ICI Recordkeeper Data Show Retirement Plan Participants Tend to Stay the Course

Washington, DC, April 29, 2015—ICI’s latest study of retirement plan savers’ actions shows Americans’ continuing commitment to saving for retirement. The study, “Defined Contribution Plan Participants’ Activities, 2014,” demonstrates that participants continued to save in their defined contribution (DC) retirement plans at work during 2014.

The study includes data from January through December 2014 and is based on DC plan recordkeeper data covering more than 25 million participant accounts at employer-based DC plans. Findings include:

• Defined contribution (DC) plan withdrawal activity in 2014 remained low and was similar to the prior year’s activity. In 2014, 3.6 percent of DC plan participants took withdrawals, compared with 3.5 percent in 2013. Levels of hardship withdrawal activity also remained low. Only 1.7 percent of DC plan participants took hardship withdrawals during 2014, the same share as in 2013.
• The vast majority of DC plan participants continued contributing to their plans in 2014. In 2014, 2.9 percent of DC plan participants stopped contributing, compared with 2.7 percent during 2013.
• Most DC plan participants stayed the course with their asset allocations as stock values generally rose throughout the year. In 2014, 10.5 percent of DC plan participants changed the asset allocation of their account balances and 6.6 percent changed the asset allocation of their contributions. These levels of reallocation activity were slightly lower than the reallocation activity observed in the same time frame a year earlier.
• Although, fewer than one in five DC plan participants has loans outstanding, DC plan participants’ loan activity remains elevated compared with six years ago. This pattern of activity also was observed in the wake of the bear market and recession earlier in the decade. At the end of December 2014, 17.9 percent of DC plan participants had loans outstanding, compared with 18.2 percent at year-end 2013 and 15.3 percent at year-end 2008.

DC plans are an important component of Americans’ retirement saving; assets in all DC plans represented more than one-quarter of assets in the total retirement market and accounted for one-tenth of U.S. households’ aggregate financial assets at year-end 2014.

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.