ICI Retirement Recordkeeper Data Show Americans’ Continued Commitment to Saving

Washington, DC, August 12, 2014—ICI’s latest study of retirement plan savers’ actions, based on defined contribution (DC) plan recordkeeper data covering nearly 24 million employer-based DC plan participant accounts, shows Americans’ continuing commitment to putting away money for retirement.

The study, “Defined Contribution Plan Participants’ Activities, First Quarter 2014,” includes data from January through March 2014. 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 the first quarter of 2014.

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 the first quarter of 2014. Findings include:

• The vast majority of DC plan participants continued contributing to their plans in the first quarter of 2014. Only 1.0 percent of DC plan participants stopped contributing, the same pace as the first quarter of 2013. 
• DC plan withdrawals in the first quarter of 2014 remained low and were in line with the prior year’s activity; participants generally did not tap their accounts. Only 1.3 percent of DC plan participants took withdrawals in the first quarter of 2014, as was the case in the first quarter of 2013. Only 0.5 percent took hardship withdrawals during the first quarter of 2014, compared with 0.4 percent during the first quarter of 2013.
• Loan activity moved down by the end of March 2014, although it continues to remain elevated compared with six years ago. The data show that at the end of March 2014, 17.7 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. 
• As stock values edged up a bit throughout the first three months of the year, most DC plan participants stayed the course in their asset allocations. In the first quarter of 2014, 4.3 percent of DC plan participants changed the asset allocation of their account balances and 3.8 percent changed the asset allocation of their contributions—slightly lower than the reallocation activity observed in the first quarter of 2013.

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.