According to a recent report release by the Investment Company Institute (ICI), participation in defined contribution plans (e.g., full-time employer 401k plans and owner-only solo 401k plans) remains strong. The study tracks contributions, withdrawals, and other activity, based on DC plan record keeper data covering more than 30 million participant accounts in employer-based DC plans.
Here are some of the findings:
- Most DC plan participants stayed the course in their asset allocations. In the first quarter of 2019, 4.2 percent of DC plan participants changed the asset allocation of their account balances, down from 5.1 percent in the first quarter of 2018. Meanwhile, 2.9 percent of participants changed the asset allocation of their contributions in the first quarter of 2019, down from 3.5 percent in first quarter of 2018.
- Withdrawal activity for DC plans remained low in the first quarter of 2019 and was similar to the prior year. In the first quarter of 2019, 1.4 percent of DC plan participants took withdrawals, similar to the share in the first quarter of 2018. Levels of hardship withdrawal activity also were low, with only 0.5 percent of DC plan participants taking hardship withdrawals during the first quarter of 2019, the same share as in the first quarter of 2018.
- DC plan participants’ loan activity edged down in the first quarter of 2019, following a seasonal pattern observed over the past several years. At the end of March 2019, 15.9 percent of DC plan participants had loans outstanding, compared with 16.7 percent at the end of 2018.
