This Issue Brief provides an annual update of a 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 26.1 million 401(k) participants at year-end 2015. The average 401(k) plan account balance for consistent participants rose each year from 2010 through year-end 2015. Overall, the average account balance increased at a compound annual average growth rate of 13.9 percent from 2010 to 2015, to $143,436 at year-end 2015. The median 401(k) plan account balance for consistent participants increased at a compound annual average growth rate of 17.9 percent over the period, to $66,412 at year-end 2015.
Executive Summary
This paper provides an annual update of a 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 26.1 million 401(k) participants at year-end 2015.
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). This paper focuses on consistent participants for the 2010–2015 period.
A few key insights emerge from looking at the 7.3 million consistent participants in the EBRI/ICI 401(k) database over the five-year period from year-end 2010 to year-end 2015.
- The average 401(k) plan account balance for consistent participants rose each year from 2010 through year-end 2015. Overall, the average account balance increased at a compound annual average growth rate of 13.9 percent from 2010 to 2015, to $143,436 at year-end 2015.
- The median 401(k) plan account balance for consistent participants increased at a compound annual average growth rate of 17.9 percent over the period, to $66,412 at year-end 2015.
- The growth in account balances for consistent participants greatly exceeded the growth rate for all participants in the EBRI/ICI 401(k) database. Because of changing samples of providers, plans, and participants, changes in account balances for the entire database are not a reliable measure of how individual participants have fared. A consistent sample is necessary to examine the growth in account balances experienced by individual 401(k) plan participants over time.
Analysis of a consistent group of 401(k) participants highlights the impact of ongoing participation in 401(k) plans. At year-end 2015, the average account balance among consistent participants was almost double the average account balance among all participants in the EBRI/ICI 401(k) database. The consistent group’s median balance was almost four times the median balance across all participants at year-end 2015.
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 twenties was heavily influenced by the relative size of their contributions to their account balances and increased at a compound average growth rate of 43.1 percent per year between year-end 2010 and year-end 2015.
401(k) participants tend to concentrate their accounts in equity securities. The asset allocation of the 7.3 million 401(k) plan participants in the consistent group was broadly similar to the asset allocation of the 26.1 million participants in the entire year-end 2015 EBRI/ICI 401(k) database. On average at year-end 2015, 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 10 Domestic Stock and Bond Market Indexes 1 Month-end level, December 2006 to December 2015 180 Barclays Capital US Aggregate Bond Index4 160 S&P 500² 140 120 100 80 Russell 2000³ 60 Figure 9 Figure 11 40 Most 401(k) Plan Participants Are in Plans With Employer Contributions A Fi ba performa References Mor En g ge lan ur dno nin e c and T g 8, es stt nce 40 a .e rThr . s 1( t 20 e k e e ) nds to 15 nur e Pp la . rMor n C im e have a on o nin ry f tfa r g C ibut s an im cto ta or rns ions s Lifec pact on ais ff , e t B yc e e ct ne le nt a t c A fit h c llo 4 oun s D ese 0 cais 1 t tbalanc ion I b b (ur a k) lsed ande nc P es be , ea s: xe Inv rs t cca e — ont icipant st use, i US m ribut eInt C nv n ont ions la Re est srrge t ibut o , urr w sns part, iion ( tJu hdr , as ne nd — a401(k) w )w . A ahic C ss l a hi e h p n ctd a s plan g ................................ osi loa o: partic tn a Mor ivec ly nin tiv a ip iff t gants’ ye st , ca a t rnd 40 , bala Inc 1( inv k . nces ) e Ast ......... p vla a m iln e ant b le 13 Sarah Holden is ICI Senior Director Figure 8 of Retirement and Investor Figure Research. 5 Jack VanDerhei is EBRI Director of Research. What Does Consistent Participation in 401(k) Plans Figure 3 13 Less Than One-Fifth of Eligible 401(k) Plan For statistics indicating the higher propensity of withdrawals among participants in their sixties, see Holden and VanDerhei r A tende ett ur ye ans a td r to c . -e oThe nd r be por 20 p a wei e t10 e rc .m g e , hte nt to he rnin c d ha to con gnge w ssi tard e asrti.c e n a nt oPercentage of active 401(k) participants q m vuit g e /u rroup ies. A a sg /do e w a clc um a togeth c s si ount en m til s/ er, at b aIa rnde lin a an year-e c xe e ge s/ of t Ao p sn setA a the d 20 rtic p llo ipa aa 15, cc rc n taiount t wh c ts in t ions ipaether nt b S in plans with he a s in um la ir n looki m c ttw he e as rey — nt e n .p nt in g at ie dc ir s w flude .e the E aB s he b RI cons ot /a I h e C vI istent gro il m y da inf ptloy alue be ar se. nu c ae p o nd d Fob r the ry the Luis 40 Alonso is EBRI 1(k) Plan Co Director ntributi of oInformation Technology ns, Benefits Disburand s Figure edResearch Databases. , 1 Steven Bass is ICI Associate Barclays Capital US Aggrega 4t0 e Bon 1(k)d P In la dex n .A San ccount Francisco: Barclays Balances Gl Aobal I mong nvestors. Consistent Generate? Changes in 401(k) Plan Account Balances, 2010 – 1 Distribution of 401(k) Plan Account Balances by Size of Account Balance Figure 9, Most 401(k) Plan Participants A Participants Hav re in Plans With E e Loans Outstanding mployer Contributions .................................................... 14 For example, as o 20 f December 31, 2015, the EBRI/ICI 401(k) database included statistical information on 26.1 million 401(k) 2002. In addition, nonhardship em w ployer contributions (b ithd Consistent rawals, whicS h ample are gey plan assets, plan year 2006–2014) ne W ra as lly Older limited Than to empParticipants loyees who are aged 59½ or older, constitute r entire ee xa lam tiv p EBRI e lesi , ze 34 /IC of pe I 40 trhe ceir 1(k ntc of o ) nt data the ribut base, equities— pa ions rticip to ant the s in t ir ac he equity coun consi t fu bst ands, t la en ntc e sh s a ae mnd e pq le uity inc w ee r m porti e re p a loy sed in t oen of he e at c ira ont target date f tc w om reibu nt pie t ou ions s nd or, a ta unds, t hi v nd e rtrie am g s in 201 ost e hg er equity 40 ow 1( t0, sim h k) raportion pta e irla tof ic r ipa t o of nt s Economist. Any views expressed in this report are those of the authors and should not be ascribed to the officers, Investment Returns, and Assets 401(k) Participants from 2010 Through 2015 Percentage of Perc eligible 401(k entage) plan part of part iciipant cip s w an ith loans ts w out iths ta anding, cco yu ear-end 2015 nt 2 Pla0 n Sp 15 onsor Council of America. 102016. 59th Annual Survey of Profit Sharing 5 and 401(k) Plans: Reflecting 2015 Plan in the EBRI/ICI 401(k) Database at Year-End 2015 p Bloomber lan partici gp Da ants ta. , in New York: Bloomber 101,625 employer-sg po L.P. nsored 401(k) plans, holding $1.9 trillion in assets (see Holden et al. 2017). Using a majority of all withdrawals (see Utkus and Young 2017). 43.1 percent 36 non–tar perce gnt et da of per tte heba year 23 lance .4 between year-end mdill fu ion p nds, art and com icipants in t 2010 pany stock—r he and ent year-end ire da etpresented about two ab2015. ase (a Firg e uin p re 1) la.ns Thi w -thir he rty r- e ds thr t of he ee40 e p m e 1(k p rc lo e )y nt pla e r of c n part on the tr ibu p icipa at re tis. I cnts ipa n 201 ’ as nts in sets 4, trustees, or other sponsors of EBRI, Employee Benefit Research Institute-Education and Research Fund (EBRI-ERF), or 2006 2007 2008 2009 2010 2011 2012 2013 2014 Average 401(k) plan balance for consistent 401(k) Figure 10, Domestic Stock and Bond Market Indexes ................................ Figure 4 ............................................................. 15 Annual flows reported on Form 5500 and year-end Oct. 24, 2017 • No. 439 Percentage of participants by age, year-end 2010 and year-end 2015 Experience. Chicago: 11 Plan Sp baonsor lanc e Cou s inc n il of spe Ac mie fire icd a. ranges, year-end 2015 National Compensation Survey data and historical relationships and trends evident in the Form 5500 data, EBRI and ICI (Fi theg ur consi e 7, s lo tent wer pa sam0 p nel le )w . e The re in t asset allocati heir forties in 201 on of partic 0, whil ipa e 28 nts in t perch ee co ne nt aof rn ly s pistent sample varied ni arne ticipa in 10 p nts in artthe icip e ant nt with ir s ew dea participant rte ab in 401 ase w(e k age, r ) ep in t la a ns heir their staffs. Neither EBRI nor EBRI-ERF lobbies or takes positions on specific policy proposals. EBRI invites comment on By Sarah Holden, ICI; Jack VanDerhei, EBRI; Luis Alonso, EBRI; and Steven Bass, ICI participants by age and tenure, year-end 2010–2015 14 Consistent 401(k) Participants assets, billions of dollars, 2000–2016 Age of Participant Brady, Peter. 