ICI Retirement Recordkeeper Data Show Americans’ Continued Commitment to Saving

Washington, DC, July 31, 2013 - ICI’s latest study of retirement plan savers’ actions, based on defined contribution (DC) plan recordkeeper data covering about 24 million DC plan participant accounts, shows Americans’ continuing commitment to putting away money for retirement.

The study, Defined Contribution Plan Participants’ Activities, First Quarter 2013, includes data from January through March 2013. 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 2013.

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 2013. Findings include:

• Commitment to contribution activity in the first quarter of 2013 continued at the high rate observed in the first quarter of 2012. Only 1.0 percent of DC plan participants stopped contributing in the first quarter, the same as in the first quarter of 2012.
• DC plan withdrawals in the first quarter 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 2013, compared with 1.2 percent during the first quarter of 2012. Only 0.4 percent took hardship withdrawals during the first quarter of 2013, the same share as the first quarter of 2012.
• Loan activity edged down slightly by March 2013, although it continues to remain elevated compared with five years ago. The data show that at the end of March 2013, 17.9 percent of DC plan participants had loans outstanding, compared with 18.2 percent at year-end 2012, and 15.3 percent at year-end 2008.
• As stock values generally rose during the first three months of the year, most DC plan participants stayed the course in their asset allocations. In the first quarter of 2013, 4.8 percent of DC plan participants changed the asset allocation of their account balances and 4.8 percent changed the asset allocation of their contributions—similar reallocation levels as observed in the first quarter of 2012.

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.