The average 401(k) plan account balance of workers who participated consistently in one 401(k) plan increased significantly over the four-year period ending at year-end 2014, according to new data published today by the Employee Benefit Research Institute (EBRI) and the Investment Company Institute (ICI).

This Issue Brief provides an annual update of the longitudinal analysis of 401(k) plan participants drawn from the EBRI/ICI 401(k) database -- the largest, participant-level database of its kind, with about 24.9 million 401(k) participants at year-end 2014.

Because the annual cross sections cover participants with a wide range of participation experience in 401(k) plans, meaningful analysis of the potential for 401(k) participants to accumulate retirement assets must examine the 401(k) plan accounts of participants who maintained accounts over all of the years being studied (“consistent participants”). The main body of the Issue Brief focuses on consistent participants for the 2010-2014 period, while the appendix addresses the 2007-2014 period.

Two major insights emerge from looking at the 8.8 million consistent participants in the EBRI/ICI 401(k) database over the four-year period from year-end 2010 to year-end 2014.

1. The average 401(k) plan account balance for consistent participants rose each year from 2010 through year-end 2014. Overall, the average account balance increased at a compound annual average growth rate of 15.5 percent from 2010 to 2014, to $130,493 at year-end 2014.

2. The median (mid-point) 401(k) plan account balance for consistent participants increased at a compound annual average growth rate of 19.7 percent over the period, to $56,653 at year-end 2014.

Analysis of a consistent group of 401(k) participants highlights the impact of ongoing participation in 401(k) plans. At year-end 2014, the average account balance among consistent participants was 1.7 times the average account balance among all participants in the EBRI/ICI 401(k) database. The consistent group’s median balance was more than three times the median balance across all participants at year-end 2014.

Younger 401(k) participants or those with smaller year-end 2010 balances experienced higher percent growth in account balances compared with older participants or those with larger year-end 2010 balances. Three primary factors affect account balances: contributions, withdrawal and loan activity, and investment returns. The percent change in average account balance of participants in their 20s was heavily influenced by the relative size of their contributions to their account balances and increased at a compound average growth rate of 44.1 percent per year between year-end 2010 and year-end 2014.

401(k) participants tend to concentrate their accounts in equity securities. The asset allocation of the 8.8 million 401(k) plan participants in the consistent group was broadly similar to the asset allocation of the 24.9 million participants in the entire year-end 2014 EBRI/ICI 401(k) database. On average at year-end 2014, about two-thirds of 401(k) participants’ assets were invested in equities, either through equity funds, the equity portion of target-date funds, the equity portion of non-target-date balanced funds, or company stock. Younger 401(k) participants tend to have higher concentrations in equities than older 401(k) participants.

