The vast majority of defined contribution plan participants continued to sock away money for their retirement in the first quarter of the year, according to the latest quarterly report from the Investment Company Institute.
Just 1% of the plan participants surveyed stopped contributing to their DC plan accounts, unchanged from the year-ago quarter. Also unchanged: the percentage of participants who took withdrawals. In the first quarter, 1.2% took withdrawals, with 0.4% taking hardship withdrawals.
Most DC plan participants stayed the course with their asset allocations as stock values rose in the first quarter, the study found. During the first three months of 2012, 4.0% of DC plan participants changed the asset allocation of their account balances and 4.2% changed the asset allocation of their contributions. These levels of reallocation activity were similar to the activity observed in the year-ago quarter.
Fewer participants (17.9%) reported having outstanding loans, down slightly from 18% a year earlier. While their loan activity edged down slightly, it continues to remain elevated compared with four years ago. At the end of 2008, 15.3% had outstanding loans, according to ICI data.
At the end of the first quarter, assets in defined contribution plans totaled $4.9 trillion, or 25% of the total retirement market and almost one-tenth of U.S. households’ aggregate financial assets.
ICI has been tracking participant plan activity through recordkeeper surveys since 2008. This latest quarterly report updates results from ICI’s survey of recordkeeping firms covering more than 24 million employer-based DC retirement plan participant accounts as of March 2012.