Latest Update from the EBRI/ICI 401(k) Database

After a decade marked by two severe bear markets, 401(k) plan participants have adopted a more balanced approach to their portfolios, according to a report released today by the Investment Company Institute (ICI) and the Employee Benefit Research Institute (EBRI). Fears that younger participants in 401(k) plans would abandon stock investing are not borne out by the data, which suggest that greater use of target-date funds is helping workers keep their investing on track.

The shares of 401(k) participants who had either no equities at all or high concentrations of equities were lower in 2010 than in 2000 for almost every age group, according to the EBRI/ICI report, 401(k) Plan Asset Allocation, Account Balances, and Loan Activity in 2010. Among all 401(k) plan participants in 2000, 12.7 percent held no equity investments (either in equity funds, the equity portion of balanced funds, or company stock), while 54.1 percent had more than 80 percent of their plan accounts allocated to equities.

In the current study’s sample of more than 23 million participants, 401(k) participants had moderated their account allocations to equities: 11.8 percent of account holders had no allocation to stocks, while the share of participants with more than 80 percent of their balances invested in stocks dropped to 40.0 percent.

The press release is online here.

The full report is available online, published simultaneioulsy in the December issues of the EBRI Issue Brief and ICI Research Perspective.

News coverage:

Bloomberg, More younger U.S. workers saving for retirement have a higher allocation to stocks than a decade ago

Plan Sponsor, Greater Use of Target-Date Funds Keeping Workers’ Investing on Track

Financial Advisor, 401(k) Portfolios Becoming More Balanced

About ebriorg
President and CEO, EBRI

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