Figure 11 compared (Fi Age and Tenure of Consistent 401(k) Figure Between Appendix: Consiste $17 VanDerhei, References g0,2 ures 4, 90, mo 4, Co year-end 2010 an wit 5, Ja nsistent 4 h ck, Sarah re tha and an avera 6). n tw T 01 Holden, Luis A his tr g ice t (k) e d of $131,282 nt 401(k) Participan Particip anslates into he aver year- en aage n d ts A l20 onso, and Steven ac for partic a 14 ccumulate count compou , the U.S. Participants balanc ipants nd an Si stock market gnificant in t e ts 2007–2014 Ba of nual av h ss. 2015. $76, eir Ba 60s with more than 293 am erage lanc gen “What es growth eong rally rose ................................................................... 8 Does partici rate of 17. Consiste (Figure p an 10 to ts in 20 years 3 11 nt the entire EBRI/ICI percent ), Partic which of t ip over the four ation in 401(k) ten enur ds to e (Fi provi 401(k) g-year ure de a 5). Figure A Figure 6 5 Jack VanDerhei is director of Research at the Employee F Be igur nefit e 8 Research Institute (EBRI). Sarah Holden is senior What Does Consistent Participation in 401(k) Plans Domestic Stock and Bond Market Indexes Figure 9 24 For an analysis The cross-sectional EBRI/ICI of contribution activi 401(k) databa ty during the bear mar se also shows that younger p ket of 2000–200a 2 using the cro rticipants and those with shorter tenures tend ss-sectional EBRI/ICI 401(k) to boost to 4 database. Among consist perio Plans d. Th Th 0 Gen e1 m (e ke erat medi e )dian nt plan e? Cha partici accou an account 40 p nges 1(k ant nt ) balanc s holdi s in in th plan 40 account e amon eir 1(k ng equi 60s ) Acco g this at year- ties. On av bala unt Bala nce consiste en amo d 2 nces, era Figure A2 014, ng t g nt gr e, 2 a 007 h those e co o bup out –2 also nsistent two 013. with more - grew, ” thir ICpartici I Researc ds of t more than ph ant th e fi h P consistent sa ve to s an do was $ erspective 10 y ubl 87, ing e418 ars of t fr mple o 21, om $2 at year ne onur f. 4, a 7,55 40 -e e ha 1(k nd 0 nd ) 2 in d EBRI a 014, 2010 director of Retirement 1 and Investor Resea 401( 401(k) P k) Pllan A an rch at t Cccount Balances A on ht e riInv buet Figure 1 st io ment Com ns, Benm p eany Institute ong Consistent fits Disbur (ICI). Luis sed, Alonso is director of This a Barclays Ca ppendix pital U.S. A contains a ggre lon gate Bon gC itudinal hang d an I en s i de aly n x. Sa s 401( is tracking n Fr k)ancis Pla an c group of o, CA: Barc Accou 3.5 ntla B million ys Globa alanc 40 e l1(k Inv s A )e m plan stors. on partic g ipants who had accounts MAt year- onth-end Lev end 2010, el, Decem the consi ber stent grou 2006 to Decem p was similar i ber 2014 n age to the participants in the entire EBRI/ICI database. For Generate? Changes i Most 401(k) Plan Participants A n 401(k) Plan Account Balances, 2010– re in Plans With Employer Contributions Endnotes Figure 5, 401(k) Account Balances Among Consistent 401(k) Participants from 2010 Through 2014 ............................ 9 have lower 401 databases, see Holden and Va (k) plan balanc Consistent nDerhei 2004. es than those Consistent Sample who are ol The a Sample W nalysis fi Had der or have longer Longer Tenure Than Participants nds that as Older Than , overatenures. See ll, 401(k) participants’ Participants VanDerhei et al. contribution rates were little 2016. partici lower more than to $5 Issue Brie 6,65 average 401(k pants’ a 3 fo in uccount balanc 201 fr times th , no 4 . 41 (a com ) bala 8 e median (Se nc pes ound pe ($87,308) th tem wer annu b account er e i). Availa nvested in equ al a v balanc an those erage ble at e of $18,127 gro ww ities with ww.ici.or th(Fi rate o more than gur g/ e 7). for fpdf 19.7 parti /Su p 30 er2 p bdu cipants i ercent years of t 1-ed stock 04.pd ) n (Fi th f e g an nur e ur market perfor entire EBRI d e 4 e ($304, ). 622). /IC mance i I 401(k n )2011 was database. 401(k) Participants from 2007 Through 2014 Information in the year-e Technolo nd 2007 EBR gy an I/d Researc ICI 401(k) h Databases at E database and ea Bch RI. Steven subsequent Bass y is an ear thro associate econom ugh year-end 2014 ist at ICI. (a seven-yea This Issr ue Brief 180 Investment Returns, and Assets example, 34 percent of thC e o partici nsist pants i ent 401( n the consisten k) Particitp sa an mple ts f w ro em re 2010 T in their 2 h 0rs o ou r 30s gh 2014 in 2010, similar to 36 percent Percentage of active 401(k) participants in plans with 2014 22 in the EBRI/ICI 401(k) Database in the EBRI/ICI 401(k) Database at Year-End 2014 at Year-End 2014 Bloomberg Data. New York: Bloomber g L.P. changed in 2 000, 2001, and 2002 when compared to 1999. On aver6age, 401(k) participants’ contribution behavior does not follow https ed by st ://ww ronger w.ebri.org grow /p thdf in /bri 20 efs 12p throu df/EBRI_I gh 20 B_4 14, 18.S with ept1 part 5.icular LBar ongit-Ks cly str lays C .p ong a df apital ppr Ueciati .S. on in 2013 (Figure 11). While was written with assistance from the Institute’s research and editorial staffs. Any views expressed in this report are period). Average 401(k) plan balance f About 16 percent, or 3.5 millio or consist n, of theent 40 401(k) par 1(k) partictipants icipant wit s by age and t h accounts at enure, the e year-end 2007–2014 nd of 2007 in the EBRI/ICI employer contributions (Fig by plan assets, pl ure A4 an year 2006–2013) of the 23.4 million participants in the entire database (Figure 1). Thirty-two percent of the participants in the 25 Percent change in average 4 Fig 01u (kre 4 ) plan account balance among Figure 6, Changes in 401(k) Account Balances Among Consistent 401(k) Participants from 2010 Through 2014 ......... 10 Sept. 8, 2016 1 • No. 426 Annual flows reported on Form 5500 and year-end Percentage of participants by years of tenure, year-end 2007 and year-end 2014 At year-end 2014, 60 percen Percentage of t of non-target-date balanced participants by age, year-end 2010 and fund assets were assumed to year-end be invested in 2014 equities (see Changes in 2007–2014 Consistent 401(k) Participants’ Account Balances For example, as of December 31, 2014, the EBRI/ICI 401(k) database inc Figur 23 A e 5 ggregate B luded statis ond Index tical information on 24.9 million 4 4 01(k) appear to have been materially affected by the bear market in equities from 2000 through 2002, whether measured in dollar contributions and loan repayments also play a role in the growth of the average 401(k) plan account balances 160 those of the a 401(k) databau se are thors, and should in the 2007–2 not 014 be con ascribed to sistent sample the o.fficers, These trustees, or other consistent partici spo pan nts had sors of EBRI, accoun EBRI-E ts at the RF, en or d of their By Jack VanDerhei, EBRI; Sarah Holden, ICI; Figur Luis A e 3lonso, EBRI; and Steven Bass, ICI consistent sample were in their 40s in 20 C 10, whil onsist e 28 ent percen 401( tk) of Part participants i icipant n th s e entire database were in their 40s. consistent 401(k) participants by age and tenure, 2010–2014 Consistent 401(k) Participants assets, billions Age of Year of sPar of dollar tT icenur ipant e s, 2000–2015 Investment Co BrightScope an mpany I d Investment nstitute, Quarterly Su Company Inst ppl itute. ementary Data). The allocation to equiti 2015. The BrightScope/ICI Defined es in target-date funds Contribution Plan Pro varies w file: A Close ith the . 2011. “401(k) Plan Asset Allocatio 2006 20 n07 , Account 2008 Bal 20ances, an 09 2010 d Lo 20an Activity i 11 2012 n 20 201 13 0.” ICI Research Perspective Age Group Tenure (years) plan participants, in 81,139 employer-spons 2007 2008 ored 401(k) plans, holding $1.9 trillion 2009 2010 2011 in assets (see VanDe 2012 rhei et al. 2016). Usin 2013 2014 g amounts or percentage of sala Where the world turns for the facts ry they contributed. 401(k) Plan Account Balan on U.S. employee benefits. ces Among Consistent observed, 401(k) plan the acpattern count balanc of acc eo s tended to in unt balance growth crease rates y with boe th ag ar-to-y e aear a nd te lso refl nure among ects the the stock market 2007–2014 consistent performance. group o f staffs. Neither EBRI nor EBRI-ERF lobbies or takes positions on specific policy proposals. EBRI invites comment on this each year from 2007 through 2014. These 3.5 million 401(k) participants make up a group of consistent participants (or Figure 7, Aver Distribution of age Asset Allocation of 401(k) 401(k) Accounts by Participant A Plan Account Balances by ge ...................................................... Size of Accou Annual nt A Balance verage .......... 11 Thirty-four percent of the participants A in t ccumulat he consistent e Signif sample w icant ere in t Bha elances ir 50s or 60s, compared with 36 percent of Accumulate Significant Balances 20s 30s 40s 50s 60s 0 to 2 >2 to 5 >5 to 10 >10 to 20 >20 to 30 >30 20sLook at 401(k All ) Plans, 2 $2, 01 688 3. San Di$3, ego, 931 CA: Bri$8, ghtScope 507 and $12,Washi 882 ngt$15, on, DC: 287 Invest $20, ment Com 484 $25, pan 332 y Institute. $30,896 funds’ target dates. For target-date funds, investors were assumed to be in a fund whose target date was nearest to their 17, no. 10, and EBRI Issue Brief, no. 366 (December). Available at www.ici.org/pdf/per17-10.pdf and National Compensation Survey data and historical relationships and trends In evid teresent in the t, Form 5500 data, EBRI and ICI 140 participants, aAg s they e do in Tenur the cross-sectio e 401(k) P nal EBR articip I/ICI ant 4 s f 01(k rom ) data 2010 T base. You hrou ng ger h 2014 participants or Grow th th R ose with ate, shorter job a lon research. gitudinal sample), which removes the effect of participants and plans entering and leaving the database. S&P 500² Percentage of participants with account participants in the EBRI/ICI database overall. 13 >5 to 10 2,218 3,644 8,394 12,914 15,591 21,065 25,931 31,843 Average Average 65th birthday. See Holden and Schrass 2 Available at The equity www.ici.or po016 rtio g/pdf 6%n was estimated using the i . /ppr_15_dcplan_profile_4 ndust 01k.pdf ry av erag Div e equity perce idends, 96 ntage for the assigned target-date www.ebri.org/pdf/briefspdf/EBRI_IB_12-2011_No366_401%28k%29-Update. 95 95 pdf 4% estimate the number of active 401(k) participants to be ab 5% out 55 million in 2014 a 94 95 nd the number of 40 5% 1(k) plans to be about Figure Retirement 8, 401(k) Plan Co Groupand health benefits are at the heart of w (ntributions, I years) 2010–2011 nvestme 94 2011–2012 nt Returns 10% , Benefits 2012–2013 94Disbursed, a orker 2013–2014 94 s’, emplo nd Assets 2010-2014 ye 11% ....................................... rs’, and our nation’s 2010–2014 .. 12 tenures Introduction at their current employers tended to have smaller account balances, while those who were older or had longer Average 401(k) plan balance for cons 93 istent 401(k) 30s All 19,703 17,020 28,987 38,633 14% 42,236 53,067 68,991 81,133 balances in specified 92 ranges, year-end 2014 91 91 91 12% $170,290 Total Total Benefits Gains, and Assets at 90 89 89 fund calculated using the Morningstar Lifecycle Allocation Index. 24 88 89 $130,493 What Does Consistent Participation in 401(k) Plans 20s All 51.1% 52.8% 48.7% 25.7% 331.3% 44.1% 88 535,000 (see n economic security ote 2 in VanDe . Fo rhei et al. 2016; and U.S. Dep unded in 1978, EBRI is artme the most authoritative and objective source of nt of Labor, Employee Benefits Security 87 10% Administration 88 Age and Tenure Composition of the 2007–2014 >5 to 10 9,234 10,259 11% 20,886 Sample 30,041 of Consistent 34,449 401(k) Participants 45,105 87 60,285 73,220 120 14% 86 The job tenur About the EBRI/ICI 401(k) Database tenures te e composition o nded to have f t h high e consistent ep r acco articiun pa sample a n t bala ts by nces ag lso w e a (Fin g as d ure tenu similar to t A4re, ). y ear-e he te ndnure 2010 com –201 position o 4 f 401(k) participants in The 14 EBRI/ICI 401(k) database, which is constructed fro 1 m the admi 2 nistrative recor 3 ds of 401(k 4 ) plans, represents a large 1 85 1 Contributions Disbursed Other Items Year-End Deloitte Consulting LLP, International Foundation of Employee Benefit Plans, and the International Society of Certified For the complete update fro EBRI/ICI 401(k) Databasem the year-end 2014 EBRI/ICI 401(k) database, see VanDerhei et al. 2016. . 