December 21, 2011
--- 401(k) plan participants have adopted a more balanced approach to their portfolios, according to ICI and EBRI. ---
According to a report released by the Investment Company Institute (ICI) and the Employee Benefit Research Institute (EBRI), fears that younger participants in 401(k) plans would abandon stock investing are not coming to fruition, which suggests that greater use of target-date funds is helping them stay on track.
The report, “401(k) Plan Asset Allocation, Account Balances and Loan Activity in 2010,” found shares of 401(k) participants who had either no equities at all or high concentrations of equities were lower in 2010 than in 2000 for almost every age group.
Among all 401(k) plan participants in 2000, 12.7% held no equity investments (either in equity funds, the equity portion of balanced funds or company stock), while 54.1% had more than 80% of their plan accounts allocated to equities. In the current study’s sample of more than 23 million participants, 401(k) participants had moderated their account allocations to equities: 11.8% of account holders had no allocation to stocks, while the share of participants with more than 80% of their balances invested in stocks dropped to 40% percent.