2017. “Who Participates in Retirement Plans.” ICI Research Perspective 23, no. 5 (July). Available at 401(k) participants Data from the ICI Surve tend y of to Deconcentrate their accounts fined Contribution Plan Recordkein equity epers find th securities. at DC plan The a particip sset allocation of the ants generally stayed the Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 estimWhere the world turns for the facts ate the number of active 401(k) participants to be about 54 on U.S. employee benefits. million and the number of 401(k) plans to b e about 550,000 p for attern that ties. Thirty also is ob -three peserved in the rcent of the pcross- articipa sectional EBRI/ICI nts in the consist 4 en 0t1 ( sa k) w m dat he ple re a w bas the ere ee . Yo in t mpung loy heir eer pa r fif m tie ad rt s or e icipants ge c osi nt xt rie ibu s, c tions nerally omp (Fi ar ten g eur d e w ded to it 9) h . this research. Figure 11, Less Than One-Fifth of Eligible 401(k) Plan Participants Have Loans Outstanding ..................................... 16 41.3% Tenure Russell 2000 index. Tacoma, WA: Fr Accumulate Significant ank Russell C 20o smp 30a sny40 . s 50s 60 Account s Balances www.ici.org/pdf/per23-05.pdfA . bout the EBRI/ICI 401(k) Database course through the financial crisis and ensuing years.24 During each year from 2010 through 2016, fewer than 3 percent of DC 7.3 million 401(k) plan participants in the consistent group was broadly similar to the asset allocation of the 26.1 million Interest, favor e in 362015 percq e (uity s nt ee of no fupnds an te 2 in articipa d tar Hn otld s in e gn ete t date he t a l. EB 2017; fRI unds, /ICa Ind w da hile o US tabDe ase lde pa ov r rtm parti ere ant ll. cip oants f Labo were Ar, lthoug Emp more like loy h te his e Be figu ln y to efits re invest in fe Sll sli ecurity ght fi ly Axe din t minis d-income he trw ation ak securi e 2016) of the ties . At Age Group (years) 2010 2011 2012 2013 2014 2015 95 95 96 96 94 94 95 5% 94 94 Average 93 p pla arn tic pipa artici ntp s in ants the stoe pnt pe irde cy oe nt arib r-euting nd 20 to 15 the E DB iir vRI i d 401( e/n Id CsI k,) 40 pl1 a( n k) acdca otun abts ase. . SoOn me a ov f e the rag se e p aa t rticip yeara -nts end m 20 ay15 h, av ae b out stoptp w eo d- thirds of The EBRI/ICI Participant-Directed Retire 92ment Plan Data Collection Project is the largest, most representative repository 91 91 91 91 Retirement and health benefits are at the heart of w 10% orkers’, employe 11% rs’, and our nation’s such as Introduc bond f tion unds, mon ey funds, or guaranteed inv 90estment contra fincts (GI ancial Cs) a marke nt d co ritsi her stable val s, reaching a ue low fun of ds. 85 percent in C ye o ap r-y ernd igh 2015, t Inf401( ormk a) ti po la n n : a s Thi sets r s w ee pror e t $4. is 4 cop trily liroight n ( 89 se ed e b Inv y tehe stm Ee m nt ploy Comp 21 ee a Bney ne Ins fit titute Resea 2017) rch I 89 . ns Th tie tu2015 te (EB EB RI 89R) I/a ICI nd db ay tatb he ase 88 89 S&P 500. New York: Standard & Poor’s. 15% 88 20s All $4,963 $8,032 $12,638 $19,106 $24,309 87 $29, 88 737 BrightScope and Investment Company Institute. 2016. The BrightScope/ICI Defined Contributio87 n Plan Profile: A Close 86 Total Total Benefits Gains, and Assets at 85 contributing because they reached the contribution limit. See Holden and Schrass 2017 for DC plan participants’ annual of The 401( inftkor e ) nur m paar ett ion a ic com ip Aa nnt p bn osi out s’ ual ta ion o indi ss p eer tvs w f th idu ce e a en rl 401( e ctonsi c inv hek ang st st )e e p nd la te in e n p sa in m a t qp ruit o tle ic t ie ip al ws, e a a nt r set a it a ls u he co c rr n ount si t ind m hrila oug s. ex rA th e s of o tq he uit D e ty e cnur e funds, mb ee crom 31 the p , o 20 esi qt1 uit ion o 5, y tp he f 401 or E tion o BRI (k/)I f t C pa I a rr40 tgic e1 ip t (d a knt a ) te s in economic security. Founded in 1978, EBRI is the most authoritative and objective source of 2010, it had generally rebounded by the end of the Investment Company Institute (ICI). 19 It may be used without permission but citation of the source is required. The covers EB48 RI/I pe Crc I e 4nt 01o (k f )the da 1tun abiv ae sres, e w ohic f 401( 2h is c k) onst plan ru pa ct rticip e 3 d fr ao nt m s , t18 he 4p ae drc meini nt st orf ap tiv lae ns r, ea cnd ord43 s of p e40 rce 1( nt k)o f p401( lans, k) reppla re n sen asste s a ts. l arge 79 Look at 40 Con1(k tribu ) 78 P tiolans, 2 ns D0 is1 b4 1 u. rsSan D ed iego, Othe CA r Ite: Bri ms ghtScope Year-Endand Washington, DC: Investment Company Institute. 77 >5 to 10 4,988 8,108 12,913 19,644 25,100 30,938 $143,436 What Does Consistent P 6articipation in 401(k) Plans 18 EBRI/ICI 401(k) Database 76 28% Finally, t a fun he ctiv dyiti s, t ee a loan s rhe -b ee nd e tw o quit e 20 r with en y 10 2008 p or E dra B tion o Rw a I/ nd al IC f non a I 2 c 016. 40 tivities can 1( – tFor ka )r g da e an t tad h a ba na a ave an tse. e lyb sis a For la o impact n f c ce e oxa d ntrib fun m on p ution d les, or c , 401 31 a (k cp tiv om e ) acc rity cp e nt a do ny uring unt balanc of sttoc he the k c . onsi b Ye oung es. Althou ar stma ee nt r rk 40 sa et m 1( gh, i of p k2000 le ) n p ha a gene r– d tic 2002 fiv ip ral, very a ent or us s ing fe tew nd f th eere w t o datainformation on these critical, complex issues. base included statistical inform 74ation about 26.1 million 401(k) plan participants, in 101,625 employer-sponsored 73 1 US Department of Labor, Employee Benefits Sec 26% urity Administration. 2016. Private Pension Plan Bulletin, Abstract of 72 72 longitudinal study. Regarding individual participants’ 71 1 cross section, or snapshot, of 401(k) plans at the end of each year. It is a cross section of the entire population of 2000 $169 $172 -$79 EBR 1I,/7 IC 38 I 401(k) Database 26% 2 Available at www.ici.or 2 g/pdf/ppr_16_dcplan_profile_401k.pdf. 12 30s All 23,684 27,973 36,614 49,677 58,858 66,185 Because of these changes in the cross sections, comparing average account balances across d$132,659 ifferent year-end cross- cross-sectional Consi sEB tent R S I/ am ICI ple401(k) databases, see Holden and VanDerhei 2004. The analysis finds that, overall, 401(k) active 401(k) 40 yGe ha ea v 1( r e s of kn highe ) pe la ter ns nur r a c , on plan hold et e in 201 ce partic ? ing nt C ra$1 0, tions h ipa .9 com a tn irn e ts take ipn lliaon rg qeuit de in a ie w withdrawals, s s t it ss h 39 p i ha en ts. The n o 40 e lde rce r 20 nt 1 40 participants in their 1 (k) of 1 5( E k p) B a Pl R rpta Iic /I rip tC ica a Iipa nt 4n 01 s in nt Accou ( s. kt)he d sixties tend to a e ta nt bir ae se En c Bov RI t e /I have Ba re Cd I 40 48 lan a h 1 pe (kigh )r cd c eer a nt e t pro a b of s ase , tphe ens 2 ( Fi uni 0 ity to gu v1 re er0 se 2) make – . of Recommended Citation: Sarah Holden, Jack VanDerhei, S&P 500 Luis ² Alonso, Rusand sell Steven Bass. 2000³ B “What arclay Does Consistent s Capital US Aggregate Bond Index4 2014 Form 5500 Annual Reports (Version 1.0). Washington, DcC ont : US ribut De ion para tm cte ivnt ity of , dL ea fin bor ed , c Eont mprlo ibut yee ion (D BeneC fit ) s plan 401(k) plan participants, and it represents a wide range of participan 2ts—including those who are young and individuals 2001 174 147 -119 1,701 35% 13 Consistent Sample EBRI focuses solel> y 5 on emplo to 10 16,y 267 ee benefits research — no lobb 20,828 28,947 41,075 ying 50,or advocacy 442 58,132. withdr p s Ee a ight c rticip tional ee awals, annts sp na e ’ rc pc o a se ntrib ho snt they a ts of ution ca the n pproa le rca aon d t tes sch retir o is w fal te ere nt se li s c e ttl a o ment. m nc e p c lus le ha io ng ha ns e d. d m For in or2000, e ex taha mp n 2le 001, 20 , ne y a e w nd aly rs of fo 2002 rme tew nur d p he le a n ns in 201 cow mp ould t a0, red a e s d nd to id 1999. to 15 pull p On e drocw aev n nt era the of geta ,he v401( e ragk e ) a Pc atriv tie cipa 40t1( ion in 40 k) plan p 1(a kr) tic Pla ipns antG s, ene 18r a pteer? ceCnha t of nge pla s in 401 ns, and (k43 ) P la pe n Ac rcent co of unt 40 B1 a(la kn ) cpela s, 201 n assets 0–2015 . The .”E EBBRI RI /IIC sIsu pe roje Brie ctf , isno. EBRI Employee Benefit Research Institute Issue Brief (ISSN 0887 -137X) is published by the Employee Benefit Research Institute, Security Administration (September). Available at 13 2015 participants tend to continue contributing in any given Deloitte Consulting LLP. 2017. Defined Contribution Benchmarking Survey—From Oversight to Participant Experience: who 2002 are new to 182 their jobs, as w 147 ell as older -p 2a 0r3ticipants a 1,nd 565those who $119,172 have been with their current employers for many 1100 13th St. EBRI NW, stand Suite 878, s alone in em Washington, DC, ployee 20005ben -4051, efits at $300 rese per aryear ch a or s is an included independ as part en of t, a nonprofit, and no membership subscription. npartisan 22.0% participants’ contribution behavior does not appear to have been materially affected by the bear market in equities from 2000 a p uni c acrq o tiun ue cipa t bb nt eacla s in anc use e t, he of but e itnt s inc wir ould e lus EB t> e iR on 10 t ll I/I us of o 20 Cno I d4a thing 01 ta( p k 35, r )a o d b v 251 o a ide ut tab d ca ob se. ns y is 39, a te w 478 ntl ide y p va art rie ic 49,347 tip y aof tinp g la w n r ork e 65,066 e crosr. dS kimi eep lae rlr 75, y s, p , 158 the erm agitgtre ing 83 ga,tt 948 he e a v ae na ralg ye sis o accf ot un he t 439 and ICI Research Perspective 23, no. 9 (Oct. 24, 2017). 