201 EB6. RI/I “4 CI 4 01 01(k) Pla (k) Databa n se Asset Allocation, Account Balances, and Loan Activity in 2014.” ICI Research Perspective >2 to 5 123.3% 85.5% 64.8% 34.7% 819.5% 74.1% Figure 9, Most >10 t 401(k o 20) Plan Participants 30,558 24, Are 165 in Plans Wit 7 38,410 h Employer 49,108 Contributions 52,332 .............................................. 64,095 81,714 94, ...... 14 291 information on these critical, complex issues. 28% 1 2015). At year-end 2014, 401(k) plan assets were $4.6 trillion (see Investment Company Institute 2016). The 2014 EBRI/ICI Suggested citation: VanDerhei, Jack, Sarah Holden, 26% Luis Alonso, and Steven Bass. 2016. “What Does Consistent the year Generate? Changes i -end 2010 EB 79 RI/ICI 401(kT)enur data e bn ase. 401(k) Plan Account Balances, 2010– For example, 32 percent of the consistent sample had five or fewer 26 78 $151,961 cross section, Initially, the 277 007 or snap –2014 shot, of 401( con 2 sistent sample k) plans at th was demo e end of grap each year. hically similar It i to the s a cros es n s tire ecti EBRI/ICI on of the 4 entir 01(k) database e population o at year- f The EBRI/ICI 39.9% Participant-Dir 2 ected Retir 2000 ement P 169lan Data Collect 172 ion Project is the la -52 rgest, most repr 1,739 esentative repository 26% For a description of the inves Employee Ben 76efit Spec >5 to 10 tment options, ialists. 40.1% 2015. see page 13. Annua 46.6% l Define d Co 44.5% ntribution 23.8% Benchm267. arking 3%Survey: 20 38.4% 15 Edition. New 40s22, no. 3, an Alld EBRI Issue 57,385 Brief, no. 4 42,686 23 (April). Availa 64,823 ble at 80, ww 020w.ici.or 21% 83, g/pdf 852/per22100, -03.pd 684 f and 127,675 145,860 Consistent Sample $116,203 Consistent Sample In any given year, the change in 73 72 a participant’s account balance is a combination of three factors: 15 database covers 45 percent of 72 the universe of 401(k) plan participants, 15 percent of plans, and 42 percent of 401(k) plan 100 Participation in 401(A k) Plans ge Group Generat (year e? Ch s) anges 21% 2010 in 401(k) Accou 2011 nt Ba2012 lances, 2007–2 2013014.” EB 2014 RI Issue Brief, no. 426, 71 years of t enure in 2010, compared with 39 percent of participants in the entire EBRI/ICI 401(k25% ) database (Figure 2). 401(k) plan The EBRI/ICI 401(k) databas participants, and it e environment represents a is certified to b wide range ofe pa fully compliant with the ISO rticipants—including those -27002 Information Security Audit who are young and individuals end of in 20 formation 07 (Figure A about 1). in Howe dividual 401(k) pla ver, by y 2001 ear-e nnd part 174 20icipa 14, tnhes t accounts. As of e p 148 articipan33% ts Dec had -60ember grown ol 31der an 1,706 , 2014, d acc the EB rueRI/ICI d long 40 er job t 1(k) enures 2014 >5 t 30s o 10 A 19, ll 008 17.0% 18,297 29.7% 34,416 35.2% 47,474 18.8% 53,150 143.5% 67,745 24.9% 89,213 107,570 York: Deloitte Consulting LLP. Available at https://www.iscebs.org/Documents/PDF/15DCBenchmarking.pdf Figure 10, One-Fifth of Eligible 401(k) Plan Participants Have Loans Outstanding ..................................................... 14 www.ebri.org/pdf/briefspdf/EBRI_IB_423.Apr16.401k-Update.pdf 27% EBRI focuses solely on employee benefits research — no lobbying or advocacy. 20s All $6,128 $9,257 $14,144 $21,026 $26,428 27 assets. EBRI Employee Benefit Research Institute Issue Brief (ISSN 0887 ?137X) is published by the Employee Benefit Research Institute, 1100 and ICI Research Perspective 22, No. 5 (September 2016). Available at www.ebri.org and www.ici.org Eighteen perc >10 t ent of o 20 the con 60, sistent sample 492 44,360 had more 68, tha 008n 20 years 83,631 of tenure 87, in 395 2010, as di 104,912 d 15 per133, cent of 120 the 151,930 >2 to 5 200245.4% 57.6% 51.1% 31.2% 354.8% 46.0% w standard. More (the Data from the ho minim are neum w to tenur over, EBRI has obtained a t ICI Surve heir jo e possible for bs y, of D as w efined Contribution Plan Record ell a this s ogro ld legal opinion that the methodolo eu r p p is 182 ar seven ticipan ye ts an ars 147 d) compared agai th keepers find t ose who gy used h -1 a72 ve hat DC plan nst the bemeets en w e 1,569 in th the privacy sta tire EB pa trticipants generally stayed the heir c RI/ICI urren 40 t e ndards of the m 1(k pl)o data yers f base. o Gramm- r ma ny database included statistical information about 24.9 million 401(k) plan participants, in 81,139 employer-sponsored 13t ? h S Ne t. N w contr W EBRI , Suitibuti e 8 stand 78, ons Ws a by th shi alone in em ngtoe n, D par >2 t C,t o 5 icipant 200 pl05 oyee -4 ( 05+ $2, 1, ben ), at 838 the em $3 efits 00 pe rese r y ployer $6,337 ear o arch r i (s + in a ), or cl sud $11, an ed both; 758 inde as par pend t of$19,377 a memb ent, nonprofit, and no ership $26, subs 096 cription. Pres npa ortrtisan ed By Jack VanDerhei, EBRI; Sarah Holden, ICI; Luis Alonso, EBRI; and Steven Bass, ICI 80 >20 to 30 100,109 70,831 100,535 118,973 122,087$123,967 142,476 176,608 197,106 >5 to 10 23.2% 35.4% 38.6% 22.8% 184.0% 29.8% participants in the entire EBRI/ICI 2003 401(k) database. 187 141 323 1,937 years. For Leach-Bliley Ac Holden, course thro Sarah exa ugh the financial cr , and Da m t. At no time has any nonpub ple, at year niel S-end 2014, chrass. 20 isis. The vast 13 16. lmajo “De percent of 401(k) ic personal information that is personally fine rity o d Cont f DC plan ribution participan partic Pla ipa n n Pts in th ts co articipants’ Ac ntinued co e EB identifiable, such as a Social Security RI/ICI 4 tivities, 2 ntributing and 01(k) dat 015.” o abase ICI R nly a negligible sha ewere search in Report their re VanDerhei, Figure 401(k) plans, stan 11, dar Do d Ja pomestic Stock s ck, Sarah holdin tage rat g e p $1. Holden, Luis A aid9 t ina D rillion nu d lles Bond Mark , V in A.assets. The PlO onso, and Crai STet Indexes MASTE 20 R: S 14 end ............................................................................. g EC ad Bopelan RI/ICI dress ch 4 dan . 02008. “401(k) Pla 1 ge (s t k)o database : EBRI Issue co Brvered 45 ie n f,Asset Allocatio 1100 13t perc h St. N ent of Wn , S , Account uit the e 8 ................ 15 u 78, n iv erse of 2 1 organization. It analyzes a >5 to 10nd rep 7,647 orts resea 10,712 rch data without 15,701 spin o 22, r 683 underlying 28,087 agenda. All findings, $92,745 EBRI/ICI 401(k) Database 50s Because of these changes in the cross secti All 106, 32% 137 77,341 ons, comparin 28%109,249 g average accou 129,343 nt balances acr 133,706 o155, ss different ye 26%546 190, ar- 991 end cross 214,612 >10 to 20 10.6% 23.3% 31.1% 15.4% 106.3% 19.8% Washington, DC, 20005-4051. Copyright 2016 by Employee Benefit Research Institute. All rights reserved. No. 426. 25% 2004 204 167 225 2,199 (June). Available at www.ici.org/pdf/ppr_15_rec_survey.pdf 20s, w number, been t took withdrawa hile 11 perce lrs; in addition, ansferred to or shared with E nt were in a minority their 60s of participants rebalanced either (FigB ure RI. 1); 18 percent of partici their co pants ha ntribu d tw tion o or f investmen ewer year 24% t allocati s of te on nure s or t at heir their active 401(k) Balances, ? Withdrawa wheth plan and partic lLoan Activity i s (-), e r 30 on fi sipa borrowi nan nts, 15 perc cial ng (-), n 2 data, A 007. ll en and loan ” option t of Inve 25, plans, stment Compa s repayments 361 , or tre and 42 percent nds, 29,664 are reve n (+ y Institute ); and of 401(k 38,467 aling Re an search ) d plan reli 51, a able Perspective 989 ssets — the re . The EB 61,757 14, no. 3, aso RI/ICI n EBRI informatio proj and ect EBRI is n is >5 to 10 23,717 22,430 40,077 Figure A1 54,214 2 60,863 76,532 99,288 120,451 $106,280 sectional snapshots can lead t 40s Allo false conclusions. For exam 8.5% 21.3%Cons pl ise, newly formed plans would te ten 29. t Sa 4%mple 45% 14.7% 95.2%nd to pull down the aver 18.2% age As expecte C 60 opyright Inf d, thormation: e consistent T partici his report is pants c wo hpyright o were efollo d by wed ov the Emp er the four-year loyee Benefit Resear period tended to ch Institut be a e (EBRI) bit older a and by ntd to he Russell 2000³ Figure A1, Consistent Sample Was Olde 2005 r Than Participants in the EBRI/ICI 401(k) Database at Year-End 2014 .......... 16 27% 223 $102,521 190 166 2,399 the gold standard for >2 t priva o 5 te analysts a 9,330 nd 13,570 decision make 21,393 rs, gove 32, rnme 334nt policy 42,432 makers, the media, and current account investment allocation jobs, >10 t while o 20 5 percen 74, t had more s. See Holden and Schr 029 $78,586 54, th733 an 30 yeass 20 ars of 81,941 tenur 16 for DC plan e 99, (Figur 432 29% e 2 participants’ an ). 104,296 nual activities between 2008 123,978 154,910 176, and 959 unique Issue Brie because of f, no its inc . 324 (Decem lusion of ber data ). Availa provided by ble at htt a p wi s://ww de vari w.ici.org/pdf ety of plan recor /per14 dkee -03.pdf pers, perm and itting the analysis of the Consistent Sample Was Older Than Participants AT A GLAN CE $76,293 >2 to 5 18.6% 39.3% 40.3% 22.8% 184.5% 29.9% 16 account balance, but would tell us nothing about consistently participating workers. Similarly, the aggregate average account Investment Company Institute (ICI). It may be used without permission but citation of the source is required. Report have slightly longer tenures by year-end 2014, compared with the broader base of 401(k) participants in the EBRI/ICI Investment Co Account balan >20 t $73,299 mpany I ces are net o o 30 nstitut 148, f unpaid lo e. Quart 880 2006 >5 to 10 erly S an bal 105,024 u appl nces. 20, ementa 114 Thus, 146,598 ry u24,782 n Data. paid169, loan bala Washin 92833,563 gton, DC: nces are not included in any o 173, $72,383 194 Inves 46,506t 199, ment Com 527 57,116p243, an f the eight asse y Institute. 267 271, 764 t the public. 251 229 361 2,782 ? Total investment return on account balances (+/-), which depends on the performance of financial markets and 2015. Analysis of Department of Labor Form 5500 data finds that the percentage of 401(k) plan sponsors making employer activity of www.ebr part i.org icipants /pdf/b in > riefs 5 to 10 401p(d k) pla in the EBRI/ICI 40 f/EBRI_IB n 17.3% s of va _12a- rying si 200 30.3% 8.p zes—fr 1(k) Databas df om 34. very lar 7% e ge at Year 21.9% corporations t -End 2014 150.9% o small businesses—with a v 25.9% ariety 19.5% $85,912 balance would tend to be pulled down if a large number of 19% participants retire and roll over their account balances. 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Partici is report is av pantailabl s in th e on e consis the Internet tent sampl at $63,929 ewww.ebri.org , by definition, h and a a d a t minim www.icum i.org tenur 24%e of four years in 2014 (the 2007 27324% 262 190 2,983 18% Although categories described. annual updates of the EBRI/ICI 401(k) database provide valuable perspectives of 401(k) plan account $81,031 on the allocation of assets in an individual’s account. >10 to 20 7.5% 20.6% 28.9% 14.9% 91.9% 17.7% contributions edged back a bit during the fi 24% nancial market crisis and recent recession; still, about 8 in 10 401(k) plan sponso $76,293 rs of This inv Issue Brief estment options. provides an an Percentage nual upd of a participa te of the longitudinal analysis of nts by age, year-end 401(k 2007 an ) plan parti d year-end cipants draw 2014 n from the EBRI/ICI 60s $60,329 All 128,475 contribute to 96,202 , to encourag 129,354 e, and to enhanc 148,667 e the developmen 151,459 169,t of sound empl 183 195,852oyee ben 209, efit 479 $58,991 16.1% Investment Company I 40n sstitute. 