Participant Demographics Vary by Plan Type

Participant demographics and behavior vary by plan type, an analysis shows.

According to a report from the ING Retirement Research Institute, overall, defined contribution (DC) participant balances rose 10% from year-end 2010 to 2012. Participants in large private sector plans have consistently higher balances than in other types plans, followed by participants in higher education plans. Governmental (state and local) plan account balances are generally lowest.

Differences between plan sponsor types begin to widen for participants in their late 20s, and widen markedly with age progression. At very early ages, there is little substantive difference in account values across employer types—and private employer plan balances are lower than both K-12 and higher education up to age 25.

Balances for most types of employer plan accounts continue to rise through participants’ 60s—with the exception of government participants. Governmental balances begin to decline after age 65. By age 50, in 2012, participant balances in large private employer DC plans were nearly $100,000, and only half that for participants in small-mid private and higher education plans.

Account balances for higher education plan participants in their 60s and older reached or exceeded the $100,000 mark by 2012, while those in K-12, healthcare and government plans did not. In 2012, balances for older (age 65+) participants in small-mid private employers’ plans topped $100,000. After age 50, participants in plans for larger private employers exceeded $100,000 in average account balance, and reached or exceeded the $200,000 mark, in 2012, for those ages 70 and older.

The analysis also found across plan sponsor types, there is a gender gap in retirement savings: Men have higher account balances than women. The gender gap is highest in health care employers’ plans and lowest in K-12 employers’ plans.

Women are more likely (than men) to take a hardship withdrawal; men are more likely (than women) to take a loan. Both loans and hardship withdrawals are most common in larger private employer plans, and least common in higher education plans. Generally, loans are much more common than hardship withdrawals. This could, to some degree, be a result of plan design decisions at the plan sponsor level about whether to offer certain features, the report said. Participants in the “accumulation” phase of their DC experience, younger than age 50, are most likely to take both loans and hardship withdrawals.

K-12 employers’ plans have the “oldest” participants (average age 52.0 in 2012), while small-mid private employer plans have the “youngest” participants (average age 45.6 in 2012). More than half of higher education plan participants average age 50 and older. The average ages of healthcare and government employer plan participants are equally split between participants younger than and older than age 50.

The report said average age is trending higher in all employer types, most dramatically in governmental plans. The upward trend suggests more older participants may be remaining in plans, and the workforce, than younger workers are entering/joining. Nearly two-thirds of the K-12 participant base is older than age 50; nearly the same percentage of the small-mid private participant base is younger than age 50.

Health care and K-12 plan participants are overwhelmingly female (76% and 74%, respectively). Small to mid-sized private plan participants are strongly male (66%). Government (45% men, 55% women), higher education (47%, 53%) and large private employers (53%, 47%) are more evenly divided.

All data in the report, “Retirement in Review: A Look at 2012 Defined Contribution Participant Experience,” unless otherwise indicated, represent ING-proprietary data analyzed by ING’s Business Intelligence Competency Center (BICC) and are as of December 31, 2010, 2011, and 2012. The report is based on the BICC’s analysis of approximately 5.1 million participants and 47,000 DC plans (401(k), Profit Sharing, 403(b) and 457).

Copies of the report can be downloaded by going to the ING Retirement Research Institute website,, and selecting “Publications.”