Ne ws from EBRI The and adv new stud isers. ICI’ y also s s mhow embs that m ers manage ore 401( total ass k) plan p ets of a US$22.4 tri rticipants holl ld equiti ion in the U es than be nited Stat fore the es, serving fina mornc e than 100 mil ial crisis of 200 lion US shar 8. About e 67 pe holders, and US$ rcent of 401(7.3 tr k) assets c illion in as ontinue sed ts to be in othe inve r jur sted in st isdictions. ICI ocks in c 201 arri 6, es out throug ith s int equit ernat y fun ional w ds, the ork thr equitough y portion of ICI Global balanc , wi eth of d funds, a fices in L nd condon, Hong Ko ompany stock. An ng, and W addit ashi ional 27 pe ngton, DCrc . ent of 401(k) assets were in fixed-income securities such as stable value DATE: September 10, 2018 investm ents, bond funds, money funds, and the fixed-income portion of balanced funds. CONTACT: EBRI Media Relations – press-media@ebri.org The Employee Benefit Research Institute is a private, nonpartisan, nonprofit research institute Jack VanDerhei, co-author – vanderhei@ebri.org based “Retire in ment sa Washive ngton, DC rs continue , that to i focuse nvest hea s on he vily alt in h, sav equitings, ies throug retireh their ment, and 401( ek) conomic plans,” sec said J urita yc k iss VanDe ues. EBR rhei, EB I doe RI s not rese lobby and doe arch director. “ s not Thou take gh thi poli s is c yin l posi arge tions. T part d he rive work o n by f EBRI younge is made r plan possi participa ble by nts, fundi saveng fr rs in their om its six me ties a mbers and s lso remain f ponsors, w ocused hich inc on growth a lude a br nd he oad range ld 55 perc of publ ent of the ic, ir Target Date Funds Widely Used by Younger Plan Participants 401(k private, for ) plan a -pr ssets i ofit, and nonpr n equity investm ofit organiz ents.” ati ons. For more information go to www.ebri.org Equities remain dominant investment choice in 401(k) plans In 2016, only 7 percent of 401(k) plan participants in their twenties had no equities, while 77 Washington, D.C. —Younger 401(k) plan participants have large allocations to target date and percent of these younger plan participants had more than 80 percent of their account balances other types of balanced funds, according to a new joint study released today by the Investment invested in equities. In comparison, 11 percent of 401(k) plan participants in their sixties had no Company Institute (ICI) and the Employee Benefit Research Institute (EBRI). At year-end 2016, equities, while 19 percent of them had more than 80 percent of their account balances invested in 64 percent of 401(k) participants in their twenties held target date funds, compared with 45 equities. percent of 401(k) participants in their sixties. Target date funds are a popular choice for 401(k) plans’ investment lineups. Other findings in the study include: The study, “401(k) Plan Asset Allocation, Account Balances, and Loan Activity in 2016,” shows Average 401(k) account balances increase with participant age and tenure. For example, at that among recently hired participants (those with two or fewer years of tenure) target date funds y ear-end 2016, participants in their forties with more than two years and up to five years of are used at a higher rate—59 percent—compared with 52 percent of all 401(k) plan participants tenure had an average 401(k) balance of about $38,000, while participants in their sixties with who invest in those funds. Target date funds are designed to offer a diversified portfolio that more than 30 years of tenure had an average 401(k) account balance of more than $287,000. focuses on growth for younger participants and automatically rebalances to focus more on fixed- income investments for workers as they near—and enter—retirement. 401(k) participants’ investment in company stock continued at historically low levels. Only 6 percent of 401(k) plan assets were invested in company stock at year-end 2016. This share has “Target date funds continue to be a widely available, widely used, popular, and convenient fallen by more than two-thirds since 1999, when company stock accounted for 19 percent of investment choice for retirement savers, as they offer portfolio diversification and automatic assets. rebalancing over time,” said Sarah Holden, ICI senior director of retirement and investor research. “Recently hired workers, in particular, often hold target date funds in their 401(k) plan 401(k) participant loan activity edged up slightly at year-end 2016 compared with year-end accounts, reflecting current 401(k) plan design.” 2015. At the end of 2016, 19 percent of all 401(k) participants who were eligible for loans had loans outstanding against their 401(k) accounts, slightly up from 18 percent at year-end 2015. Target Date Fund Ownership Tends to Be Higher Among Recent Hires Percentage of 401(k) plan participants holding target date funds by age, 2016 The study is based on the EBRI/ICI database of employer-sponsored 401(k) plans, the largest database of its kind, compiled through a collaborative research project undertaken by the two organizations since 1996. The 2016 EBRI/ICI database includes statistical information on 27.1 million 401(k) plan participants in 110,794 plans, which hold $2.0 trillion in assets and cover 49 percent of the universe of active 401(k) participants. Full results of the annual EBRI/ICI 401(k) database update are posted on each organization’s website, at www.ebri.org and www.ici.org/research./investors/ebri-ici ### The Investment Company Institute (ICI) is the leading association representing regulated funds globally, including mutual funds, exchange-traded funds (ETFs), closed-end funds, and unit 1221 investment trusts (UITs) in the United States, and similar funds offered to investors in juri EBRI sdicti on Twitter ons : @E Bw RIorld or httpw ://tide. witter.cICI se om/EBRIe k s to e ncourage adhe rence to hi EBRI R gh e SS: http thi ://fc eeal ds.festand edburnerar .com ds, pr /EBRI-R omote SS Note: Recently hired 401(k) plan participants are those with two or fewer years of tenure. public understanding, and otherwise advance the interests of funds, their shareholders, directors, Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project