2016. Al “ l The U.S. Retirem 60,376 e65,483 nt Market, Firs 79,417 t Quarter 102,781 2016” (Ju$72,383 n 117, e). Ava 863 ilable at 2014 .......................................................................................................................... 15% ............................ 17 length of time 15. for t 1% he longitudina 2008 l analysis), 286 with only 8 percent having 233 -between four and fiv 827 2,208 e years of tenure, balanc EBRI explo es, asset allocation, res the breadth of emplo and loan activity across wi yee ben de cro efits and related issues. ss sections of participants, cross-section al analyses are not >20 to 30 5.0% 16.3% 26.7% 11.3% 72.2% 14.6% 3 Who we are made contributions to their plans in 2013 (see BrightScope and Investment Company Institute 2015). 401(k) databas >5 t e – the largest, participan o 10 24,833 programs and so t-level database of i 24,312 und public policy A 41, ge of 472 Par ts kind, with ab ticipant 54, through objective 942 20% out 24.9 million 401(k) participants at 61,850research and 75,784 education. EBR 94,001 I is the only year-end 110,268 17Account balances are net of unpaid loan balances. >2 to 5 23,140 27,438 38,210 $63,929 53,599 65,824 $65,454 20 This system of www.ici.org/r classification d esearch/stats/ oes not consid retirement/ret er the number _16 $60,329 _q1 of distinct investment options presented to a given participant, 31 Theperc chan ent geha in EBRI ving any i 50s 11 bet studie .n 8% divi wee dual sn A the worl lfive a l partic 2009 nd ipant d 10 6.of health and retirement ben 2% ye ’s 401 ars 258 , 37 (k) plan 17.0% percen act havin count 208 24.8% balanc g betw efit e een 12.1% s is infl 48 — issue 910u an enc d s e73.9% 20 d by the ma such a 2,746 years s, an 40gnit 1(k)s, d 14.8% 24u perc des of IRAs, retire ent these havin tment h gree $58,991 22% well suited to examining the $60,220 impact of participation in 401(k) plans over time. Cross sections change in composition Sources an>10 t d Types of D o 20 75, ata 347 privat57, e, nonprof 828 it, nonpar 83,592tisan, Washington, DC-b 99,852 104,ased organi 251 120, zat272 ion comm143, itted exclusivel 065 157, y to 348 $58,351 19% 13% 12% 18% 2014. 10.9% >5 to 10 33, 20182 s 30s 40 38,906 s 50s 6050,693 s 3% 68,300 83,254 10.7% 10% Figure A3, Distribution 13% of 401(k) Account Balances by Size of Account Balance for 2007 ?2014 Consistent Participants 9.5% income ade >q 2 t uacy, o 5 consu 10.7% mer-drive 30.7% n benefits, 33.Socia 3% l Security, 18.7% tax treatment of both retireme 128.8% 23.0% nt and health but rather, the types of options presented. Preliminary research analyzing 1.4 million participants drawn from the 2000 factors relative to the starting acco 8.6 2010 % public unt ba poli lance. c 267 y rFor esearch exam and ple, 245 edu a cat contri ion on bution 38 econ 0 of om a giv ic securi 3,148 en dollar ty and em amoplo unt produc yee benefies a t issularger es. 4 more than 20 >20 t years (Figure o 30 155, 2). 186 In contrast, in t 113,521 he entir 153,067 e EBRI/ICI 173, 4 766 01(k) da 175, tabase 642 in 20 195, 14, 596 36 perc 224, ent of 711 particip 240, ants 475 from year This report is bein to year because t g publisheh d simulta e selection neou of data sly as an provi EB der RIs an Issue Br d sample ief, n of plans usin o. 426, and IC g a give I Researc n provider vary, a h Perspective, Vol. 22, nd because >10 to 20 70,392 75,639 91,192 117,565 135,113 Available online at http://www.ebri.org/pdf/briefspdf/EBRI_IB_423.Apr16.401k-Update.pdf and $45,519 Morningstar Lifecycle Allocat 3% 7.4% ion Index. Chi 6.8% cago: Morningstar. Several EBRI and Eand I BRI/I CI mem CI Cons 401(k) Data is >ten 5 to 10 b t Sa ers provi mple in ba 201 15.3% d se 0ed r .................................................................................................. EBRI ecords on /ICI 401( 27.0% k) Data acti basve p e in31. arti Co 7% nscipa istent Sa nts in mp 19.8% le in 40 201 1(k 4 ) E BRI pla 131. /ICI 4 ns for 0% 01(k) Data whic bas h t 23.3% e in hey kept re ............... 17 cords at benefits, cost management, worker and employer attitudes, policy reform proposals, and pension assets >30 232,129 EBRI’s member 170, 2 756 ship includes a 220,948 cross-section of 247,209 248, pension funds; businesses; trade associations 102 270,309 306,459 319,106 ; EBRI/ICI 401(k 0 ) database suggests that the 2011 sheer number 285 of in 252 vestment options presented does not influence participants. -40 3,141 5. 8% 5% had growth five rate or fe wwer y hen a ed ars ded to of tea smaller nure, 24 E B acco perc RI/ICI 4 ent ha unt tha 01(k) Data d n bas bet ite wo w in e 200 en uld 7 five a if adde ndd to 10 years a larg, 2 er5 one. per c EOn the ent h BRI/ICI 4 a01( d other bet k) Data w hand, een base in 10 201 investm an 4 d 20ent years, No. 5, Septem 2007–2014 Cons ber 2016. is tent Sample in 2007–2014 Consistent Sample in 401 Because the annual cross sections cover participants with a wide (k) participants join or leave pl >20 t ans. o 30 In additio 106,324 n, the a 111, nalysis covers 660 range of participation experience 129,account 835 164,492 balances hel 11 183, % d in 401 in 119 401(k (k) plans, meaningful ) plans at 5.2% 2010 4.6% 2014 https://www.ici.org/pdf/per22 14 -03.pdf 15% Dec-06 Dec-07 Dec-08 4.0% Dec-09 Dec-13. 09% Dec-11 Dec-12 Dec-13 Dec-14 All and Allfunding. >10 t There is wi 81, o 20 031 labor un 7.7% de 60,spread ions; h 220 19.3% ealth recog 85, car 912 e prov nition 26. iders and insur that if employee be 7% 102,521 15.0% ers; 106, government org 280n87.3% efits 123, data exist, EBRI kno a967 nizations; 17.0% 151, and service firms. 961 ws 170, it. 290 2007 20143.4% year-end 2014. These plan recordkeepers include mutual fund companies, banks, insurance companies, and 3.2% 3.0% $10M or Less 2012 >$10 305 M to $100M 284 More than $ 364 100M 3,526 2.6% All On average, participants have 10.4 distinct options but, on average, choose only 2.5 (see Holden and Va 2.6% nDerhei 2001). In returns of a given percentage pro 50s duc Ae lar ll ger do 101,731 llar increases 108,073 (or decreases) 126,484 when comp 157,845 ound 176, ed on 922 a larger asset base. and 15 percent had more than 20 years. analysis of the participants’ cu potential for 401(k) partic rrent employers. Retireme ipants to accumulate retirement assets nt savings held in plans at previous em must exa ployers or roll mine the 401(k ed over into ) plan accounts of individual Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. 1.9% 2.2% 1.7% National Source: Tabul Bat uire ons f au of rom the EBR Economi > I/IC 20 t I P o 30 ca Researc rticipant-D4. irect h. 2 5% ed Ret 010. irem U.S. B ent 15.3% Plan Dat usiness Cycle E a Col 23. lect7% ion Project xpansions a . 11.2% nd 65.7% Contractions. Cambridge, 13.5% MA: Figure A4, Co Source: T nsistent 4 abulations from 01 24% (k) Pa EBRI/IC rticip I Participant-D ants Accumulate irected Retirement Plan Signif Data icant Bala Collection Project. nces ............................................................... 19 consulting firms. Although Note: The EBRI/IC I 401(k) the EBR database I/ICI contains 401(k 23.4 million ) project 401(k) plan participants has collecte at year-end d data 2010 and 24.9 million from 1996 th at yroug ear-endh 20 2014. T 14 he , th consistent e u niverse of data 5 2013 >2 to 5 327 37,572 Plan As 41,579 328 s3ets 54,358 659 72,452 4,184 85,980 addition, the preliminary analy Note: The EBRI/ICI 401(k) sis found th database contains at 21.8 401(k) particip million 24% 401(k) plan participants ants are not n at year-end 2007 and 24.9 million aive—that is, when given at year-end 2014. Participant n options, they do not tenure is In other Note: The anal wor ysisd is, growth s based on a sam rates are a ple of 3.5 m fu illionnctio 401(k)n pl of the relati an participants wve ith account size of bal the ances at dollar the end of adjustm each y eear nt to t from 2007 t he size hrough 2014. of the Age and t individual enure The value of this percentage is lower than it would have been if it merely reflected employee turnover and retirement. Any participants who maintained accounts over retirement acco sample unts (I consists RAs) a of > 8.8 30 million 401(k) re not incl 4. plan 6% ude participants w all o d in f the years b th 13.2% ith e ana account ly balances seing studied ( is. 21. at 9% the end of each y “co 8.6% ear from 2010 through nsistent participants”). The main body of the 56.9% 2014. Participant 11.9% age is age as of National Bureau of Economic Researc EBRI’s work advances knowledge and unders h. Available at www.nber.org/cycles/cyclesmai tanding of emplo n.html yee benefits and their EBRI delive tenure as of rs a stead the year-end indicated.T y stream of invaluable research and anal he consistent sample consists of 3.5 million 401(k) plan participants with account balanc ysis. es at the end of Annual Percent Change in Total Return Index <$10,000 the year-end indicated. $10,000 to >$20, C000 to omponents >5 to 10 >$30 do not ,000 to add to 100 percent >$440, 0,000 to 550 >$ because 50,000 to 46,755 of rounding. >$60,000 to 59,402 >$70,000 to >$80, 78, 000 to 215 >$90,000 93,670 to >$100,000 to >$200,000 providers groups are based on par varies from y ticipant age and t ear to year. I enure at yn ear a -end 2014. ddition, th Account e plan balances ar s using a e partiparti cipant account cular provider balances helcan cha d in 401( 26 k)n pl %ge ov ans at ter time. he participant Recor s' current ds By year-end 2014, the consistent sample 2014 of 4 N0 /A 1(k) particip Nants a /A lso was a b N/A it older, 4,559 on average, compared with the each year from 2007 through 2014. divide their ass Source: IC ets among all n. Indeed, I tabulations of U.S. Department of Labor Form 5500 R less than 1 percent esearch File.of participants followed a 1/n asset allocation strategy. Plan account. 60s All 4.7% 12.4% 17.6% 6.6% 47.4% 10.2% time a 401(k) plan sponsor changes service providers, all participants in the plan would be excluded from the consistent Table of Contents Issue Brief Figure A5, focuses on consistent participants for the 2010– 401(k) Account $20,000   B $3 alances Amon 0,000 importance to $40,000 g Consistent $50th ,00e nation’s econo 0 $6 4 0,0 2014 pe 01(k 00 ) $70, Partici my riod, while the appen 000 among policy pa$80 nts from ,000 m $9 20 akers, 0,007 00d Thro ix addresses the 2007–201 the news $100, ugh 000 2 media, and 0 $21 00, 4 ......................... 20 000 the public. It 4 period. employers and are net of plan lEBRI oans. Retpublications irement sav in ings hel clude d in pl in-de ans atp pr th evcove ious emrage ployers or of key issues a rolled over into IRAs ar nd e not tren ind cls uded. ; summ aries of research >10 to 20 81,823 88,131 105,157 133,284 153,247 were encrypted to conceal the i2015 dentity of employers a N/A nd em N/A ployees, but N/were A coded s 4,650 o that both could be tracked over 24.9 million participants in the entire EBRI/ICI 401(k) database. For example, only 3 percent of the participants in the To e Sponsor Council of America 2015 indicates th xplore the full impact o >2 tf o 5 ongoin does this b g 8.partic 7% at in 2014, the ipation y co 23.4% nducting in 401(and p av k) plans, an 25. erage n 3% ublishing policy re umb d t 12.6% er of investment fund o understand sear 89.1% ch, analysis, how 40 options available for 1(k and 17.3% ) plspecial reports on an participants S&P 500² Russell 2000³ Barclays Capital U.S. Aggregate Bond Index 4 sample. Plan Sponsor Council What we do of America. 2015. 58th Annual Survey of Profit 38% Sharing and 401(k) Plans: Reflecting 2014 Plan findings and policy developments; Sizetimel of 401( y k factsheet ) Plan Account s on Bahot topics; lance regular updates on legislative and Introduction .................................................................................................................. 