14 www.dol.gov/sites/default/files/ebsa/researchers/statistics/retyear ireme to nttheir -bulleplans. tins/private-pension-plan-bulletins- yea2003 rPlan Sponsors s. For examp 186 le Are Takin , at year-e gnd Their Fi 1412015, duciary 14 pe 300 r Role cent of Up40 a1 1 Not ,( 9k 3)2 cpha.r New ticipa York: nts in t Delo he E itte Co BRI/IC nsulting LLP. Av I 401(k) databa ailabl se we at ere in their Presorted standard postage rate paid in Dulles, VA. POSTMASTER: Send address changes to: EBRI Issue Brief, 1100 13th St. NW, organization. It analyzes and reports research data without spin or underlying agenda. All findings, 33% 25% 28% Figure 6 through 2002, whether measured in dollar amounts or percentage of salary they contributed. activSuite ity of 878, par Washington, ticipants in 401 DC, 20005-4051. Copyright (k) plans of varying 2017 siby zes Employee —from v Benefit ery laResearch rge corp Institute. orations All trights o smreserved. No. all business43 es 9— . with a variety balance would te 4nd 0s to be pulled Ad llown if a 58, larg 949 e numbe 64, r o 038 f particip78,056 ants retire a 101, nd 162 roll over 114,770 their accoun 125, t ba68 lanc 2 es. abstract-2014.pdf. 2004 38.8 www2.deloitte.com/content 204 167 /dam/Deloitte 204 /us/Docume 2,1nts/human 93 -capital/us-hc-defined-contributio 17n .2s %-benchmarking- twenties, while 11 percent were in their sixties (Figure 1); 20 percent of participants had two or fewer years of tenure whether on financial data, options, or trends, are revealing and reliable — the reason EBRI information is 8 As expected, the consistent participants who were followed over the five-year period tended to have longer tenures by Report availability: This report is being published simultaneously as EBRI Issue Brief, No. 439 and ICI Research By Sarah Holden, ICI; Jac Chk V ang ae nD s ie nrhe 401( i, EBRI k) Pla ;n Lu Acco is Alo unns t B o, al E an BRI ce;s a A nd mo S ntg even Bass, ICI $94,955 of investment options. Between year-end 2010 and year-end 2015, the US 2005 >5 to 10 29,184 34,646 45,488 62,252 74,360 83,640 the 223 gold standard 189 for private analysts a 146 nd 2,3 de 93cision makers, government policymakers, the media, and survey-report.pdf. a 15t their current jobs, while 5 percent had more than 30 years of tenure (Figure 2). 3 See Holden and Schrass 2017. 29% year-end 2015, compared with the broader base of 401(k) participants in the EBRI/ICI 401(k) database. Participants in P e Ac rspe coun ctt ivb e ala 23 nc , e no. s ar9, e ne avt ao ilf ab ule npon aid tloa he n Int bae la rne nce t sa . t www.ebri.org and www.ici.org 12.5% Utkus, Stephen P., and JeC an oA n. si Young sten. t20 401( 17. k) How P ar Am tie ci rip ca an Sa ts vef s 2 rst o01 oc m7 k 2010 : m Aa Re rke T pt or h gr te o ne on urg a Va lly hngua 2015 rose rd( Fi 20 gur 16e D 10 efin ), e w dhic h tends 11.9% 32.4 2006 the public. 251 228 303 2,773 >10 to 20 66,071 71,358 86,769 112,211 127,273 140,367 $80,333 10.2% the consistent sample, by definition, had more than five years of tenure in 2015 (the length of time for the longitudinal Sources and Types of Data 9.8% $76,293 24% Contribution Plan Data. Valley T For he g Em e, p Plo Ay : eThe e BeVa nefngua it Rer se da G rcr houp Instit , Va ute ngua (EBRI) rd C e wnt as er fo fo unrd Re ed tin ire 1 m 9e 9 7.nt 8 1% . Its Re sea missio rch. n is to to provide a boost to 401(k) plan accounts holding 4 Holden, Sarah, and Daniel Schrass. 2017. “Define 24% d Contribution Plan Participants’ Activities, 2016.” ICI Research Report A 16lthoug 2007h annu $74,983 al up 273dates of Pe the 261 rc e En Bt c RI/I ha Cn I g40 e215 i1( n a k)v d ea ra ta gb ea 4 2 se ,0 91 7p( 5k rov ) p ide lan v a ac lucao bu le n t b pea rspe lanc cte iv a em s of ong 401(k) plan ac $73,357 count 8.2% 27.2 The value of this percentage is lower than it would have been if it merely 26 r.e9 flected employee turnover and retirement. For 24% 26.5 $72,383 For the complete update fro >20 t m o 30 the year-99, end 451 2015 EB 104,527 RI/ICI 401(122, k) d220 atabase, 155, see 527 Holden 172,049 et al. 2017. 188,269 contribute to, to encourage, and to enhance the development of sound employee benefit analysis), with none having 7.3%five or few 6.7 e % r years of tenure, 32 percent having more than five to 10 years, 41 percent Available at https://pressroom.vanguard.com/nonindexed/How eq -A uit mie er s. On ica-Sa av ve esr-a2g01 e, 7.p about df. two-thirds of the Several EBRI and ICI membecro s p nsriov stide entd 4 r0 e1 c( $63,929 o kr)d pa s on rtic aic ptant ives p b aryt ag icipa e a ntn s in 401 d tenure (k,) 20 pla 10 ns –2 for 01 5 which they kept records at bala 2008 n (June EBRI explo ces, a ). Ava sset a ila 285 llo ble res the breadth of emplo ca at tion, ww aw.ici nd 233 loa .org/ n apdf ctiv/p ity pr_ -a 77 c16_r 0 r 5o .5ss % y ec_survey ee ben wide2 c ,2 ro 0efits and related issues. 3 ss _ q4. sect pd ions f. of participants, cros s-sectional analyses are not 5.1% Who we are example, if 401(k) plan sponsors change their service prov4 id .7e %rs, all participants 3.5in % those plans would be excluded from the programs and sound public policy through objective research and education. EBRI is the only 50s All 101,348 107,581 126,134 157,883 175,356 190,284 $60,329 A T A G L A 4.0% N C E having more than 10 to 20 $58,991 years, and 27 p3e .9 r% cent having more than 20 ye 19% ars (Figure 2). In contrast, in the entire Table of Co 16ntents 3.1% 17 3.1% EBRI studies the world of health and retirement ben consi efits st— issue ent samp sle such a of 401 s( k 240 .) 8% p 1(k)s, arA tic nnual ipa IRAs, retire nt As’ ver ac age count ment yea2009 r-end 2015. 256 These plan r206 ecordkeepers inc 431lude mut2 ua ,7l1 8 fund companies, banks, insurance companies, and w eTh ll sui e EB teR dI/ tICI o exa 401( mini k)ng data the ba im se p ea nc vtiron of me parnt ticiipa s ce tion in rtified 40 to 1 b(ek ) fu 2p ll .5la y % n co s ove mplia r nt tim we ith . C the ross IS se O-c27002 tions c Inf hao nge rma in c tion om Sep curity osition Au dit private, nonprofit, nonpartisan, Washingto 2.n 1, % DC-base 1.8 d% organiza 14%tion committed exclusively to 20 30 40 50 60 All s s 12% s s s 1.6% 2% $10M or le 10% ss >$10M to $100M More than $100M All plans consistent sample. >5 to 10 36,834 42,603 54,106 72,208 85,067 194 6.0 ,716 EBRI/ICI 401(k) database in 2015, 39 percent of participants had five or fewer years of tenure, 22 percent had more I Holden, ntroduc Sarah Ag tion e ................................ incom , and Jack Te enur ade e Van quacy, Derhei. 2001. co ................................ nsumer-drive “The Im n pact o benefits, ................................ f Employ Socia er-S l Security, elected Investm tax treatment of both retireme ................................ ent Options o Gn r.......................... 401(k) Plan ow th Rate, nt and health 5 16.3 public policy research and educatio bn a la on n ce ec s w onoe m re ic inv sec eust rit eyd ain e nd q em uit pie los (F yee igu benree fit7) issu . es. consu 2010 lting firms. A 265 lthough the243 EBRI/ICI 401337 (k) project ha 3,1s c 19ollected data from 1996 through 2015, the universe of data from year to year because the selection of data providers and sample of plans using a given provider vary, and because standard. Moreover, EBRI has obtained a legal opinion that the methodology used meets the privacy standards of the Gramm- Age of Participant 15.1 Plan Assets 13.7 Group (year Cons sis )tent Sa 2010–2011 mple in 2010 2011–2012 EBRI/ICI 401(k) Data 2012–2013 base in Cons 2013–2014 istent Sample in 2014- 2015 2015 EBRI/ICI 4 2010- 01(k) Data 2015 base in 2010–2015 benefits, cost management, worker and employer attitudes, policy reform proposals, and pension assets than five to 10 years, 24 pe >r10 t cent o 20 ha EBRI’s d m77, orm e 667 etm ha be nr sh 10 ip 83, to in942 c20 lud y es ea a rc s, 100, roa ssnd 974 -sec 14 tio n p e o 128, rfc p ee 426 nt nsio ha nd f um n 145,580 d or s; eb t uh sin an 20 ye esse 160, s; trad 92 ar3 e s. a ssociations; Participants’ Asset Allocations: Prelimi 2 nary Findings.” Working paper prepared for the Center for Pension and 2011 283 250 -1 3,112 This pap <$e 1r 0 ,p 00r0ovide $10s a ,000n a to nnu >$20,a 00l up 0 to d >$ a3t0e ,0 0 of 0 toa >long $40,0it 00udin to >$ a 5l a 0,0na 00 tly o si >$s of 60,00Subd 0 40 to1> ($ ue k 7) 0 d ,p 00lst 0 a n p toc o >k $ a8r m 0t,ic 0a 0ir 0p k ta e ont t >p $s d 9e 0r ,0for r0a 0w tm on fr > a$n 1c 0 o 0 e m ,0in 201 0 0 t he to >E $2 1 w B 0RI 0,0/I a 00s CI 5 providers varies from year to year. In addition, the plans using a particular provider can change over time. Records 40 Sa Lea m 1( ch p k-le )Bl p of ila erytC ic Ac onsi ipt. a nt st At e s j no noin o t 40 tim 1( e r k le ha ) aP sv a a erny tp ic la ipa no ns np n .t ub s, 20 In a lic d 10 pd eit r–s ion, 20 ona 15 l the info ................................ arna maly tion sis c tha ovt eis rs paecrc sount o................................ nall yb id ala enti ncfia es he ble,ld suc in 401 h .............................. as ( ak S ) opclia ans l S e acturit y 5 2010 2015 For the report on the year-end 2010 EBRI/ICI 401(k) database, see Holden et al. 2011. Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. 20s All 61.8% 57.3% 51.2% 27.2% 22.3% 499.2% 43.1% and Source: IC $fundi 20,0 I tabulations of U 00ng. $There is wi 30,00 S D 0 epartment of Labor Form 5500 R lab $40 o ,0 r de 0u 0nspread ion$ s; 5 0h ,0 e0 a0 re lthcog c ea s $earch File. re 6n 0 ,p 0 ition 0 r0 ovidthat if employee be e$r7 s a 0,0n 0d 0 insu $re 80rs; ,000gove$ rn 9 n 0 m e ,0e fits 0n 0t odata exist, EBRI kno rg $1 a0 n0iza ,00ti 0 ons; an $200,d 00 se 0 rvicew fir s m it. s. Retirement Research (CPRR) Current Pension Policy Issues Conference, Miami University, Oxford, OH (June 8–9). 2012 303 >20 t 282 o 30 145,074 357 151,616 3,495 175,474 217,815 239,724 261,799 Note: Eligible 401(k) plan participants are those in 401(k) plans that offer loans. followed by stronger growth in 2012 through 2014 40 we1( rek e ) nc dartyapbta ese d t— o tc he on la cera gl th est ep ide artint cipa ityn of t-le ev m ep l d loy atearb s aase nd of e m its k ploy ind, ees, b with a ut w bou ere t c 26 od .1 e d m silo lion 401( that 7b.ot 8kh coul ) partd ic ip be a n tr ts a ackte y de ov ar-er participants’ current employers. Retirement savings held in plans at previous employers or rolled over into individual number, been tra Source: nsfe Trre abulations d to fo rom r s EBR haI/IC red I Participant-D with EBirect RI. ed Retirement Plan Data Collection Project. 7.0 >5 to 10 62.6% 59.3% 52.1% 27.8% 623. .5 3% 520.2% 44.0% B Ay g ey e aa nd r-eTe nd nur 20e 1 5 of , tC he onsi con ste sin stt e40 nt1( sa km ) P pa ler tof icipa 40n 1( tsk ................................ ) particip 5a.nt 9 s also was old ................................ er, on average, com ................................ pared with the .... 7 6.0 6 5N .5 ote: The EBRI/ICI 401(k) database contains 23.4 million 401(k) Size plan of 4 participants 01(k) Pl a at ny ear-end Accou2010 nt Band ala26.1 ncemillion at year-end 2015. The consistent 5.2 Tenure refers 17 to years at the current employer and is generally derived from date of hire reported for the participant. Tenure 4.9 2013 325 326 645 4,148 3 4.2 end 2015. >30 190,164 198,536 224,( 591 with pa276, rticula 045 rly str298,784 ong apprecia 319, tio67 n in 7 2013), but multiple years. For each participant, data include date of birth, from which an age group is assigned; date of hire, retireme n 30 t s accoun sample ts ( consists AIlRA l of 7.3 s) a m re 18.1% illion not 401(k) inc plan lude participants 30. d 9% in twith ac he a count n35.7% aly balances sis. To at thee 18.5% end xplore of each t year hef rom ful 12. 2010 l im 4%throu pac gh t 2015. of 179. ong P5% articipant oing age pis ar age t 22.8% ic as ipation in EBRI’s work advances knowledge and understanding of employee benefits and their EBRI delivers a steady stream of invaluable research and analysis. 26.1 million participants in the entire EBRI/ICI 401(k) database. For example, only2 2 p .1 ercent of the participants in the Holden, Sarah, and Jack of the year-end indicated. VanDerhei. 2002. “Can 401(k) Accumulations Generate Significant Income for Future 18 1.4 2014 349 366 278 4,406 Consistent Participants Have Accumulated Sizable 401(k) Plan Account Balances ....................................................... 7 wil Ac l no co t un ret fle bc at lathe ncey s eaarrs o e ne f tp o af rticip unpa aid tion loa in n the bala401( ncesk.) Th pla us n , if un the paid 401( loakn ) b pa la la n nc we ass a are dd no ed b t inc y the lude ed m in ploy ane yr o af t the a la e te ig r ht daa te sso er t if 0.5 >5 to 10 28.0% 39.0% 41.9% 22.8% then follow 15. ed 2% by mod257. erat4% ion in 2015 29.0% (Figure 10). from which a tenure range is assigned; outstanding loan balance; funds in the participant’s investment portfolios; and 401(k) plans, a 6 nd 0sto understand All how imp o 40 rtan 118,143 1(cke) to pla thn p e n 124,008 a ati rtoic nipa ’s ent cos ha no 140, mv y e 352 a m fa orn egd pov 166, olie cr y 997 m an e akers xt,e 178,287 th nde e nd e w ps er m iod ed 184, ia, , it a 85 is nd 1im thp e or putb ali nct. tIt o Source: Tabulations EBRI from EBRI/ICI publications Participant-Directed include in-de Retirement pth cove Plan rage Data Collection of key issues a Project. nd trends; summaries of research consistent group were in their twenties and 19 percent were in their thirties at year-end 2015 (Figure 1). In the entire Retirees?” Investment Company Institute Perspective 8, no. 3, and EBRI Issue Brief, no. 251 (November). Available 2015 N/A N/A N/A 4,445 Becaus 1 e the annu> a10 t l cro 20 oss sect12.0% ions cover p 25. art 0% icipants w 31.9% ith a wide 15.5% range of pa11. rtic 7% ipation e 138. xpe 1% rience in 401 19.0% (k) plans, The year-end 2015 EBRI/ICI 401(k) database does threpresents is by con 26.1 ducmillion ting a401(k) nd pu plan blisparticipants. hing policy research, analysis, and special reports on categories described. Though contributions and loan repayments also play a a the ssre a etW vre re alue hat we s strictio attribu ns t e odo d n t po a rtici those pating fund in s. A the n a 401( ccoun k) ptla b n aimm lance ed for iate e ly ac up h p on arhir tice ipa . nt is the sum of the participant’s assets in C an ha alnge yze s in C a conosi ns stis e finding nt tent g r40 oup s 1( and o k) f p Ppolicy a ar rt tiic cipa ipa develo n nt ts ( s’ A ac p long cments; ount itudin Batimel la an l c sa eys m factsheet ................................ ple) who s ha on vehot topics; been p................................ art of regula the d r aup tab da ase tes for on legi .................... an ext slat enive ded and 8 2 >5 to 10 38,210 44,096 54,729 69,815 79,900 85,298 The consistent sample is 7.3 million 401(k) plan participants with account balances at the end of each year from 2010 through 2015. EBRI/ICI 401(k) database at year-end 2015, 14 percent of participants were in their twenties and 24 percent were in at www.ici.org/pdf/per08-03.ped m f pan loy d ee www.ebri.org/pdf/bri benefit issues; holdinge efd su pcdf ati /1 on 1a02ib l brief .pd inf g. s for EBRI members, congressional and 2016 40s N/A All N 8. /A 6% 21. N 9% /A 29.6% 4,825 13.5% 9.5% 113.2% 16.3% meaningful analysis of the potential for 401(k) participants to accumulate retirement assets must examine the 401(k) 18 -1.6 regulatory developments; comprehensive refere role nce in t resou he gr row ces th o on f th benefit pro e average grams 401(kan ) pd lawo n arkforce ccount all funds. Plan balances are constructed as the sum of all participant balances in the plan. -2.0 period—in this case, 2010 through 2015. Note: Account balances are participant account balances held in 401(k) plans at the participants' current employers and are net of plan loans. 7 >10 to 20 76,102 82,232 96,287 117,501 128,832 136,698 19 Sources: Investment Company Institute and Depart fedem raent l a g oe f n Labo cy sta r. ff, and the news media; and sponsoring public opinion surveys on employee B the acir k gtr hi orund ties. Fa Thi ctr otry > s I - 5 fitn v o e flu 10 peenc rcie ng 18.7% nt 40 of 1( the k) p Pa la 31. rt n As ic 3% ipa se nt ts in s ................................ 36.9% the consiste 19.4% nt samp ................................ le 12. we5% re in the186. ir fif6% ties a ................................ nd 15 23.4% percent were in 11 Although 2010 the average account 2011 balance for the entire 2012 database at year-e2013 nd 2015 is lower th -a 4n .2014 2the average accoun2015 t balance ThisRetirement system o savings f class held ifica in tion plans dat oe previous s not cemployers onsider th or e rolled numb over er into of IRAs distinc are t not inv included. estment Components options p may resnot ent add ed to to 1 00 a g percent iven participant, -4.4 plan accounts of participants who maintained accounts over all of the years being studied (consistent participants). This issues; and major surveys of public attitudes. 1 balances observed, the pattern of account balance because of rounding. benefit issues. EBRI’s Education and Research Fund (EBRI-ERF) performs the charitable, Total contributions include both employer and employee contributions. Holden, Sarah, and Jack >10 to 20 VanDerhe 8.0%i. 2004. 21. “Contri 6% bution 29.3% Behavior 13.4% of 401(k) Pl 10. an 3% Participants 112.4%During Bull 16.3% and Bear their sixties, compared with >20 t 26 o 30 percent 144,958 and 11 perc 150,795 ent, respec170, tive132 ly, in the 200, ent 830 ire data 214,399 base at yea 223, r-end 1322015. at year-end 2014 (Figure 4), this is entirely the result of participants and plans entering and leaving the database. Among the but rather, the typEBRI es of optionmeetings s pre spresent an ented. Prelid mina explore i ry reses asues rch ana with lyzin thou g 1.4 ght milleade lion pa rs rticip from all se ants draw ctors. n from the 2000 A p Inv a bp out e ers foc tthe mus e En e Bs on t RI O /Ipt CcIo io 40 ns ns is 1(t k e) nt D p aa ta rtbic aipa se................................ nts for the 2010–2015 ................................ period. ..................................................... 17 educational, and scientific functions of the Institute. EBRI-ERF is a tax-exempt organization growth rates from year to year also reflects the stock 2 >20 to 30 5.1% 16.9% 27.3% 10.6% 9.4% 89.3% 13.6% Total benefits disbursed include both benefits paid directly from trust funds and Median Figure 2 Markets.” National Tax Association Proceedings, Ninety-Sixth Annual Conference on Taxation, November 13–15, EBRI regula >r30 ly provides 226,729 congres 233,656 sional testimony 256,738 , and 300, briefs p 328 olicy 312,815 makers, mem 321,08 ber 6 organizations, EB samp RI/lICI e of 401( partici k) p da ants taba w sho e sug weg re esp ts r etha sent t th in e the shed ea r tnu abmb ase ein r ob f oinv th e2014 stment and op 2015, tions p th re e a sev nt ee ra dg d e a oecsc no oun t t influe balanc nce inc e particip rease ad nts by . supported by contributions and grants. 19 premium payments made by plans to insurance carriers. Amounts exclude benefits 50s All 6.2% 17.2% 25.2% 11.1% market perfo 8.5% rmance. 87.8% 13.4% In the EBRI/ICI 401(k) dataConsistent base, investm S eample nt option Had s arLonger e groupeTenure d into eight Than broa Participants d categories. Equity funds consist of Sources and Types of Data ................................................................................................................................17 2003, Chicago: 44–53. Washington, DC: National Tax Association. Consistent P and artthe medi icipant a son employe Have Acc r benefits. umulated Sizable 401(k) Plan Account Balances A paid few direc ke tly“ by 40 y in ins 1( uranc s kig ) P h e la ts cn As arriers em s . erge fr et Alloca otm ion lo , A oc kcin ou gnt a t th Balae 7 nce.s, 3 m and illiL ooa n co n Ac nt siivsit ten y in 201 t par5” tic rie pp aor nts ted in y th eare E -end BR 20 I/ 1ICI 4 5 01(k) 3. On 1 a pv ee rc ra eg nt e,b p ea tw rticip Ae llen ay nts ea rha -ev ne d 2014 10. All4 da is nd tiny c74, e t a or983 p -tions end 2015, but, 80, ofro 333 n a m ve $83, rage 94,955 175 , cho to os $85, e only 119, 729 2. 172 (5 the (se ae v eH 132,659 ra og lde a en ca cnd oun V 143, t ab nD a43 la en rhe 6ce i c2001) alcula.t e In d for >5 to 10 15.7% 27.0% 33.5% 17.8% 11.3% 157.1% 20.8% 1 in the EBRI/ICI 401(k) Database at Year-End 2015 pooled investments primarily invested in stocks, including equity mutual funds, bank collective trusts, life insurance EBRI/ICI 401(k) Database 3 EBRI issues press releases on newsworthy developments, and is among the most widely quoted C Trhanges e Inds nvesin t tme he nt in cOp ons C tio is ons tns en ................................ ti s gt ro e up’ nt s a 4c0 cou 1( nt k) ba P la................................ ar ncets highl icipant ights t’ he A acc cc................................ u om unt ulat ion e Balanc ffect of es ong ................................ oing 401(k) participa.......... tion. A17 t This category includes interest, dividends, rentEBRI , net gains Issue or loBrie ssesfs on is sale a se ofrial ass et w sit , h in-depth evaluation of employee benefit issues and trends, databasa e ov ccount er Source: th bae f la Tabulati niv ce e, - oa y ns ss e fr a e or tm perio a th llo e E cB aRI/ICI td ion, fr o Pa m articipant-Directe nd yloa ear n -en actd iv d Reti i2 ty 0 re 1 rm e 0 su ent to lt Ps y lan for e Da a trt a- he C en o lle E d cB 2 tiRI on 0 /P 1 IrC o 5 je I. c 40 t. 1(k) database, which addition, the prelim >ina 10 t ry o 20 analysis 8. fo 1% und that 20. 401( 3%k) partic 27.2% ipants are no 13.4% t naive—tha 10.t 5% is, when 107. give 2% n n options 15.7% , they do not Withdrawals and borrowing reduce 401(k) plan the 19.4 million 401( Percentage k) plan particip of participants by years of ants who had account bala tenure, year-end 2010 and nces at both year-end 2014 and year-end year-end 2015 2015). See Holden et 2 sep Holden, arate Sarah accoun , Jack Va ts, a sound rces nDer othe on hei, Luis r e pm oole ployee d Alons inve be st om n , and Steven e efits nts. Sim by all media. ilarBa ly, ss. 2011. bond fun“401(k ds are )a Plan ny p Asset Allocatio ooled account p nr, im Account Ba arily invest lan edces, in unrealized C apprec onsistiat ent io S n am or pl deprec e iation of assets, and other income and expenses. Note: The analysis is based o an s a w sample ell as oc f rit 7.3 ica millio l an n a 40 ly 1 se (k)s plan of participants employee with ben acc efit o unt po li balances cies an at d th pr e o end posa ofls. eacEBRI h year Notes is serial year-end 2015, 22.0 percent of the consistent group had more than $200,000 in their 401(k) plan accounts at their Refer eO ncur es ................................ >20 to 30 4.5% ................................ 15.7% 24.1% ................................ 10.1% 9.2% ................................ 80.5% .......................... 12.5% 18 In any giv consi en ye sts of ar, the a l acrha geng cre oss in a se p ca tiron ticipa of n 26 t’.1 s a m ccill oun ion 40 t ba1( lak n) c e p la isn p a ca orm ticbipa inantt ion o s. Thi f th s p ra ep e efa r c ptro ersent s: s a divide their assets amo CHECK OUT EBRI’S WEBSITE! ng all n. Indeed, less than 1 percent of participants followed a 1/n asset allocation strategy. Plan The bulk of this category is net investment gains or losses. Years of Tenure account balances in the EBRI/ICI 401(k) database, al. 2017. from 201 0 through 201 5. Age and tenure groups are based on participant age and tenure at year-end 201 5. The all category EBRI directs members and other constituencies to the information they need and undertakes new and Loan Activity in 2010.” ICI Resear providingch cuPerspectiv rrent informe ati 17, n on on o . 10 a va, an rietyd oEBRI Issue f employee bBrief enefit , n to op. 36 ics. 6 (De EBRIc ee f m is be a r) we . ekly bonds. Balanced funds are pooled accounts invested in both stocks and bonds. They are classified into two ? The average 401(k) plan account balance for consistent participants rose each year from 2010 through year- c 4 urrent employers, w >hil 30e anothe 4.4% r 17.2 per 13. ce1% nt had be 22.9% tween $1008. ,000 2% and $2 7.0% 00,000 (Fig 68.1% ure 3). In cont 10.9% rast, in the Estimateslong through itinc udina 201 lud 4 eare sl pa ar bas na ticed l ip yasi o nt n s st— he wittD h he epart m isa sn in ma g ent ly ten s ois ur f Labo e of info40 r rm Fo1( arm tio k 5500 n ). A pc ac R rot es i uc nt earc ipa bah n lan ts cew s aho re pa m rta icint ipant aine accd o ua ntc ba coun lancets s e held ac in h ye 401(ka ) r p la fr ns o m Sponsor Council of America 2016 indicates that in 2015, the average number of investment fund options available for 0 to 2 >2 to 5 >5 to 10 >10 to 2 whil 0 e loa >20 n r to 3 e0paym>3 en 0t has a positive impact. Endnotes ................................ research on an ................................ ongoi roundu ng p o ba f EBRI sis. rese ................................ arch and insights, as we ................................ ll as updates on survey............................ s, studies, litigation, 20 8 publications subcAvailable ategories: t at aw rg ww.ici.or et date fun g/pd ds a f/per nd 1non 7-10 –.p tadf rg e and t dawww.ebri. te balanceo drg/pdf/bri funds. A etfasrpdf get/EBRI date _ fund IB_12- typically rebalances its 60s All 5.0% 13.2% 19.0% 6.8% 3.7% 56.5% 9.4% File. ? e ne nd w 2015 contr. ibut Ove ions rall, bty he the av e praarg tic e ip aa cc nt oun (+t) , ba the lan e cm e p inc loy re ea rse (+ d) , ator a b cot om h;pound annual average growth rate of The cross-sec ational t the parEB ticip RaI/ ntICI s' cu401( rrent e k m ) pd loa ye ta rsb a ans de a arel s ne o t o sho f plaw n s loth ana s.t Ry et oire un mg en etr sp av ain rticip gs hea ld nts in pla ans nd atth pro ev sie ous w ith emps loho yert rs e or r tenures tend to broader EBRI/ICI 401(k) database, 10.2 percent had accounts with more than $200,000, and 9.1 percent had between 2010 through 2015—that leg waislatio s notn inc an lude d re dg in t ulatio he n pa rfe fv ec iou tins r g e em por plo t. ye The e be long nefitit udin plana s. l a Tn ha ely s EBRI is tra cDa ks ta the boo k on participant contrib ution EBRI s maintains an was 19 amongd th analy e moz re e s tha the mo n 600 st placomp ns surve rehen yed.si De ve loitt databa e Conse sulti of ng 401(k) LLP 201 -type 7 re prog portsram thats the in the Withdrawal activity among active DC plan participants Note: Data exclude ro plans lled > o c 5 vo etv ro ering in10 to IoRnly As o15.4% a ne re n part ot - in ic 3 c ipant 3 lu. d8 e.d. 24.1% 27.6% 14.4% 6.8% 123.2% 17.4% 201 EBRI’s website is easy to use and packe 1_No366_4015% %28k%29-Update.pdf. 5% d with useful information! Look for 5% portfolio to become less focused on growth and more focused on income as it approaches and passes the target date 13.9 percent from 2010 to 2015, to $143,436 at year-end 2015. Employee Benefits is a statistical referen 9% ce work on employee benefit programs and work $100,000 and $200,000. world. Its computer simulation analyses on Social Security reform and retirement income adequacy have lowe ar cc 401( ount k ) bb aala lannc ce es of s tha7.3 n tho ms ill e w ionho 40a1( re o k) ld pe lar n p or a ha rtv ic e ipa lon ng ts er w tho enuha res d. a Sc ec e H ount old s in t en et he al. y2017. ear-end 2010 average number of funds offered by the 160 401(k) plan sponsors surveyed was 19 in 2017. BrightScope and Investment is relatively rare. Typically, fewer than 5 percent of N/A = not available. >10 to 20 -8. 31% 7.0 17.1% 22.0% 9.6% 6.1% 79.6% 12.4% 9% ? total investment return on account bal10% ances (±), which depends on the performance of financial markets and of the fund, which is usually include fod rc in t e-rehe late fun d issu d’s na es. me. Non–target date balanced funds include asset allocation or these special features: 13% are unique. EBRI/ICI 401(k) database and each subsequent year through year-end 2015 (a five-year period). Company Institute > 2016 20 to 30 reports 4. an 0% average 12. of 8% 28 investm 18.0% ent options6. in 8% 2014, and 4.1% an averag53.9% e of 22 investm9. ent 0%options when active DC plan participants take any withdrawal in a 9 Holden, Sarah, Jack VanDerhei, Luis Alons20 o, and Steven Bass. 2016. “What Does Consistent Participation in 401(k) Among the consistent group, individual 401(k) participants experienced a wide range of outcomes, often influenced by ? on The the me a dlloc ian 401( ation o k)f p ala ssn eta s in cco unt an ind baiv laidua nce l’ for s a c consi coun st te ; nt and participants increased at a compound annual average Although, contribution amounts and contribution rates tend to increase w 18% ith age and income. See Figures A2 and A3 in Re hy Figur b flect rid ing fun esd t he s, in a ir highe ddition to li r averag fe est ay gle e a fun nd dts. enur Ce om , the pa ncyonsi stost ck e nt is e gq roup uity a in t lso ha he 40 d 1 m (e kd ) ia pln a n’ and s sponsor averag e ( ta he cc ount employ bae la r) n. ces >30 3.1% 9.9% 17.0% 4.2% 15 2.6% 41.6% 7.2% a target date fund suite is counted as a single investment option. given ye • a EBRI’s entire library of re r, with fewer than 2 percent tsearch publications starts at aking hardship withdrawals. D the m ata from ain W the E eB b page. Click on RI/ICI 401(k) datab EBRI ase indicate Plans Generate? Changes in 401(k) Account Balances, 2007–2014.” ICI Research Perspective 22, no. 5, and EBRI Contact EBRI Publications, (202) 659-0670; fax publication orders to (202) 775-6312 21 . the relationship among the three factors mentioned above: contributions, investment returns, and withdrawal or loan growth rate of 17.9 percent over the period, to $66,412 at year-end 2015. t Mone hat w ye fun re m ds c uch hig onsist he of r ttha hose n t he fun m ds d edia esi n a gne nd da tv o em raa gint e a acin count a sta b ba le la sh nca ers of e prtic he e. b St ro aa bd le e rv E alue BRI /I prC od I 24% uc 401 ts, suc (k) da h a tab s G ase IC(sFigur e 23% EBRI makes information freely available to all. Brady 2017 Allor data tab Alle l s in Inte 7.rna 1%l Revenu 18. e S 2% ervice, S 25.5% tatistics of Inc 11.3% ome 2016. 8.1% 91.3% 13.9% Figure 1, Consistent Sample Was Older Than Participants in the EBRI/ICI 401(k) Database at Year-End 2015 .............. 6 Subscriptions to EBRI Issue Briefs are included as part of EBRI membership, or as part of a that only ? w Issue Briefs it 18 hdra per w ca els nt (of -)and , 40 bor 1(r EBRI Notes k ow ) p ing lan p (-)a, ra tind c for our in-depth and ipa loa ntn r s in p epa la yn m s offe ents (+ ring ).loa nonpartisan pe ns had loans out riodicals. standing at year-end 2015$66,412 , with Issue Brief, no. 42 28% 6 (Septem 22 ber). Available at www.ici.org/pdf/per212-045.pdf and activity. Participants who were younger or had fewer years of tenure experienced the largest percent increases in Orders EBRI / assumes a public service responsibility to make its findings completely accessible at www.ebri.org 20 a 4) nd . Aot t y he e Sa r o r urce: s -teand b Tabulati le20 v2007 a 15 loue ns , t fr he fun om a d thv s, e e ErB a a RI/ICI gree 40 2008 r P earticipant-Directed 1( por k)t ep dla a n a s one cc ou Reti c 2009 nt a rement t ebgaor la Py n lan . cThe e Data of C ot the ohe llecti 2010 cronsi oc n aPtre st og ject. eor nty g is t rou he p 2011 w rea si s $14 dual for 3,43 ot 6, he a 2012 r lm inv ost e sd tm ouebnt les , 2013 2014 2015 Lifestyle funds maintain a predete$ rmine 199 ad n n riusakl lsu evbe sc l a rind pti og ne n toe ra EB llR y I uNo se tes wo a rd ns d s EB ucRI h aIss s “c ueo ns Briefs erva . tiv Chea,n ” g“mod e of A era ddtre e,ss ” : or EBRI, 10 $59,793 Sample of Consistent 401(k) Participants, 2010–2015 the youngest (8 percent of participants in their twenties) and oldest (13 percent of participants in their sixties) less At ww y ?eaw.ebr The N ro -e te: nd T ghe i.org r2015, ow analysis t/h in pdf 59 is /b a p bas criefs e crc oun ed eop nt n td a fo b/ samp f a Ela no BR n le nc I_IB – oefta s for 7.rg 3 _4 milli e t 26. co d on n aSept1 40 tsi e b 1s (k) ta e p la nt 6 lan nc .Consis p participants e ad rtfic un ipa t-Ks.pd d n a wit tss g s h e acc ftr. s e ow a unt tel y re a balances exc sse ume e at d e thd d e end to the b o e fg eac r inv ow h e year tsh r te d in fra otm e 20 e fo q 1 0 ruiti thr all p o eugh s ( as re tie cipants 7 23 average accou — nt ba so that all deci lance between sio year ns that -en relate to emp d 2010 and year- loyee end ben 2015. efits, For example, t whether made he aver in Cong age ac ress count or bo balanc ard room e of s or t Fi he gur ae v e2, rag Ce onsi acc st ount ent S ba am lap nle ce H of ad$7 Long 3,35 e7 a r Te mnur ong e p Th ara tic n P ipa ar nt tic s in t ipant he s in ent the $52,495 ire E EB BRI RI//IIC CII 40 401 1( (kk)) D da atta ab ba ase se.a tThe Yeam r-E end dia n such as real estate funds. The fina1 l c 10 a0t e1g 3or thy S , t. un NW know , Su nit , ec onsi 878, st W s of ashin fun gto dns t , DC, hat 2 c0 ould 005 -n 40 ot 51 b , e (2 ide 02) nt 6ifi 59e -d 06 . 