ICI examined 401(k) participants’ withdrawal and contribution actions in the study, Defined Contribution Plan Participants’ Activities, First Half 2011. It found that a commitment to contribution activity in the first half of 2011 continued at the high rate, as was the case in the first half of 2010. Only 1.6% of DC plan participants stopped contributing in the first half of 2011, compared with 1.7% in the same period in 2010.
DC plan withdrawal activity during the first half of 2011 was in line with the prior year’s first half activity; participants generally did not make withdrawals. Just over two percent of DC plan participants took withdrawals in the first half of 2011, which was the same in the first half of 2010. Only 1.1% took hardship withdrawals, compared to 0.9% in the first half of 2010.
Loan activity edged up slightly by the end of June 2011, a pattern of activity that also was observed in the wake of the bear market and recession earlier in the decade. The data found that at the end of June 2011, 18.3% of DC plan participants had loans outstanding, compared with 18.2% at year-end 2010.
Most DC plan participants stayed the course in their asset allocations in the first half of 2011, despite fluctuating levels of stock values. In the first half of 2011, 6.4% of DC plan participants changed the asset allocation of their account balances and 6% changed the asset allocation of their contributions.
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. Visit ICI’s 401(k) resource page for more information.