15 >20 to 30 152,800 159,662 184,077 227,643 ........................................ 4 253,132   Sources: Investment Company Institute and Department of Labor. employee benefit issues; holding educational briefings for EBRI members, congressional and multiple years. >5 to 10 13.6% 22.6% 25.3% 13.9% 98.8% 18.7% 38.8 consistent gro Altogether, froup m year-end 2007 throu were in their 20s and gh 20 year-end 2014, percent were i th n th e avera eir 30s at ge 401(k year-en ) plan d 2014 (Figure account balanc 1). In e among t the entir he e EB 2007– RI/ICI Two major insights emerge from looking at the 8.8 million consistent participants in the EBRI/ICI 401(k) have fared ov participant contributions was 19 among the Figure A6, Changes er an ext in e 401(k) Account Ba nded period, it is i lances Among nearly 600 pla mportant to an n Consistent 401(k s surv alyze a eyed. Del group of pa oitte Consultin ) Part rticipan icipants who ts from 2007 g LLP, Inter have nbeen at Through ional Foundation of part of t 2014 he ....... 20 regulatory developments; comprehensive reference resources on benefit programs and workforce Experience. Chicago: Plan Sponsor Council of America. 1 >30 193,163 202,138 228,917 279,035 303,084 Total contributions include both employer and employee contributions. 2007 2008 2009 2010 2011 2012 2013 2014 federal agency staff, and th Fige news ure A6 media; and sponsoring public opinion surveys on employee 6 2010 >10 to 20 2011 7.3% 15.5% 2012 20.4% 9.9% 64.0% 2013 13.2% 2014 Consistent Participants in the EBRI/ICI 401(k) Database .......................................................................................... 4  2014 group of consistent pa 37%rticipants increased by 110 percent, rising from $81,031 at year-end 2007 to $170,290 at d 401 For the report atabase ove (k) dat Sour ace: ba se at year T ra t on the year-en bul he f ation o sur-y from EB -end ear p 20 Rd I/ 2010 EBRI/ICI IC14, e I Par ri 13 od tici f pan p rerc om y t-Dire ent of participants wer ct 401(k) database, see Va e ed ar-end Retirement 2010 Plan D t at o a C ye oll e ar-e ect in in on t D nd h Pr erhei et al. 2011. eir oje 201 c20s a t. 4. nd 24 percent were in their 30s. Thirty- databas Employee Benefit Plans, and t e for an ext issue ends ed ; and peh riod. e Internationa major survey This studl Society of Certif y thus foc s of public uses on a attitudes. ied Employee consistent gro Benefit Specialists 2015 report that the aver up of participants (a longitudinal samage ple) 60s 2 All 116,442 30% 121,876 136,947 161,083 171, 32. 641 4 Total benefits disbursed include both benefits paid directly from trust funds and benefit issues. EBRI’s Education and Research Fund (EBRI-ERF) performs the charitable, 1 Changes in 401(k) Plan Account Balances Among Consistent >20 to 30 3.6% 11.6% 16.3% 6.6% 43.2% 26% 9.4% Data provide The yd ear for -end each 2014EB parti RI/ICc I ipant 401(k) dat incl abu ase r deepr date o esents f2 4 birth, .9 milli f onr 401( om whic k) plan h a partin cipa age nts. group is assigned; date of hire, from which EBRI meetings present and explore issues with thought leaders from all sectors. three year-en perc d 2 20 ent 14of the (Figures A participants in t 4 and A premium 5). p Th h aye mis tr e co nts nsistent sampl m anslates into ade by plans to in e a s compou u were in t rance carrie nd an h rseir . A 50s mnual av ounts and 14 excerage lude bpercen ene growth fits t w rate of 11. ere in their 60 2 percent s, comp over ared Russell 2000 index. Tacoma, WA: F >2 t ran o 5 k Russe 46, ll C 096 ompany. Figure 10 50,101 61,800 77,449 87,170 drawn number of f from The u th cons nds offered by t e ann istent sampl ual cross sections. The e is 8.8 he nearly 4 millioneduca 401(27. k) 00 tiona pl 2an 401(k) plan sp par main l, and ticipan scientif body o ts with on aic func fccou t sors surveye he nt Issue bal tions of the Instit ance Brie s atd was 22 in 20 the f focuses on end ofute. EBRI each ye15. BrightScop co ar fr-ERF om 2010 nsistent part is a tax-ex throug e and In h ici 2014. empt organizatio pants for vestm the ent 201 n 0- Sample of Consistent 401(k Median ) Participa 26.5 nts, 2010–2014 26. ........................................................................... 9 ................... 4  401(k) Participants from 2007 Through 2014 Median >30 2.7% 9.0% 15.2% 3.5% 33.5% 7.5% 7 1. The average 401(k) plan account balance for consistent Figure 2 participants rose each year from 2010 through year-end 2014. a tenure range is assigned; outstandin paid directly by g lo insuan ba rance clance; arriers. funds in the participant’s investment portfolios; and asset values Note: Account balances are participant account balances held in 401(k) plans at the participants' current employers and are net of plan loan   s. Tenure refers to years at the EBRI regula current employer and is gener rly provides congressional a testimony lly derived from date of hire , and briefs policy reported for the participant. Tenure makers, member organizations, >5 to 10 43,920 Figure 49,913 A3 61,177 76,631 87,294 the seven-year period. One-Fifth of The median supported b Eligible account ba 401(k) Plan y co lance ntributions among th Participants Hav and gis rants. consistent grou e Loans p alsoOutstanding grew, more than doubling from with 26 percent and 11 percent, respectively, in the entire database. 201 Company Institute 2015 repor 4 period, while the appendi t an aver x addrage of esses the 27 investment 2007-2014 opti period. ons in 2013, and an average of 21 investment options when a All P Ae ll3 rcent c7. ha 2% nge in a18.0% verage 40125. (k) 3% plan ac12.3% count balan 78.0% ce among 15.5% Retirement savings held in pl Consistent ans at previous empl Sample oyers or rHad olled ovLonger Tenure Than Participants er into IRAs are not included. Components may not add to 100 percent 16 This category includes interest, dividends, rent, net gains or losses on sale of assets, Overall, the average account balance increased at a compound annual average growth rate of 1. percent from 2010 to Age and Tenure of Consistent 401(k) Participants .............................................................................. .................. 6  attributed to those fu and nds. A the medi n accou a on employe nt balance r for e benefits. ach participant is the sum of the participant’s assets in all funds. >10 to 20 80,046 85,866 99,217 119,470 131,238 S&P will not reflec 500. New York: Sta t the years of participati Distribution ndard of 401(k) & Poor oPercentage of n in ’s. the 401(k) plan if the 401(k) plan was a Plan Acco eligible unt Balances by 401(k) plan Size participants of A dded b ccou y the employer nt Balance at a later date or if because of rounding. 1 $32,804 in 20So 07 to urce: $ Ta 87,4 bulati1 o8 ns in from 20 th 14 e EB (a R co I/ICImpoun P articipan dt an -Dire nu cteal avera d Retireme g ne t P gro lan D w ath rat ta Collee o ctiof n 1 P5 ro.j0 p ect.ercent) (Figure A3). unrealized appreciation or depreciation of assets, and o30% ther income and expenses. target-date fund suite is counted as a single i EBRI/ICI 401(k) Database c 1onsistent 401( nk vestment option. ) participants by age and tenure 16. , 20 0 16. 07 3–2014 in the EBRI/ICI 401(k) Database at Year-End 2014 EBRI/ICI 401(k) Database 15.1 2014, to $ 130,493 EBRI at year-end issues pre >20 t ss 2014. rele o 30ases 151,760 on newsworthy 157,192developm 175,349 ents, and i 203,877 s among 217, the mo 280 st widely quoted for 2007 ?2014 Consistent with loans Participants outstanding, and EBRI/ICI 401(k) year-end 2014 Database Plan balances are constructed as the sum of all participant balances in the plan. 13.7 Consistent Participants Have Accumulat The bulkEBRI Issue Briefs of thise cd ate Sizable gory is net401(k inv is a s estm ) er Plan Account eial nt gains with in-dep or losses th ev Balances . aluation of ................................................. employee benefit issues and trends, ...... 6  there are restrictions on partic 2 ipating in the 401(k) plan immediately upon hire. Note: The analysis is based on a sample of 8.8 million 401 (k) plan participants with account balances at the end of each year Percentage of participants by years of tenure, year-end 2010 and year-end 24% 2014 Compound Annual 2 25% Consistent Sample Consisten Consistet Particip nt Sa sou mple rces 26% oants in the EBRI/ICI 401(k) Database n employee benefits by all media. >30 228,098 234,173 255,340 294,255 304,570 4 as well as cr Percentage itical an of participants with account alyses of employee benefit policies and proposals. EBRI Notes is serial 18 U.S. Departme frnt of om 201 Labor, 0 through 2 Employee 014. A ge and tBe enu n re e g fits S roupse acurity re based o Administration n participant age an . 20 d te15. nure a Private t year-en Pension d 2014. A cc Pl ounan t baBulleti lances arn, A e bstract of Estimates for 401(k) plan assets through 2013 are based on the Department of Labor In additio Our n to contributions, withdrawals, and loan activity, the changes in 401(k) participant account balances also Consistent Participants Have Accumulated Sizable 401(k) Plan Account Balances 7.8 A Lifestyle funds ge Tenure maintain a pre 2007– determined risk level and ge 2008– 2009– 2010– nerally use words such as “conservative,” “mo 2011– 2012– 2013– 2007- Aver derate,” or age Grow th Rate, 2. The median 7.0 (mid-point) 401(k) plan account CHECK OUT EBRI’S WEBSITE! balance for consistent participants increased at a compound annual average Years of 6. T 5enure Changes in Consistent 401(k) Participants’ Account 5.9 Balances .................................................................................... 7 6.0   5.5 4 8 p articEBRI ipan tA alc ldirect count5. ba 2 s lamembe nces he Ald in ll r 40 s a 1(k nd ) pla 73, other constit ns299 at the partic78,586 ipan uen ts' ccie urren st e to 92,745 mplo the informatio yers and ar 116,203 e net on f pthey need an lan loan 130, s. R 493 etireme d ntunde rtakes new Form 55providing curr 00 Research File.ent information on a variety of employee benefit topics. EBRIef is a weekl 4.y 9 Investment Options balances in specified ranges, year-end 2014 “401(k) Plan Asset Allocation, Account Balances, and Loan Activity in 2014” reported year-en 4.2 d 2014 account balance, The cross-sectional EBRI/ICI 2013 Form 5500 Annual Re 401(k) databa ports (Version se also shows that younger p 1.0). Washington, DC: U.S. articipants Departm and those with shorter tenures tend ent of Labor, Employee Benefits to Group (years) 2008 2009 2010 2011 2012 2013 2014 2014 2007–2014 reflect changes in asset values during the seven-year period. Altho 26% ugh asset allocation varied with age, and many 2.1 “aggressive” in their name to indicate th savings held in plans at previous em e fu plon yer d’s risk level. s or rolled over Lifestyle fund into IRA s are not in s g clu enerally are inc ded. luded in the non-target-date Changes in Consist Trends in growth rate of 19.7 percent over the period, to $56,653 at year-end 2014. the consistent groe up’s ac N nt 401(k) Participants’ Account Balances ote: Da 0 to count ta ex 2 clud balances h e p >2 lan tos 5 covering i>gh 5 o toli n 10 ght th ly one pae ac > r10 to ticipa cum 2 n0 t. ulation >20 to 3ef 0 fect >3 of on 0 going 401(k) participation. At resea Sourr cch e: Ta on a bulatin onongoi sroundup of EB from th ng e EB ba RI/sis. ICI P RI resear articipantch and -Directe insights, d Retirementas well P lan Dataas upd Collecates on tion P roj survey ect. s, studies, litigation, publications 16% Background Factors 20s All 46. Influenc 2% ing 401(k 116.4% ) Plan Assets 51.4% 18. ............................................................................. 7% 34.0% 23.7% 22.0% 1049.4% ................... 