EBRI Issue Brief
401(k) Plan Asset Allocation, Account Balances, and Loan Activity in 1999
The Employee Benefit Research Institute
(EBRI) and the Investment Company Institute (ICI) have been
collaborating for the past four years to collect data on
participants in 401(k) plans. This effort, known as the EBRI/ICI
Participant-Directed Retirement Plan Data Collection Project, has
obtained data for 401(k) plan participants from certain of EBRI
and ICI members serving as plan record keepers and
The EBRI/ICI database is large and
representative of the 401(k) plan participant universe, as it
pulls data from a variety of plan record keepers and
administrators and covers a wide range of plan sizes. This report
includes 1999 information on 10.3 million active participants in
32,674 plans with $573.4 billion in assets. The 1999 EBRI/ICI
database accounts for 11 percent of all 401(k) plans, 26 percent
of all 401(k) participants, and about 35 percent of the assets
held in 401(k) plans. Key findings include:
- For all 401(k) participants in the
1999 EBRI/ICI database, three-quarters of plan balances
are invested directly or indirectly in equity securities.
Specifically, 53 percent of plan balances are invested in
equity funds, 19 per-cent in company stock, 10 percent in
guaranteed investment contracts (GICs), 7 percent in
balanced funds, 5 percent in bond funds, 4 percent in
money funds, and 1 percent in other stable value funds.
- The average account balance (net of
plan loans) for all participants was $55,502 at year-end
1999, which is 18 percent higher than the average account
balance at year-end 1998. The median account balance was
$15,246 at year-end 1999, which is 17 percent higher than
the median account balance at year-end 1998. The reported
account balance represents retirement assets in the
401(k) plan at the participant's current employer.
Retirement savings held in plans at previous employers or
rolled over into individual retirement accounts (IRAs)
are not included in this analysis.
- Investment options offered by plan
sponsors influence participants' asset allocation.
Participants in plans not offering GICs or company stock
tend to have the highest allocations to equity funds.
Participants in plans offering GICs but not company stock
have lower allocations to bond, money, and equity funds.
Alternatively, participants in plans offering company
stock (but not GICs) have substantially lower allocations
to all other investment options, especially equity funds.
- The asset allocation of
participants' account balances varies with age. Younger
participants tend to concentrate their assets in equity
fund investments, while older participants invest more in