ICI Defined Contribution Plan Recordkeeper Data Show Continued Commitment to Retirement Saving

Washington, DC, April 25, 2013 - ICI’s latest study of retirement plan savers’ actions, based on defined contribution (DC) plan recordkeeper data covering nearly 24 million DC plan participant accounts, shows Americans’ continuing commitment to putting away money for retirement.

The quarterly study, Defined Contribution Plan Participants’ Activities, 2012, includes data through year-end 2012. Assets in all DC plans represented more than one-quarter of assets in the total retirement market and accounted for almost one-tenth of U.S. households’ aggregate financial assets at the end of 2012.

DC Plan Participants Continued to Save, Withdrawal Activity Remained Low

The study finds that participants continued to save in their retirement plans at work in 2012. Findings include:

• Commitment to contribution activity in 2012 continued at a slightly higher rate than observed in 2011. Only 2.6 percent of DC plan participants stopped contributing in 2012, compared with 2.8 percent in 2011.
• DC plan withdrawals in 2012 remained low and were in line with the prior year’s activity; participants generally did not tap their accounts. Only 3.4 percent of DC plan participants took withdrawals in 2012, as was the case in 2011. Only 1.7 percent took hardship withdrawals during 2012, the same pace as in 2011.
• Loan activity edged down slightly in 2012, although it continues to remain elevated compared with four years ago. The data found that at the end of December 2012, 18.2 percent of DC plan participants had loans outstanding, compared with 18.5 percent at year-end 2011, and 18.2 percent at year-end 2010.
• As stock values generally rose throughout the year, most DC plan participants stayed the course in their asset allocations. In 2012, 9.7 percent of DC plan participants changed the asset allocation of their account balances and 6.6 percent changed the asset allocation of their contributions—similar reallocation levels as observed in 2011.

ICI has been tracking participant activity through recordkeeper surveys since 2008. This update reports results from ICI’s survey of a cross section of recordkeeping firms representing a broad range of DC plans. Please visit ICI’s 401(k) resource page for more information.