10 41.7%   asset allocation, and loan activity results for the EBRI/ICI 401(k) database, which consists of a l 17 arge cross section of have lower 401 Security Ad (k) balances th ministration (September an those who a ). Avail re older able at or have longer tenure www.dol.gov/ebsa s. See Va /pdf/201 nDerh 3pens ei et al. 2016. ionplanbulletin.pdf 39.9% 13% participants held a range of investments, stock market 12% performance had an impact on these balances because, in large Note: The analysis islegislation and r based on a sample o egulation aff f 8.8 million 401 ecti (kng emplo ) plan particy ipant ee benefit plans, while s with account balances at EBRI’s Blog the end supplements balanced fu In the EBRInd /ICI 40 catego 1(ry. k) data 10%bas N/Ae =, inv not av es aila tment o ble. ptions are grouped into eight broad 1% categories. Equity funds consist of year-end 2014 , 19. EBRI 5 perce maintains an nt of the co d nsistent analyzegroup s the mo hadst more t comphan rehen $2si 00,0 ve 0 databa 0 in their se 40 of 401(k) 1(k) plan -type accounts at t programs he in the ir In any given year, the change in a participant’s account balance is a combination of three factors: Investment r >5 te o 10 turns, wh 64.3% ich vary with 130.3% 401(k 53.9% ) plan account 20.7% asset allocati 35.1% 23.1% on, also in 22.8% fluence th 1335. e c7% hanges in partici 46.3% pants’ EBRI’s website is easy to use and packe 5% 5% d with useful information! Look for 23% 5% 24.9 million 401(k) plan of eac h par yeatr f icipants. rom 2010 through 2014. A ge and tenure groups are based on participant age and tenure at year- 8% Analysis of a consistent group ofour regular pub 401(k) partilications, offer cipants highilnig commentar ghts the imyp act on questions receiv of ongoing part ed from news reporters, icipation in 401(k) About the EBRI/ICI part, 40-1. 1(6 k) plan pa worl 401(k rticipant d. Its co ) Database s’ bala mputer nces t ............................................................................................ simul ende ation d toanaly be we sig es hte on So d toward cial Secu equiti rity es. Altogether, at reform and retireme year-end 20 nt ........................ 13 income a 14, whdether equacy   pooled investments primarily invested in 22% stocks, including equity mutual funds, bank collective trusts, life -2. insuran 0 ce current 9 30s employers, whil All -13.e a 6%nother 70.3% 16.1 per 33.3% cent had 9.3% between $1 25.6% 00,00030.0% and $200,0 17.6% 00 (Fig311.8% ure 3). In contrast, 22.4% in the 2007–201 end 201 4 4 C . Aonsi ccos utent nt ba lanc E e B sR aIr/IC e pa I 4 rt 01( icip k) an Data t acc bas oun e in t balanc 20 es 07–2014 held in 4 Co 01(k nsis ) plan tent s at thE e pa BRI rt/ICI 4 icipan 0t1 s('k) cu Data rrentbase in accounts. Although asset allocation varied with age, and many partici -4. p2ants held a range of investments, stock market Utkus, Steph For statistics i en P., a ndicating the higher propensity of withdraw nd Jean A. Young. 2016. 10% How Amerals among participants in their 6 ica Saves 2016: A Report on Va 0s, see Holden and VanDer nguard 2015 Defin 10% ed hei 19 policymakers, and others. The EBRI Databook on Employee Benefits is a statistical reference these special features: 13% $87,418 plans. GICs are insur At year-end 2014, the ance company are unique. average accou products that guarantee nt balance amo a spe ng consis cific rate of ret tent participants was 1 urn on the inve the averag sted capital over the life of the e account looking at th >5 te o 10 consistent gro 11. Sam 1% ple in 2007 u103. p or6% the ent 43.8% ire EBRI 2007/ICI 14.7% 401(k30. ) database, 9% Sample33.7% in equities—e 2014 21.5% quity fun 692.9% 20d 14 s, the equity34. portio 4% n of employers and are net of plan loans. Retirement savings held in plans at previous employers or rolled over into separate acco ? New contr unts, an ibutid oth ons by th er pooled e partinves icipant tments. Simila (+), the em EBRI/ICI 4 ployer rly, 01(kbon ) Data (d + bas ), or fun e d both; s are any pooled account 20% primarily invested in broade Contributio r EBRI ns, /Iwhich CI 401 positive (k) data ly base, affect 10.7 401 p (k e) rcent plan had account accounts wit balances h m , incl ore than ude both $2 em 00,pl 000, oyer an and 9. d em 5 perce ployee contri nt had bbut etwee ions n , 16% Appendix: Consistent 401(k) Participa work on emplo nts 2007–2014 yee benef ............................................................................ it programs and work force-related issues. ................. 16  performance tends to have an impact on these balances because, in large part, 401(k) plan participants’ balances This paper presents a longitudinal analysis—the analysis of 401(k) participants who maintained accounts each year 2002. In addition, nonhardshi Contribution Plan Data. V p withdrawals, alley Forge, PA: which are gene The Vanguard rally limited to Group, Vangu employees ard Center who are aged 59 for Retirement ½ or older, constitute Research. 25 >10 to 20 I- R 20. As9% are not inc 58.9% luded. 27.9% 6.6% 22.5% 27.5% 2 15.4% 208.6% $78,926 17.5% balance among contract. all participants in the EBRI/ICI 401(k) database. The consistent group’s median balance was more than three target-date So f urc unds, the e: Tabulation e s q from uit EB y portion RI/ICI Parti of cipa n nt-Di on-target-date rected Retirement P bala lan Data nce Cold lec f tio un nProj ds, ect. and company stock—represented about two- bonds. Balanced funds are pooled accounts invested in 2007–2014 Cons both stocks and b istent Sample onds. They are classified into two $10 and most 0,0 • 00 and EBRI’s entire library of re 401(k) participants $200,000. are in plans search publications starts at where the employer contributes. In the ma 20 in W 13, nearly eb page. Click on 9 in 10 partic26. ipants EBRI 9% were in from 2 tended0 to 10 be thrwei ough ghte 20 d14—t toward e hat was quit not i ies. A nlc togeth luded er, at in the year-e previonus r d 20 epor 14, wh t. The ether lon looki gitudn inal g at analysis the cons tracks the acc istent group o or the unt a majority of all withdrawals (see Utkus and 40s Available A at ll https://institutio -25.6% 51.9% nal.vangu 23.4% Young 2016). ard.com/iam/pdf/HAS2016.pdf 4.8% 20.1% 26.8% 14.2% 154.2% 14.2% Age and Tenure Compositio Note: The EBRI/ICI 401(k) data n of base cthe 2007–2014 Sa ontains 21.8 million 401(k) mple of Co plan participantsnsistent at year-end 401 2007 a (k) Partic nd 24.9 millio ipants n at year..................................... -end 2014. The consistent 16  23% 26 EBRI makes information freely available to all. 25% ? Withdrawals (-), borrowing (-), and loan repayments (+); and times the median balance across all participants at year-end 2014. thirds of 401(k) plan participants’ assets (Figure A6, lower panel). The asset allocation of participants in the consistent subcategor samp ies: le target consists -date of 3.5 milfu lion nds an 401(k)Contact EBRI pld an non-t participan arget-date ba ts w ithPublications, (2 account bala lanc nces ed fu at 02) 659-0670; the en nds. d of ea A target ch year frfax publication om 2 -dat 00e 7 thr fund typi ough 20 orders to 14.cally Participa rebala nt (20 age 2) 775-6312. isnces its age as of 401(k) plans where the employer made contributions (Figure 9). Although this figure fell slightly in the wake of the Among th Issue Briefs > e co 5 to 10 nsistent gro -28% 3.7% and up, individu EBRI Notes 88.1% al 40 37.9% for our in-depth and 1(k) partici 12.0% pants experienced a 27.5%nonpartisan pe 31.7% wide ra 20.6% nge of riodicals. $64,399 outcomes, often influenc 465.9% 28.1% ed by 20 entire EBRI/ICI 401(k) database, equities—equity funds, the equity portion of target-date funds, the equity portion of balances of 8.8 million 401(k) plan participants who had accounts in the year-end 2010 EBRI/ICI 401(k) database and EBRI assumes a public service responsibility to make its findings completely accessible at www.ebri.org Other stable- the year-e value fun nd indicated ds include synt . Components mayhetic GICs, not add to 100 which consist percent because of ro of a portfolio unding. of fixed-income securities “wrapped” with a 2007–2014 Sample of Consistent Participants Has Accumulated Sizable 401(k) Plan Account Balances ................... 16  Reflecting their higher average age Subscriptions to and tenure, t he co EBRI Issue Bri nsistent gro efs are included up also had m as part of edian an EBRI d aver membership, or as part of age account balanc a es 10 sample varied with participant age, a pattern that also is observed in the cross-sectional EBRI/ICI 401(k) database. portfolio to >10 to 20 become les -26.s7% focused o 53.3% 10 n growt 23.0% h and more 4.5% focuse 20. d o 0% n inco26.9% me as it ap 14.1% proaches 151.2% and passes the tar 14.1% get date 19.3% financial market crisis, reaching a low of 85 percent in 2010, it had generally rebounded during the time of the the re VanDerhei, At year-end 2 Orders/ lationshi Jack, and Sarah p014, 60 percen among the t Holden. ht of non-target-date balanced ree factors m 2001. “The Impact entioned abov of Employer-S e: fund contri assets were assumed to bution $54,268 elected s, withIdrawal nvestment O /loan activity, be invested in ptions on 401(k) Pla aequities (see nd investment n $56,653 each su non-targ bseq et-dat u — ee ba nt year so that all deci lance throu d fug nds, h ye sio ar-e and com ns that nd 2 014. relate to emp pany stock—r The a$51,458 ppeloyee ndix epresented about two pr ben esents efits, results for whether -thir a lo mds ade ngit of in Cong 40 ud1(k inal) ana pla ress n part lysis tracking or bo icipa ard nts room ’ as a ss ets or Younger 401(k) participants or those with smaller year-end 2010 balances experienced higher percent growth guarantee (typi ? Total in cvestment ret ally by an insu urance company rn on account or a bank) to pr balances (+/-), ovide benefit payments which depends on the per according formance o to the plan at book val f financial markets an ue. d $199 annual subscription to EBRI Notes 37% and EBRI Issue 13% Briefs. Change of Address: EBRI, >20 to 30 -29.2% 41.9% 18.3% 2.6% 16.7% 24.0% 11.6% 96.9% 10.2% Changes in 2007–2014 Consistent 401(k) Participants’ Account Balances ......................................................... $49,961 .... 18  that w Younger ere m partic uch hi ipants gher gen tha erall n the me y tended to dian an fad avera vor equg ity f e acc uno dunt b s and alanc targes et-date fun of the bro ds, ader while EBRI/ olde ICI r parti 401c (k) ipants were database more • Visit EBRI’s blog. of the fund, which is usually 11 included in the fund’s name. Non-target-date balanced funds include asset allocation or longitudinal study. With regard to individual participants’ contribution activity, defined contribution (DC) plan Investment Co returns. Participa Partici n families’ mpany I ts’ A pants who were sset Allocation n ho stitute, Quarterly Su mes, are youn s: Prelimi based ger or had fewer on the highe n ppl ary ementary D Findin gs.” yea st a ta). The allocati rqualit Wo s of te rking y, nure most depe paper experi on to equitie prepare ence ndad t d blfor th e hs in target-date funds e lar informatio eg Cente est perc n. r for EBRI’s Web ent i Pe nnsion an creases i varies w site d n ith the posts (Figure 7, lower panel). The asset allocati 1100 13th St. NW, Suite 878, Washington, on of participants in the consistent sample varied DC, 20005-4051, (202) 659-0670; fax number, with participant age, a group of 3.5 million 401(k) plan participants who had accounts in the year-end 2007 EBRI/ICI 401(k) database and in account balances compared with ol on the allocation of assets in an $41,610 individua der partici 22% l’s account. pants or those with larger year-end 2010 balances. Three 50s All -27.1% 41.3% 18.4% 3.4% 16.3% 22.8% 12.4% 102.2% 10.6% 11% 18 Subscriptions 12 24% (Figure 4). At year-end 2014, the average 401(k) plan account balance of the consistent group was $138,553, almost likely to invest in fixed-inco -33.8 me securities such as bond funds, mon $39,128 ey funds, or guaranteed investment contracts (GICs) hybrid f 21 References unds, ............................................................................................................................... in addition 11.8% to lifestyle funds. Company stock is equity in the 401(k) plan’s sponsor (........................... 