• About two-thirds of consistent 401(k) plan participants’ assets at year-end 2018 were invested in equities, including equity funds, the equity portion of target date funds, the equity portion of non–target date balanced funds, and company stock. The full analysis is being published simultaneously in September 2020 issues of EBRI Issue Brief and ICI Research Perspective. Media Relations Line: 202-371-5413 Matthew Beck, matthew.beck@ici.org Stephanie Ortbals-Tibbs, stephanie.ortbalstibbs@ici.org –ICI– Jeanne Arnold, jeanne.arnold@ici.org Garrett Hawkins, garrett.hawkins@ici.org Olivia Caverly, olivia.caverly@ici.org The Employee Benefit Research Institute is a private, nonpartisan, nonprofit research institute Steady 401(k) Participation Results in based in Washington, DC, that focuses on health, savings, retirement, and economic security issues. EBRI does not lobby and does not take policy positions. Higher Account Balances The Investment Company Institute (ICI) is the leading association representing regulated funds globally, Washington, DC; October 1, 2020—The average 401(k) plan account balance of “consistent including mutual funds, exchange-traded funds (ETFs), closed-end funds, and unit investment trusts (UITs) 401(k) participants”—those who remained active in the same 401(k) plans from year-end 2010 in the United States, and similar funds offered to investors in jurisdictions worldwide. ICI seeks to encourage through year-end 2018—almost tripled in that period, according to new data published today by the adherence to high ethical standards, promote public understanding, and otherwise advance the interests of Employee Benefit Research Institute (EBRI) and the Investment Company Institute (ICI). funds, their shareholders, directors, and advisers. ICI’s members manage total assets of US$26.0 trillion in the United States, serving more than 100 million US shareholders, and US$7.9 trillion in assets in other The study, “What Does Consistent Participation in 401(k) Plans Generate? Changes in 401(k) Plan jurisdictions. ICI carries out its international work through ICI Global, with offices in London, Hong Kong, Account Balances, 2010–2018,” examines the accounts of 1.9 million consistent 401(k) and Washington, DC. participants. The analysis finds that average 401(k) plan account balances for consistent participants rose from $63,756 to $180,251 during this period, with all age groups registering significant increases. Changes in 401(k) plan account balances reflect contributions (from both employers and participants), investment returns (which depend on financial market performance and the asset FOLLOW US ON: ICI.ORG @ICI INVESTMENT COMPANY INSTITUTE ICIVIDEO allocation of the account), withdrawals, and loan activity. Note: Account balances are participant account balances held in 401(k) plans at the participants’ current employers and are net of “These results again confirm the potential of 401(k) plans and powerfully demonstrate why they are plan loans. Retirement savings held in plans at previous employers or rolled over into IRAs are not included. a vit Source: T al sa abu vlin atigs vehi ons from EBRI/I cle,” CI P sai artici d Sara panth H -Direct olden, I ed RetirCI emen ’s t P seni lan or dire Data Colctor of r lection Project etirement and i nvestor research. “Tracking the account balances of a consistent group of 401(k) participants provides evidence of the ability of the 401(k) system to build a significant nest egg, helping millions of “The 401(k) system helps millions save and invest for their retirement,” said Jack VanDerhei, Americans save for retirement.” EBRI’s director of research. “Analyzing data from consistent participants over the past eight years, we see how 401(k) accounts grew over time among all age groups to help these savers meet their Why Does This Sample Group Matter? financial goals.” This study analyzes a subset of the 401(k) plan participants in the EBRI/ICI database—those who Key findings of the EBRI/ICI analysis of 401(k) participants include: remained in the same 401(k) plans between year-end 2010 and year-end 2018. It is important to study consistent participants because the average 401(k) account balance for the entire database can • The median 401(k) plan account balance for consistent participants increased at a compound be affected by 401(k) participants entering and leaving the database as they change jobs or retire, annual growth rate of 17.3 percent over the period, from $25,077 at year-end 2010 to and by plan sponsors entering and leaving the database as they change recordkeepers. EBRI and ICI $90,015 at year-end 2018. jointly publish a separate update examining cross sections of the whole database. Studying consistent participants allows for a more in-depth analysis of the potential for 401(k) participants to • Overall, the average account balance increased at a compound annual average growth rate of accumulate retirement savings over time. 13.9 percent from 2010 to 2018, rising from $63,756 to $180,251 at year-end 2018. Consistent 401(k) Participants Accumulate Significant Account Balances • At year-end 2018, 28 percent of the consistent group had more than $200,000 in their 401(k) Percentage of participants with account balances in specified ranges, year-end 2018 plan accounts at their current employers, while another 19 percent had between $100,000 and $200,000.