DC Participants Show Stronger Commitment to Saving
Newly released data on almost 24 million defined contribution (DC) retirement accounts shows stronger contribution activity and declining levels of participant-initiated withdrawals and changes in asset allocations in the first quarter of 2010.
An Investment Company Institute (ICI) report said fewer participants stopped making contributions in the first quarter of 2010. Only 1.1% of DC plan participants stopped contributing in the first quarter of 2010, compared with 2.7% in the same quarter of 2009.
Only 1.2% of DC plan participants took withdrawals in the first quarter of 2010, compared with 2.7% in the first quarter of 2009. The share of workers taking hardship withdrawals dropped as well, to 0.4% from 1.2%.
Loan activity edged up but remained in line with historical numbers, according to ICI. As of March 2010, 17% of DC plan participants had loans outstanding, compared with 16.5% of loans outstanding at year-end 2009.
Most DC plan participants stayed the course with asset allocations during the first quarter of 2010. Four percent of DC plan participants changed the asset allocation of their account balances, and 4.5% changed the asset allocation of their contributions.
“DC plans are central to many Americans’ retirement security, so it’s significant that workers have kept saving despite the market turmoil of the past two years,” said Sarah Holden, senior director of retirement and investor research, in a news release.
The report, Defined Contribution Plan Participants’ Activities, is here.