Can’t stop, won’t stop. The vast majority of defined contribution (DC) plan participants are habitually contributing to their retirement savings without interruption, according to the Investment Company Institute (ICI).
A recent ICI report, titled “Defined Contribution Plan Participants’ Activities, First Three Quarters of 2017,” revealed only 2.4 percent of participants stopped contributing to DC plans between January and September of last year.
The study was based on recordkeeper data representing over 30 million participant accounts in employer-sponsored DC plans, and tracked retirement savers’ contributions, withdrawals, asset allocation and loan activity.
Other key findings from Q1 to Q3 of 2017:
Withdrawal activity for DC plans remained low. Just 2.8 percent of DC plan participants took withdrawals—the same rate as during the first three quarters of 2016.
Levels of hardship withdrawal activity also were low. Only 1.3 percent of DC plan participants took hardship withdrawals, compared to 1.2 percent during the same period in 2016.
DC plan participants are holding steady in terms of asset allocations, as well. Amidst rising stock values during the first nine months of last year, “account balance reallocation activity was little changed, and contribution reallocation activity was slightly lower than observed during the first three quarters of 2016.”
The data indicates 8 percent of DC plan participants changed the asset allocation of savings account balances. A little under 5 percent changed the asset allocation of savings contributions, down from 5.6 percent the year before.
Keeping on-trend, little changed from 2016 to 2017 in terms of loan activity either. As of September 2017, 16.7 percent of DC plan participants had loans outstanding; in 2016, this figure was 17 percent.
DC plan assets represent 28 percent of the $8.9 trillion in total U.S. retirement assets, and “the distribution of assets has favored DC plans…on a year-over-year basis since 2007,” ICI data shows.
Jessa Claeys is a writer, editor and graphic designer.
