This morning I looked at a few early filers in the small 401(k) market to get some idea of what to expect when the bulk of 2010 filings becomes available later this year. Of the hundreds of thousands of 401(k)s expected to file, 5,754 of them decided to make the rest of you look bad by sending in their filings early.
These plans held a little more than $8 billion in combined assets at the end of 2010, which was a 13.4 percent jump over 2009, and a 50 percent jump over 2008.
Compare this to the S&P 500, which for the same time period was up 12.7 percent over 2009 and 39 percent over 2008.
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What do these numbers mean? First, keep in mind that overall 401(k) returns tend to track pretty well with the S&P, but since we're talking assets rather than straight investment returns, what we can infer from this is that participants are still contributing to their plans, but they're contributing much less.
In fact, for the same set of plans, the median income from participant contributions dropped almost 6 percent from $46,600 to $44,000.
Falling participation and contribution rates are scary. That means less money to invest and less money for you to earn commissions. You can't control the market, but you can control how you sell the advantages of squirreling away retirement funds to your clients. What are some ways you can get your clients to increase participation in these belt-tightening times?
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