19 the employer).   2007–2014 all Sample of C research finding onsistent Participants Ha s, publications, and news s Acc alerts u. m EBRI also exte ulated Sizable 401(k) nds its educ Plan Account ation and public service participants tend to continue contributin (202) 775-6312 g in any give ; e-mail: n year to th subscriptions@ebr eir plans. i.o rg Membership Information: Inquiries funds’ target dates. For target average accou Retirement R n 10. t ba 8% esearch lance bet (CPRR -date funds, ween ) Curre year-en nt P investors were assumed to be in a fund de 2010 a nsion Policy nd year- Issues end Conf 2014. erenc For example, t e, Miami Un whoseh target date was nearest to their iver e aver sity, Oxford, age account OHbalanc (June e 8– of 9). Some recordkeepers supplyi $32,804 >5 to 10 -5.4% ng data were u 78.7% 35.3% nable to provide comp 12.3% 25.7% lete asset allocati 29.7% 21.3% on detail on 407.9% certain pooled asset classes 26.1% each su pattern that bsequ also is ob ent year throu served in the gh year-cross- end 2014 (a sectional EBRI/ICI seven-year period). 401(k) dat abase. Younger participants ge 10.nerally 7% tended to primary factors affect account 23% balances: contributions, withdrawal and loan activity, and investment returns. The percent -37.0 9.5% 19 • EBRI’s reliable health and retirement surveys are just a click away through the topic boxes at $31,425 twice and ot the her sta aver role bage le-valu to improving Ameri account e fun balance ds. The decli regarding of c$7 an ne 6, s’ i293 EBRI nfinan stock marke amon membership an cial g kn pa owle t rticip values t dge ad/or con nts thro hin at o the ugh tributio ccurred in eits a ntins re to EBRI-ER w EB ard 2 R0 -Iwin 0 /I8C I (Fi ning 40 F g should be dir ure 1(p kubli 1 ) d 1a ) t cta se ebnde a rvice se ected d . to T to cam h pull e me EBRI paign dian Money funds >10 to 20 consist of those -26. $26,314 1% fun 49.7% ds designe 21.3% d to ma 4.9% intain a stable 18.9% share 25.0% price. Sta 14.2% ble-value 139.0% products, such as 13.3% GICs Balances $27,550 401 65th birthday. (k) particip The equity ants in their 7.po 4% 2 rtio 0s rose 3 n was estimated using the i 31.3 percent (a 44.n1 dust percent ry averag com e equity perce pound annual n tage for the a average grow ssigned target-date th rate) between the for one or mor The change ine of their clients. The final EB any individual 7.4% participant’s RI/ICI 401(k) data 401(k) plan account base includ balance es only plans f is influenced by the ma or which at least 90 percent of all p gnitudes of these three lan Endnotes favor equity ...................................................................................................................... funds and target-date 6.5% funds, while older participants were more likely to invest in ...................................... 23 fixed-income securities   ® change in average account balance of participants in their 20s was heavily influenced by the relative size of their contri $18,127 butions 5.7% $17,630 27 20 President Harry 5. 0% Conaway at the above address, (202) 659-0670; e-mail: $18,433 conaway@ebri.org the top of the page. ChoosetoSave and $17,794 the 5.2% companion site www.choosetosave.org With 401 $18,942 (k) plan drawa >20 to 30 lsac and count borrow -29. balanc 5% inge reduc among t 39.6% es 4h 0e co 115.9% (k) nsistent part plan $17,686 account 1.9%ici 4.5% bala pan 15. $16,649 ts nces 2% was $ in th 5 21.9% 6e EBRI ,653 at ye /ICI 11.7% 40 ar-e 1(k nd ) d 20 82. a14, mor 5% tabase,e whi than le 9.0% thr loan ee times 401 (k) plan . 2002. ac “Ca count n 4 balanc 01(k) e Accumulation s lower, altho s Ge ughnerat diversifie e Significant d portfo Incom lios an 4.0% d ongoi e for Future Retirees?” $18,433 ng contributionsInvestment Company helpe$18,127 d offset the and other stable value funds, are reported 4.as one cat 0% $17,630 egory. The other category is the residual for other investments, $17,686 3.6% $12,655 $16,649 3.3% factors relativ end fund calculated of 2010 ae nd using the to th the end e starti Mo ofn rningstar Lifecy 201 g acco 4 (F unt igur ba es 5 lance. cle Allo and 6). For catio exa Bec n Index. m aus ple, e youn a contri gerbution participants’ ac of a given dollar count 3.0% balanc amount produc es tended to be es a larger assets could be identified. 3.2% Tren such as ds in bond f the 200 unds, mon 7–2014 co ey f nsistent gro unds, or guup’s account aranteed inv ba estment contra lances 2.6% highlight the cts (GICs) a accumulation nd other stable-va effect of ongoing 401(k) lue funds. to their account balances and increased at a compound ave 24% rage growth rate of 44.1 percent per year be 18% tween year-end 2010 Sample of Consiste >30 -27.9% nt 401(k) Participan 33.8% 15.5% 2.5% ts, 2010–2014 13.2% 2.19.7% 2% 1.9% 9.3% 69.2% 7.8% 1.7% 21 repayment impact. I the median 2007 n th ha ac e case of th s a positive im count balanc 2008 e y e opact. of $ ungest 18, With 127 40 2009 dra 1(k for w ) partic al act partici ivity a ipants pants, 2010 m in the ongoin ong act ent g cont ive ire E DC pla 2011 ri 31% BRI/ICI butions mor n partici 401(pe k 2012 ants is relat t ) h database. an offset t i vely rare. h2013 e impact Typi of the cally, 2014 stock Institute Perspective 8, no. 3, and EBRI Issue Brief, no. 251 (November). Available at www.ici.org/pdf/per08-03.pdf such as real estate funds. The final category, unknown, consists of funds that could not be identified. smaller Editorial B (Figur oar e 5 d:) , t Har h reir 21% y Conaway, contributions publisher pro ; Stephen duce Blakely d signif , editor icant percent . Any views expr growth i essed in t n th his p eir ubli account cation and t balanc hose of es. In co the authorntrast, the s should not growth rate when added to a smaller account than it would if added to a larger one. On the other hand, investment partici 60s pation. AlAt year- l -25. end 1% 2014, 34.5% 26.9 perc 14.9% ent of this 1.9% consistent grou 11.7% p 15.8% had more th 7.0% an $200, 63. 00 1% 0 in their 401(k 7.2% ) plan and year-end • Need a number? 2014. Check out the EBRI Databook on Employee Benefits. 11 EBRI is supported by organizations from all industries and sectors that appreciate the value of Nearly 22 two-fifths, or 8.8 million, of the 401(k) participants with accounts at the end of 2010 in the EBRI/ICI 401(k) fewer than 5 <$10, percent of acti 000 $10,000 to ve DC >$20,000 to pla >$30, n 000 t paorticipants tak >$40,000 to >$50,e 000 t any o >$60, with 000 t drawal in o >$70,000 t a o >$80, given 000 t y o e>$90, ar, with 000 to >$100, fewer than 000 to >$200, 2 per 000 cent market declin For a description of the inves and be ascribed to the www.e e on bri. their officers, trustees, org/pdf bala /bnces (Fi rie tment options, fsm pdf emg /1 bures e10 rs, or other sponsors of the E 2ib. A4 an see page 13. pdf d A5). mployee Benefit Research Institute, the EBRI Education and Research This analysis updates the longitudinal sample covered in the prior update (2007–2013) in VanDerhei et al. 2015. Background Factors Influencing 401(k) Plan Assets >5 to 10 -2.1% 70.6% 32.5% 12.6% 22.5% 24.0% 17.3% 344.0% 23.7% returns of a average accou given percentage pro nt balance of $20,000 older $30,000 partic duc$40, e lar 000 ipa gn er do ts, or those $50,000 llar increases $60,000 with longer t ( $70, or 000decreases) enures—both $80,000 when comp $90,000 of w $100, hich ound 000 ten ed on $200, de000 d to a larger asset have larger base. accounts at their current employers, w5 hile another 19.3 percent had between $100,000 and $200,000 (Figure A2). In Sources: Bloomberg, Barclays Global Investments, Frank Russell Company, and Standard & Poor's. 13 401 Figures (k) plan unbiased, reliable information on emplo Fund, or their account staffs. Nothin balancg her es tended to in ein is to be constr crease ued as an with attem y bo ee b th pt to aid or age a enefits. nd te hinder Vis nure the it among t adoptio www.e n o b hfri.o e consistent anyr g pending /about/join/ legislatio group of for more. n, re parti gulation, cipants, or database are in the consistent sample. These consistent participants had accounts at the end o 18% f each year from 2010 taking hardshi 2007 p withdr 2008 awals. Data from t 2009 he EBRI 15% /ICI 2010 401(k) database 2011 indicate that 2012 only 20 perce 2013 nt of 401(k) 2014 plan >10 to 20 -23.3% 44.6% 19.5% Siz 4.4% e of 401(k) 15. Plan 4% Account Balanc 19.0% e 10.0% 108.8% 11.1% 1 401(k) part 2010 icipants tend to concent 2011rate their accounts i 2012 n equity securities. Th 2013 e asset allocation of the 8.8 million 2014 balances at the beginnin 11%g of the study period than younger workers or those with shorter tenures—showed more All indexes are set to 100 in December 2006. Aggre In other • gate wor Instantly get e-m dat ds, growth a on 401(k rates are a ) pla ans il noti provi fu?nctio d cations of the latest EB e inn sight i of the relati nto the ve pos size sible of RI data, inf the lue dollar nce o surveys, publications, and m fadjustm each ofe the nt to t factors he size th of t at caus he individual e eetings changes in interpretative rule, or as legal, accounting, actuarial, or other such professional advice. ww 8 w.ebri.org contrast, in t 12 he broader EBRI/ICI 401(k) database, 10.7 percent had accounts with more than $200,000, and 23 as they do in the cross-sectional EBRI/ICI 401(k) database. Younger participants or those with shorter job tenures at Figure through Data from the . 1, Co 2 200 >0 20 to 30 1nsistent Sam 4. 4. Th “Contr ICI Surve ese 8. -26. ibutio 8% 8 mi y p of D le n llion Was Olde Behavior 34.8% efined Contribution Plan Record 401(k) pa of r Than Participa 13.5% 40 rticipants m 1(k) Plan 1.1% Parti n ake u ts in the EBRI/ICI 40 cipants p 11. keepers find t a4% grou Durin p 14.9% of consistent g Bull hat DC plan 1(k) Dat and 7.Bear 0% partici abase at pa Markets.” rticipants generally stayed the 55. pants 0% Year (o Nat r a lo -End ional ngitu 2014 Tax 6.5% d.............. in al 5 S S ource: ource: The value of t T Tabul abulati ations ons from from his percentage the E the EB BR RII//IIC CII P Pis lower th a arti rtic ciipant-D pant-D iir recte ecte an it would have be d d R Re eti tirem rement ent P Pllan D an Da aen if it merely refl ta C ta Co olllle ecti ction on P Pr roj oject. ect. ected employee turnover and retirement. Any 2 participants in plans offering loans had loans outstanding at year-end 2014, with the youngest (11 percent of The S&P 500 index measures the performance of 500 stocks chosen for market size, liquidity, and industry group representation. 401(k) plan participants in the consistent group was broadly similar to the asset allocation of the 24.9 million participants in 1 1 account account. modest perce balann ces: contri t growth in buti account siz ons, withdrawal/loan e (Figure 6) activity . For ex, ample, and investm the avent ret erage accoun urns. In t bala recent years, nce of 401(k contributio ) particin ps t ano ts in and seminars by clicking on the “Notify Me” or “RSS” buttons at the top of our home page. 9.5 T The num he num perc ber ber ent of 401(k of 401(k had ) )betw pl plan parti an parti een ci ci $ pants pants 20s 100,0 vari vari0 es es 0from from and y year ear $2to y to y 00,0 ear ear 0ii0 n n at year the the E EB BR RII//II-en C CII 401(k 401(k d 201 ) ) dataase. database. 