Fidelity Data Show Engaged Plan Participants

Fidelity found workplace retirement plan participants are becoming increasingly more engaged in their plans.

In 2010, approximately three out of four active participants contacted Fidelity via the phone or over the Web. And more than 1.1 million participants took advantage of Fidelity’s online guidance tools, the company reported today. 

Of those who used the savings tools, nearly half (47%) increased contributions to their 401(k)s by an average of three percentage points (from 4% to 7%). When employees sought Fidelity’s guidance with their investment strategy, one in five made adjustments to their portfolio from suggestions based on their age and target retirement date.  

The average 401(k) account balance rose to $71,500 at the end of 2010, reaching a 10-year high, since Fidelity began tracking the data based on its participant base of 11 million 401(k) accounts. For participants who were continuously active for the past 10 years, their average balance increased to $183,100 at the end of last year from $59,100 at the end of the fourth quarter 2000, the announcement said.  

Average participant deferrals remained at 8.2% for an eighth straight quarter. For a seventh straight quarter, more participants increased their total deferral rate than decreased (6.1% vs. 3%, respectively).  

According to the Fidelity data, nearly four out of five participants have rejected the urge to take out a loan. Seven out of 10 participants opt not to cash out of their 401(k)s in the months following a separation from an employer, instead electing to stay in-plan or roll over into another qualified retirement account such as an IRA.  

More than twice as many active participants in their 20s contribute to Roth 401(k)s than do those aged 50 and older (9% vs. 4%, respectively). Approximately half of Roth 401(k) contributors earn less than $75,000, and one in four earns less than $50,000.   

One out of five Fidelity plan sponsors offers eligible employees a Roth 401(k). Fidelity’s largest plans (more than 250,000 participants) have adopted at the greatest rate, with half offering the feature.


Match is Back for Majority  

Only 8% of Fidelity client plan sponsors reduced or eliminated their employer contributions during the height of recession in 2008 and 2009. Since then, more than half (55%) have already or indicated they plan to reinstate this benefit within the next 12 months.  

Larger companies (5,000+ employees) are at the forefront of this trend with 71% having already reinstated or planning to reinstate their employer contribution.  

Overall, 80% of active participants within corporate defined contribution plans recordkept by Fidelity received employer contributions in 2010.