances, 2010–2019”, visit https://www.ebri.org/publications/research-publications/issue- rate of 18.8 percent over the period, to $108,433 at year-end 2019. briefs/content/what-does-consistent-participation-in-401(k)-plans-generate-changes-in-401(k)-plan-account-balances-2010- • The growth in 401(k) plan account balances for consistent participants generally exceeded the growth rate for all 2019 . participants in the EBRI/ICI 401(k) database. By year-end 2019, more than half (53 percent) of the consistent 401(k) plan participants had account balances of more than $100,000, compared with about one-fifth of 401(k) plan The Investment Company Institute is the leading association representing regulated investment funds. ICI’s mission is to participants in the entire EBRI/ICI 401(k) database. strengthen the foundation of the asset management industry for the ultimate benefit of the long-term individual investor. Its members include mutual funds, exchange-traded funds (ETFs), closed-end funds, and unit investment trusts (UITs) in the “401(k) plans remain one of the most important avenues toward a secure retirement, and the account growth for consistent United States, and UCITS and similar funds offered to investors in Europe, Asia and other jurisdictions. Its members manage 401(k) plan participants highlight the power of this important saving and investing tool,” said Sarah Holden, ICI senior director total assets of $29.7 trillion in the United States, serving more than 100 million investors, and an additional $9.3 trillion in of retirement and investor research. “While markets can be volatile, the compounding growth and upward trends we assets outside the United States. ICI has offices in Washington, DC, Brussels, London, and Hong Kong and carries out its observed during the nine-year study period shows the benefit of staying the course in their 401(k) plans.” international work through ICI Global. Consistent 401(k) Plan Participants Tend to Have Accumulated Larger Account Balances The Employee Benefit Research Institute is a non-profit, independent and unbiased resource organization that provides the Percentage of 401(k) plan participants with account balances in specified ranges, year-end 2019 most authoritative and object information about critical issues relating employee benefit programs in the United States. For more information, visit www.ebri.org. # # 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 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.