DC Investor Behaviors Steady in 2013

According to a report from the Investment Company Institute (ICI), during the first three quarters of 2013, 9.2% of DC plan participants changed the asset allocation of their account balances and 6.8% changed the asset allocation of their contributions. These levels of reallocation activity were similar to the reallocation activity observed in the same time frame a year earlier, the ICI says.

Contribution activity was similar as well. Only 2.5% of DC plan participants stopped contributing in the first three quarters of 2013, compared with 2.1% during the first three quarters of 2012 and 2.2% during the first three quarters of 2011.

In the first three quarters of 2013, 3.0% of DC plan participants took withdrawals, similar to the pace observed over the first three quarters of 2012. Levels of hardship withdrawal activity also remained low. Only 1.4% of DC plan participants took hardship withdrawals during the first three quarters of 2013, the same share as in the first three quarters of 2012.

However, the ICI’s data analysis did find an uptick in loan activity. At the end of September 2013, 18.3% of DC plan participants had loans outstanding, compared with 18.2% at year-end 2012 and 15.3% at year-end 2008.

To measure participant-directed changes in DC plans, the ICI has been tracking participant activity through recordkeeper surveys since 2008. This report updates results from the ICI’s survey of a cross section of recordkeeping firms representing a broad range of DC plans and covering about 24 million employer-based DC retirement plan participant accounts as of September 2013.

The ICI report is here.