The first-quarter balance also represents a 62% increase since the end of the first-quarter 2009, often considered the low of the 2008-09 market downturn, when the average balance was $46,200. Fidelity’s 401(k) savings analysis is based on its participant base of 11.8 million accounts.
Strong stock market performance in the first quarter accounted for approximately 80% of the account balance growth with the other 20% attributed to both participant and employer contributions.
Fidelity also found the number of participants taking advantage of annual increase programs (AIP) increased nearly ninefold over the past five years. AIP programs are an employer plan design option that automatically increases contribution rates by participating employees, typically by 1% per year. Of Fidelity 401(k) plans, 76% offer this program.
During the first quarter, nearly 10% of Fidelity 401(k) participants increased their contribution rate versus less than 4% who decreased it. Of those participants in plans offering automatic AIP, 16% increased their contribution rate.
In 2011, 20% more participants attended workplace workshops and 45% more used online webinars compared with 2010. Also, approximately two thirds of 401(k) participants accessed their account through NetBenefits, Fidelity’s participant portal, either online or through the company’s smartphone app.