70 ; fax number, “aggressive” in their name to indicate the fund’s risk level. Lifestyle funds generally are included in the non–target date 201 5. Age and tenure groups are based on participant age and tenure at year-end 201 5. The all category includes participants with missing tenure The • c hange Visit EBRI’s blog. in any individual participant’s 401(k) plan account balance is influenced by the magnitudes of these three Subscriptions More than three-tenths, or 7.3 million, of the 401(k) participants with accounts at the end of 2010 in the EBRI/ICI likely to in t hav he efamilies’ lo EB aRI ns/ ou ICI ho t s40 tm andi 1( es, kng ) are da tha tabased b n th ase. o se B on the highe ein t caus he eir of thi cr htst a ie nging squalit , for tsa ie y, s, or fif m most depe ples of 41% tiep s (F rov nda igu idebl rre s, p e 11 informatio la ). nIs, a n the nd n. d pa aEBRI’s Web tra tic ba ip se, ant as, c pah rta site inge cipa po s in nt’st s s Investment Company Institute, Quarterly Supplementary Data). The allocation to equities in target date funds varies with the 401(k) participants in their twenties (20 rose 2) 7499.2 percent 75-6312; e-ma (a 43. il: sub1 scrip perc tioent ns@ compou ebri.org nd an Mem nual av bershiperage Inforgrowth mation: rate) Inquiries 22% 22% 401(k) p inf la 2015 on a rmati c ................................ o cn. o unt Acco b unt al balances ance a m are ong participant ................................ the c acc onosi unt st e balances nt par held ticip i................................ n a 40 nt 1 s w (k) plans as $66 at the,41 participants' 2 at y ................................ e current ar-end empl 20 o15 yers , and alm ao rest net ........................ fou of plan r times the 6 Sources: Bloomberg, Barclays Globa$41,131 l Investments, Frank Russell Company, and Standard & Poor's balanced fund category. 4 factors relative to the starting account balance. For example, a contribution of a given dollar amount produces a larger Holden, Sarah, Jack VanDerhei, Luis Alonso, and Steven Bass. 2017. “401(k) Plan Asset Allocation, Account Balances, all research findings, publications, and news alerts. EBRI also extends its education and public service a 40 cc 1( ount k) d b at aa la bn ac se e is ar e re in t duche ed cin t onsi he st e y ree n ga ta rrd sa tin h m a gp t EBRI le the . These loa me n is mb c eo on rsh risi g ip ina st ae ntn d et /o d p , r a b cro ut tn ic tri ip re ba p unt a tiy o s ha m ns etnt o d EBRI a of ccto hunt -e ERF loa s a n in sth o the uld the e bnd ee ns dof irec uin e ted a gc h ye y to e a EBRI ra s r fr om a loc ans count . Retir b em ae la nn t sc ae vs for ings he t ld he in pla ent nsir ate p rd ea vio ta ub s a em se ploayr er es not o r ro la le dr e ov lia er b inlte o m IRA es a su a re r ne o t of inclhow uded. individual participants have fared. A funds’ target dates. For target date funds, investors were assumed to be in a fund whose target date was nearest to their between the 1 end of 2010 and the end of 2015 (Figures 5 and 6). Because younger participants’ account balances median account balanc 23% e of $16,732 for participants in the entire EBRI/ICI 401(k) database. $33,035 • EBRI’s reliable health and retirem All indexes are set to 100 in Deceembe nt surveys ar r 2006. e just a click away through the topic boxes at $29,156 role to improving Ameri Presid can ens’ t Ha finan rry Co cial naw kn ay owle at thdge e abothro ve ad ugh dressits a , (20w 2) ard 659--win 067ning 0; e-mp aubli il: co cn a se wa rvice y@ebcam ri.orgpaign growand Loa th rate n w Acti hen a vity in dded20 to 15.” a sm ICI Resear aller accoun ch tPerspectiv than it woul e 23, n d if aod. 6 de,d and to a E la BRI Issue rger one Brie . On f, no. the ot 436 her (August). Ava hand, investm ilable at ent 2010 through 2015; they make up a longitudinal sample, which removes the effect of participants and plans entering contribut consi es to sta ec nt c oun sam t p gle row is tne h. cessary to examine the growth in account balances experienced by individual 401(k) Figure 3, Distribution of 401(k) Plan Account Balances by Size of Account Balance ..................................................... 8 tende 65th 21 bd irthd to be s ay. All mo aller cation (Figu to e re quiti 5), t es in heirta contri rget dbutions ate fundprodu s is ascsed si umed to gnificant vary perc with ent invegro stor wath in ge. Th their e eq acc uity p ount balanc ortion was es. In 2 ® GICs are insurance company products that guarantee a specific rate of return on the invested capital over the life of the the top of the page. The ChoosetoSave S&P 500 indand ex mea the sco urmpanio es the p n esite rforman www.c ce hoo of 5set 00 osav stock e.o s c rg ho sen for market size, liquidity, and industry group representation. returns of a given percentage produce large $17,630 r dollar increases (or $18,433 decreases) when compounded on a larger asset base. www.ici.org/pdf/per232-063.pdf and www.ebri.org/pdf/briefspdf/EBRI_IB_436_K $18,127 -update.3Aug17.pdf. $17,686 $16,649 19% $16,732 and leaving the database. Initially, this group was demographically similar to the entire EBRI/ICI 401(k) database at plan participants over time. 401(k) plan account balances tended to increase with both age and tenure among the consistent group of participants, contrast, the average account balance of older participants, or those with longer tenures—both of which tended to have estim Ea dte itod ria us l3 B in og ard th : e Ha ind rryu Csotry nawa av ye , e ra dig to e e r an q duity p publise hrc er 24% .e A nt na y g ve iew fo s e r x the pressed ass iig nne thid ta s pub rlg ice at tio dn a te fu and thnd ose c oa f lc thula e aute thd us ors sh in ou g ldthe not Mo be arning scribes dt a tor contract. The Russell 2000 index measures the performance of the 2,000 smallest US companies (based on total market capitalization) included in the In other words, growth rates are a function of the relative size of the dollar adjustment to the size of the individual Figure 4, Consistent 401(k) Participants Accumulate Significant Account Balances ................................................................... 9 year- the end offi20 cer10 s, t. ruH stow ees, eme 19% vemb r, eb ry s, y ore o atr h-ee r nd spon 20 so15 rs o, f tthe he se Emp pla oy re tiec B ip ea nnt efis h t Rea se d a rg ch row Instn o itute lde , thre, E aB cR cr I ue Edd uc long ation e an rd j ob Rese ta ernur ch Fe us, a nd, ond r their Background Factors Influencing 401(k) Plan Assets as they do in the cross-sectional EBRI/ICI 401(k) database. Younger participants or those with shorter job tenures at larger balances at the beginning of the study period than younger workers or those with shorter tenures—showed more Lifecycle • Need a number? Allocation Indexes (see Check out the Morningstar 2015). EBRI Databook on Employee Benefits. EBRI is supported by organizations from all industries and sectors that appreciate the value of Internal Rev Reu nue sseService, ll 3000 ind Stati exsti (w cs of Inc hich trao cme. ks th 2e 016. 3,0 S 0O 0I Ta largx Stats: est U.S Ind . coivi mpa dua nl Info ies). rmation Return Form W-2 Statistics. staffs. Nothing herein is to be construed as an attempt to aid or hinder the adoption of 32% any pending legislation, regulation, or interpretative rule, or An acca ount lysis . of a consistent group of 401(k) participants highlights the impact of ongoing participation in 22 accumulated larger account balances compared with participants in the year-end 2015 cross section. Aggre the Othe ir cg ur ate rs re ta dat nbtle e a m v on aplue loy 40 fu er1(k nd s ts e ) nde inc plans lu dd t e provi o sha ynth vd ee e tic sm ins GICs aight i ller ,a nto th w cc hic ou h ne c t ob pos ns ala issn t ible c oe f s, w ainf po lue hil rtfo e nce o lito hose of f ea fix we ch o ho d-inc w f the e orme e factors old see cr uriti or th eha s at caus “w d long rappe e erdchan ”job with tges enur a in e s modest percent growth in account size (Figure 6). For example, the average account balance of 401(k) participants in 4 unbiased, reliable information on emplo as legal, accounting, actuarial, or other such professional advice. y wee b ww.ebenefits. ri.org Visit www.ebri.org/about/join/ 20% for more. Figur Avai e 5, labl 40e 1( For at: k)mer P ww lan ly w.i A tc h rs.gov/s c eou Ln eth man Btaati lan sti B ce cs/soi ro s A thm er -ta o sng U x-stats-i S C onsi Aggst n re e dg nt ivi a dual-i t40 e B 1( okn n )formatio d P Ianrd tie cipa x,n-retur tnt he s f B ra om nr-form-w2-stati c lay 20s 10 C Thr apit oug al sti U h 20 S cs A .15 g g ................... regate Bond 10 Ind ex is composed of securities covering 15% 11 401(k) plans. At year-end 2015, the average account balance among consistent participants was almost double the 2010 2011 8 2012 2013 2014 2015 12% For a description of the investment options, see page 17. tende • d to Instantly get e-m have higher accouant il noti balan? ccations of the latest EB es. For example, within the RI data, consistesurveys, publications, and m nt group, among 401(k) participa eetings nts with their si g account uarante xties i e balan (tyn pcreased 56. ces: contri ically by an buti in 5 spercent ura ons, investme nce c(a omp 9.4 perc any nt retur or ent a bn acompound s, an nk) to d w pro ithdr v annu ideawal beal a ne or loan fit verage gro paym activit entsw ath y c. In