4. TT he he y year-en ear-end d 2014 2014 EE BB RR I/IIC /IC I I401( 401k(k ) database ) database represents represents 24.9 24.9 Source: T Cons abulations from istent Sample in 201 EBRI/ICI 0Participant-D EBRI 30s /ICI irected R 401( etirement Plan k) Databas 40s e in 201 Data C0 ollection C Project. ons 50s istent Sample in 201 60s4 EBRI/ICI 4Al 01( l k) Database in 2014 >30 -26.4% 29.4% 11.9% 0.4% 9.0% 13.4% 4.1% 37.5% 4.6% their current employers tended to have smaller account balances, while those who were older or had longer job tenures course through the financial cr Association Proceedings, isis and ensuin Ninety-Sixth An g years. During nual Conferenc each year e on Taxation, from 2011 throug Novemberh 2014, fewer t 13–15, 2003,h Chi an 3 p cago: ercent 44–53. of DC time a 401(k) plan sponsor changes ser sample), whicEBR h removes t I Issue Brief his e r ef egister fect o ed in the U. f v parti ice providers, all cipants a S. Patent and T nd pl participants in the plan radem ans ente ark Office. ring a ISSN: 0887 nd leavin would be excluded fr ?13g th 7X/90 e data 0887base. I ?137X/90 $ . nit om the consistent ially, this 50+.50 group was 3 1 participants in their 20s) and oldest (13 percent of participants in their 60s) less likely to have loans outstanding than m million 401(k illion 401(k) ) plan plan The y participants. participants. ear-end 2014 EBRI/ICI 401(k) database represents 24.9 million 401(k) plan participants. The Russell 2000 index measures the performance of the 2,000 smallest U.S. companies (based on total market capitalization) inc the entire year-end 2014 EBRI/ICI 401(k) database. On average at year-end 2014, about two-thirds of 401(k) participants’ luded in the Russell 3000 their 60s increased 47.4 percent (a 10.2 percent compound annual average growth rate) between year-end 2010 and 401 A(k) plans h ll Allave avera -25.7% ged a bit 42.7% over abo 19.3% 8 ut $300 billion 3.7% a ye 16. ar, 6% and benef 22.6%its pai 12.1% d (includ 110.2% ing rollovers) have ave 11.2% raged 2 2 2 Figure 2, Co The nsistent Sam consistent sample p is 3.5 million le Had Lon 401(k) plan ger participants Tenure w T ith h account an Pa balances rticipants at the end of each y in the EBRI ear from 2007 through /ICI 401(k 2014. ) Database at Year-End Participants include the 3.5 million 401(k) plan participants with account balances at the end of each year from 2007 through 2014. tende Participants d to hav include e hi the 8.8 m gher acco illion 401(k unt ) balanc plan participants es. For e with x account ample, balances within at the end the con of eac sistent grou h year fromp, 2010 among through40 201(k 14. ) participants with demogra plan participan Washin p Sour hic gton, ce: Tabul alts stopped contributing ly similar to DC: ationsNational from EBR the ent I/IC T I Par ax Association ire E ticipant- to their 401(k) plan a BD RI/ICI 4 irected R.e ti0 re1 m( ent k) dat Plan D ccounts. Some of a abase at ta Collection year Project. -end these participants may 2010. However, by y hav eare stopped -end 2014, these sample. Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. index (which tracks the 3,000 largest U.S. companies). those in their 30s, 40s, or 50s (Figure 10). In the database, a participant’s account balance is reduced in the year that 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 Altogether, from year-end 2010 through year-end 2014, the average 401(k) plan account balance among the group of Source: Tabulations from the EB RI/ICI P articipant-Directed Retirement P lan Data Collection Project. N assets were invested in equities, either through equity f Refl ote: A ectin ccount bal g thei ances are parti r higher avera cipant g acc e a ount ge an balances d tenure, t held in 401(k he co ) unds, plnsis ans at the tent gro the equity por particiup pants' current em alsto ion of target-d had m pledi oyers an an and ate funds, are d aver net of pl age the an l account oans. equity po Reti bal rem rtio ent an o nsavi ces f ngs N about year-en ote: Account bal nearly d N 20 ote: El 14 $ ances are parti Note: 290 i. Investment gibT lehe EBR bi 401(llion k)I/IC plan par ci I 401(k) (Fi pant r g tie ci acc ure database turns, rath pants ount 8 ar )c. Inv e bal ontains those ances ee i23.4 nstment ret r 401( hel than a million d i k) pl n 401(k 401(k) ans that of nnual u pl ) rns pl an participants ans at the fer c — o loans. interest, ntributio parti at year-end cin pants' current em divi s, generally 2010 den and 24.9 million ds, an accou pl d re oyers at alize year-end and nt for d are a 2014. Participant most of net nd unr of plan l ealize the ch oans. tenure d is R asset eange i tirement nsavi ngs There’s lots more! 4 2014 .......................................................................................................................... held in plans at previous employers or rolled over into IRAs are not included. Components may not add to 100 percent because of rounding. .............................. 5 more than 10 to 20 years of tenure at year-end 2014, older participants tended to have higher balances than younger contributions because they reached the contribution limit. See Holden and Schrass 2016 for DC plan participants’ annual Formerly the Lehman Brothers U.S. Aggregate Bond Index, the Barclays Capital U.S. Aggregate Bond Index is composed of securitie hel partici Nd i otn e :pl T p ans at hants e ana h previ lytenure sa isd ous em isgrown b as of ase the y pl doy o a ear-end indicated.T ers n abit s or a olde m rol plle ed over i or, accru f 3. he 5 m cons nto illio I istent R e nA d s 4 s0 sample are not 1li (kg ) p htly lo la consists n in p cl auded. rng tic of ip 8.8 er job t a th nmilli ts w on 401(k) ithe anur cco plan u es, and accum ntparticipants w balances a ith t taccount balan he e unlated d of eces alarger ac ch at ythe end of ear from count 2007 ts covering government and hbalanc rough 20 e1s 4 . A ge held in plans at previous employers or rolled over into IRAs are not included. the loan is originated, but repayment of the loan in the ensuing years contributes to account growth. consistent partic© 2016, Emplo ipants increased by yee Benefit 89 pe Research Institute rcent, rising from $73,29 ?Education and Re 9 at year-end search 2 F010 und. All to $r 130,493 ights rese at rve year-end d. 2014 1100 13 Street NW · Suite 878 non-target-date balanced f that were much higher tha un n ds, or company the median and avera stock. Younge ge accr 401(k) particip ount balances of the ants tend to h broader a EBRI/ ve higher con ICI 401 c(k) entrations in equities database accounts with each y larger ear from ba 2010 lances. In a through 2014. Cdditio omponents n, may partici not add to 100 percent pants in their because 60s tend to have a of rounding. higher propensity to make appreciation/depreciation vary significantly year-to-year—on net had nearly no impact on assets in 2011 and provided a corporate bonds, mortgage-backed securities, and asset-backed securities (rebalanced monthly by market capitalization). The ind and tenure groups are based on participant age and tenure at year-end 2014. A ccount balances are participant account balances he ex's total return consists of price ld in 401 (k) plans at the participants: those in their 30s with more than 10 to 20 years of tenure had an average account balance of $81,444, compare activities betwe d withen 2008 a participan nd 2 ts in th 015. e year-end 2014 cross s Washington, DC ection. 20005 Visit EBRI online today: 9 www.ebri.org 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. appreciation/depreciation plus income as a percentage of the original investment. than older 401 (Figure A3). A(k) participants. t year-end 2014, the average 401(k) plan account balance of the 2007–2014 consistent group was signific withdr Figure awals, ant 3, Distribution of 401(k) Account boo as s they a t as the stock pproach retir market rose sharply ement. Balances by Size of Account in 2013. Balance ............................................................ 7 (202) 659-0670 www.ebri.org www.choosetosave.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org A research rep ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org ebri.org Issue Brief • September 8, 2016 • No. 426 ebri.org Issue Brief • September 8, 2016 • No. 426 ebri.org Issue Brief • September 8, 2016 • No. 426 ebri.org Issue Brief • September 8, 2016 • No. 426 ebri.org Issue Brief • September 8, 2016 • No. 426 ebri.org Issue Brief • September 8, 2016 • No. 426 ebri.org Issue Brief • September 8, 2016 • No. 426 ebri.org Issue Brief • September 8, 2016 • No. 426 Issue Bri Issue Bri Issue Bri Issue Bri Issue Bri Issue Bri Issue Bri Issue Bri Issue Bri Issue Bri Issue Bri Issue Bri Issue Bri Issue Bri Issue Bri Issue Bri ort from the EBRI e e e e e e e e e e e e e e e effffffffffffffff • September • September • September • September • September • September • September • September • September • September • September • September • September • September • September • September Education and R 8, 2016 • No. 4 8, 2016 • No. 4 8, 2016 • No. 4 8, 2016 • No. 4 8, 2016 • No. 4 8, 2016 • No. 4 8, 2016 • No. 4 8, 2016 • No. 4 8, 2016 • No. 4 8, 2016 • No. 4 8, 2016 • No. 4 8, 2016 • No. 4 8, 2016 • No. 4 8, 2016 • No. 4 8, 2016 • No. 4 8, 2016 • No. 4esear 26 26 26 26 26 26 26 26 26 26 26 26 26 26 26 26 ch Fund © 2016 Emplo yee Benefit Research Institute 17 19 14 11 15 20 5 8 10 16 22 21 25 24 18 23 13 12 7 6 3 2 4 9 Figure 7 Average Asset Allocation of 401(k) Plan Accounts by Participant Age Percentage of account balances, year-end 2010 and year-end 2014 Year-End 2010 2, 3 GICs and Target-date Company Memo: Equity Non–target-date Money other stable- 1, 2 2 4 Funds Funds Balanced Funds Bond Funds Funds value funds Stock Other Unknown Equities Age Group 20s 29.4% 38.3% 8.5% 6.8% 2.2% 3.7% 8.2% 1.4% 1.6% 76.7% 30s 44.4% 21.0% 6.6% 8.3% 2.9% 4.5% 8.6% 2.2% 1.5% 75.3% 40s 49.1% 13.8% 5.7% 9.2% 3.2% 5.4% 9.3% 2.8% 1.4% 72.7% 50s 43.7% 11.6% 6.0% 10.8% 3.9% 8.8% 10.5% 3.2% 1.4% 64.5% 60s 37.2% 12.2% 6.3% 13.1% 5.7% 12.0% 8.7% 3.5% 1.2% 55.0% All Consistent 5 Sample 43.4% 13.0% 6.1% 10.8% 4.2% 8.5% 9.6% 3.1% 1.3% 64.8% EBRI/ICI 401(k) 6 Database 42.0% 11.1% 7.1% 11.6% 4.4% 10.3% 8.0% 2.9% 2.6% 62.0% Year-End 2014 2, 3 GICs and Target-date Company Memo: Non–target-date Money other stable- 1, 2 2 4 Equity funds funds balanced funds Bond funds funds value funds stock Other Unknown equities Age Group 20s 36.0% 37.8% 5.2% 5.1% 1.3% 2.6% 6.1% 4.4% 1.4% 78.8% 30s 44.9% 23.5% 7.0% 6.4% 2.0% 3.2% 6.8% 4.6% 1.5% 76.6% 40s 49.0% 16.0% 6.7% 7.3% 2.5% 4.3% 7.9% 4.8% 1.5% 73.5% 50s 44.2% 14.0% 6.5% 9.0% 3.4% 7.7% 8.7% 5.4% 1.1% 64.9% 60s 38.4% 14.6% 7.1% 10.9% 4.6% 11.0% 7.3% 5.0% 1.0% 56.3% All Consistent 5 Sample 44.3% 15.6% 6.7% 8.7% 3.3% 7.1% 8.0% 5.1% 1.2% 66.6% EBRI/ICI 401(k) 7 Database 43.2% 18.0% 6.9% 8.4% 3.8% 6.3% 7.0% 5.0% 1.4% 66.2% Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. 1 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. 2 Not all participants are offered this investment option. 3 GICs are guaranteed investment contracts. 4 Equities include equity funds, company stock, the equity portion of target-date funds, and the equity portion of non-target-date balanced funds 5 Asset allocation by age group is among the consistent sample of 8.8 million 401(k) plan participants with account balances at the end of each year from 2010 through 2014. 6 The year-end 2010 EBRI/ICI 401(k) database represents 23.4 million 401(k) plan participants. 7 The year-end 2014 EBRI/ICI 401(k) database represents 24.9 million 401(k) plan participants. Note: Funds include mutual funds, bank collective trusts, life insurance separate accounts, and any pooled investment product primarily invested in the security indicated. Age group is based on the participant's age at year-end 2014. Row percentages may not add to 100 percent because of rounding. Percentages are dollar-weighted averages.

Volume 426

Pages 28

EBRI Issue Brief

Jack VanDerhei

Sarah Holden

Luis Alonso

Steven Bass

Retirement