ICI Recordkeeper Data Show Retirement Plan Participants’ Commitment to Saving

Washington, DC, August 6, 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, First Quarter 2015,” includes data from January through March 2015 and is based on defined contribution (DC) plan recordkeeper data covering more than 26 million participant accounts at employer-based DC plans.

DC Plan Participants Continued to Save; Withdrawal Activity Remained Low

The study demonstrates that participants continued to save in their DC retirement plans at work during the first quarter of 2015. Findings include:

• The vast majority of DC plan participants continued contributing to their plans in the first quarter of 2015. Only 1.0 percent of DC plan participants stopped contributing in the first quarter of 2015, the same pace as in the first quarter of 2014.
• Participants generally did not tap their accounts—DC plan withdrawals in the first quarter of 2015 remained low and were in line with the prior year’s first quarter activity. Only 1.3 percent of DC plan participants took withdrawals in the first quarter of 2015, the same share as in the first quarter of 2014. Only 0.4 percent took hardship withdrawals during the first quarter of 2015, compared with 0.5 percent during the first quarter of 2014.
• Loan activity edged down in the first quarter of 2015, following a seasonal pattern observed over the past several years. The first quarter of the year tends to have lower percentages of DC plan participants with loans outstanding compared with later quarters. The data show that at the end of March 2015, 17.4 percent of DC plan participants had loans outstanding, compared with 17.9 percent at year-end 2014. Loan activity tends to ease back a bit in the first quarter of each year.
• As stock values edged up during the first three months of the year, most DC plan participants stayed the course in their asset allocations. In the first quarter of 2015, 4.3 percent of DC plan participants changed the asset allocation of their account balances and 4.2 percent changed the asset allocation of their contributions. These levels of reallocation activity are in line with the activity observed in the same time frame a year earlier.

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 almost one-tenth of U.S. households’ aggregate financial assets at the end of the first quarter of 2015.

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.­