recent c rate) ordingbetween year to the years, contributi plan at-en boo dk 2010 a vons to alue. nd Altogether, from year-end 2010 through year-end 2015, the average 401(k) plan account balance among the group of Source: Tabulati gons ove from rnmen the EB t R a I/n IC d I P cao rtircp ipant-D orate ir ecte bod nd Rs eti,rem mor ent tg Pla an ge Da -b ta a Cc olk lee cti don se Prc oju ect. rities, and asset-backed securities (rebalanced monthly by market capitalization). The average account balance among all participants in the EBRI/ICI 401(k) database. The consistent group’s median EBRI Issue Brief is registered in the U.S. Patent and Trademark Office. ISSN: 0887 ?137X/90 0887 ?137X/90 $ .50+.50 9 1 m 401 The or(k) plans h e num thber aand sem n 10 to 20 of 401(k ave avera ) pi lan nars by clicking on the “Notify Me” or yparti earci g s of pants ed a bit te vari nur es more ef rom at y y tha ear ear tn o -e $ ynd ear 300 i20 n the billion 15 E, Bold RI /Ia ye C eIr 401(k par, a art )“RSS” buttons at the t idatabase. cn ipa d be nts t nefits Te he nd year-end epai d td o (in ha 2015 cludi ve E B highe op of our hom Rn I/g ICIrollove r 40 b 1(k ala ) database nc rs) have es tha erepresents page. avera n youn gg 26.1 ed er year-end 2015. Investment returns, rather than annual contributions, generally account for most of the change in Investment Compa Consisten ny Insti t Sample tute. Q in 2010 uarterl EBRI/ICI 4 y Suppl 01(k) Data ementa base in ry 201Data. 0 CWashi onsistent Sa ngton, mple in DC: 2015 Inves EBRI tment /ICI 401( Company k) Database Institute. in 2015 Figure 6, Changes in 401(k) Plan Account Balances Among Consistent 401(k) Participants from 2010 Through index's total return consists of price appreciation/depreciation plus income as a percentage of the original investment. consistent participants nearly doubled (increasing by 91.3 percent), rising from $74,983 at year-end 2010 to $143,436 12 23 million 401(k) plan participants. ba S la en e H ce ow ldaes a n alm nd ost Sc hra fousrs t2017 imes t . he median balance across all participants at year-end 2015. Some recordkeepers supplying data were unable to provide complete asset allocation detail on certain pooled asset classes participants: those in their thirties with more than 10 to 20 years of tenure had an average account balance of $83,948, 2 accounts w about $290i bil th lion larger (Fi ba gur lance e 8). Investment s. returns—interest, dividends, and realized and unrealized asset Participants 2015 include ................................ the 7.3 million 401(k) plan participants ................................ with account balances ................................ at the end of each year from ................................ 2010 through 2015. ...................... 11 at year-end 2015 (Figures 4, 5, and 6). This translates into a compound annual average growth rate of 13.9 percent Source: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection Project. N fo or te: oA ne ccount or mo balre ances of a the re par ir c tili cie pant ntsa . ccount The fina balances l EBR hel I/ICI d in 401(k 401( ) k p)lans dat aa t b the asparti e inc cipants' ludes c urrent only e pm la pn los y efo rs r and whic are h ne at t of lepa lan st l90 oans. pe Rrc etie rem nt ent of a savi ll p ngs lan © 2017, Employee Benefit Research Institute ?Education and Research Fund. All rights reserved. Investment Company Note: The EBRInstitute. 2017. I/ICI 401(k) database contains “The 23.4 US million Retirement 401(k) plan participants Market, at year-end Second 2010 and Quarter 26.1 million at y 2017” ear-end ( 2015. September Participant tenure ). Available is at appr comp eciation ared w/depreci ith an avation—v erage oary signi f $136,69 ficantl 8 for y from year to participants in year. their si For xtie exa s w m itple, o h mor ne n te ha t t n h10 ey ha to d 20 nearl yeay no im rs of tenu pact o re (Fi n gure There’s lots more! Yo oveu r n the ger fiv 4e 0-1 ye (k ar ) p pe arr iod tic. ip The ants m or ediath n a oc sc e w ount it h b sma alancll e er am yong ear - ten hisd c o 2ns 01 is0 te ba nt lg arn oup ces a exp lso gerien rew, m ced ore h tig ha h n d er oub percen ling t held in plans at previ tenure ous as eof the mploy year-end ers or rol indicated.T led over he iconsistent nto IRAs sample are not cons incl ists uded. of 7.3 th million 401(k) plan participants with account balances at the end of assets could be identified. 1100 13 Street NW · Suite 878 Investment returns, which vary with 401(k) plan account asset allocation, also influence the changes in participants’ www.ici.org/r each year from esearch/stat 2010 through s/ 2015. retireme Components nt/ret may not _16 add 7_ to 100 q1 percent . because of rounding. 5) Fig . ur Am e ong 7, A v ce orns ag is et e Ant ss e pta r Atlloc icipa atnt ion o s in t f 40 he1( ir si k)x tPie las a n A t cyceoun ar-e ts b nd y20 P15 art, ictipa hose nt w Ag ite h ................................ more than five to 10 y ......................... ears of tenure ha 12 d assets in 2011, but provided a significant boost as the stock market rose sharply from 2012 through 2014, before g frr om ow $2 th9,15 in a 6c in 20 coun10 t ba to lan $66 c,412 es co in 20 mpa15 red (a w co itm hp ol ound der a pnnu artiacl a ipv aen ra ts g or e grth ow ots h r e w ate it h of la 17 rg .9 er pe yrea cer nt -) en (Fi dg 2 ur 0e 1 0 4) . Washington, DC 20005 Visit EBRI online today: www.ebri.org accounts. Although asset allocation varied with age, and many participants held a range of investments, stock market moderatin a lower avg in 201 erage 40 5. 1( k) balance ($85,298) than those with more than 30 years of tenure ($321,086). (202) 659-0670 www.ebri.org 16 ebri.org Issue Brief • Oct. 24, 2017 • No. 439 ebri.org Issue Brief • Oct. 24, 2017 • No. 439 14 ebri.org Issue Brief • Oct. 24, 2017 • No. 439 15 www.choosetosave.org 12 ebri.org Issue Brief • Oct. 24, 2017 • No. 439 ebri.org ebIssue Bri ri.org Isse ufe • Oct. 24, 20 Brief • Oct. 2 17 • No. 439 4, 2017 • No. 439 e e e e e e ebri.org e e e A e ebri.org e ebri.org b b b b b b b b b b brr r r r r r r r r r re i. i. i. i. i. i. i. i. i. i. i.s o o o o o o o o o o oe r r r r r r r r r r rg g g g g g g g g g g a rIssue Bri Issue Bri Issue Bri IIIIIIIIIIIc s s s s s s s s s s sh s s s s s s s s s s s u u u u u u u u u u u re e e e e e e e e e e ep B B B B B B B B B B B or r r r r r r r r r rrief ief ief ief ief ief ief ief ief ief ief te e e ffffr • Oct. 24, 20 • Oct. 24, 20 • Oct. 24, 20 o• • • • • • • • • • •m O O O O O O O O O O O th c c c c c c c c c c ce ttttttttttt........... E 2 2 2 2 2 2 2 2 2 2 24 4 4 4 4 4 4 4 4 4 4 B,,,,,,,,,,,R 2 2 2 2 2 2 2 2 2 2 2I0 0 0 0 0 0 0 0 0 0 0 E 17 • No. 439 17 • No. 439 17 • No. 439 1 1 1 1 1 1 1 1 1 1 1d 7 7 7 7 7 7 7 7 7 7 7u • • • • • • • • • • •c a N N N N N N N N N N N tion o o o o o o o o o o o........... 4 4 4 4 4 4 4 4 4 4 4 a 3 3 3 3 3 3 3 3 3 3 3n 9 9 9 9 9 9 9 9 9 9 9d Research Fund © 2017 Employee Benefit Research Institute 11 10 18 13 4 21 5 2 17 8 19 7 20 3 9 6 ebri.org Issue Brief • Oct. 24, 2017 • No. 439 2 ebri.org Issue Brief • Oct. ebri.org Issue Brief • Oct. 24, 2017 • No. 439 24, 2017 • No. 439 Figure 7 Average Asset Allocation of 401(k) Plan Accounts by Participant Age Percentage of account balances, year-end 2010 and year-end 2015 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 26.5% 40.7% 8.3% 7.0% 2.1% 3.6% 8.8% 1.2% 2.0% 76.7% 30s 43.6% 21.6% 6.6% 8.2% 2.7% 4.4% 8.9% 2.1% 1.9% 75.4% 40s 49.6% 13.7% 5.6% 9.0% 3.0% 5.3% 9.5% 2.7% 1.7% 73.2% 50s 44.7% 11.3% 5.9% 10.4% 3.7% 8.6% 10.6% 3.1% 1.5% 65.5% 60s 38.2% 12.0% 6.1% 12.4% 5.3% 11.9% 9.1% 3.5% 1.4% 56.2% All Consistent 5 Sample 44.0% 12.7% 5.9% 10.5% 4.0% 8.5% 9.8% 3.1% 1.5% 65.2% 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 2015 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 31.6% 42.5% 6.8% 4.6% 1.3% 2.1% 6.4% 3.6% 1.1% 80.4% 30s 45.2% 26.6% 4.9% 5.9% 2.1% 3.0% 6.9% 4.1% 1.3% 78.7% 40s 50.7% 17.3% 5.0% 6.7% 2.6% 4.0% 7.7% 4.5% 1.4% 75.1% 50s 45.4% 15.0% 5.6% 8.4% 3.5% 7.4% 8.1% 5.5% 1.3% 65.8% 60s 39.1% 15.2% 5.9% 10.0% 4.7% 11.1% 6.8% 5.8% 1.3% 56.5% All Consistent 5 Sample 45.3% 16.7% 5.5% 8.1% 3.4% 6.9% 7.6% 5.2% 1.4% 67.3% EBRI/ICI 401(k) 7 Database 43.1% 19.8% 5.7% 8.1% 3.9% 6.1% 6.5% 5.3% 1.6% 66.4% 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 7.3 million 401(k) plan participants with account balances at the end of each year from 2010 through 2015. 6 The year-end 2010 EBRI/ICI 401(k) database represents 23.4 million 401(k) plan participants. 7 The year-end 2015 EBRI/ICI 401(k) database represents 26.1 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 2015. Row percentages may not add to 100 percent because of rounding. Percentages are dollar-weighted averages.