Plan participants are, by and large, continuing to save for retirement, with hardship withdrawals holding steady and allocations staying pretty much the same.
Those are some of the findings from the Investment Company Institute’s research report “Defined Contribution Plan Participants’ Activities, 2014,” which found that most people in a DC plan are continuing to contribute. Just 2.9 percent stopped doing so during 2014; that’s up just a bit from 2013’s 2.7 percent.
DC plan assets make up 28 percent of all retirement assets, the report said, totaling $6.8 trillion out of a total $24.7 trillion asset pool that includes not just DC plans but annuities, IRAs, and public and private defined benefit plans. Those DC assets also accounted for about a tenth of households’ aggregate financial assets as of the end of 2014. In 2013, DC plans totaled $6.3 trillion.
Just a few more people (3.6 percent) made withdrawals from their DC plans in 2014 than did so in 2013 (3.5 percent), while the same percentage—1.7 percent—had to resort to hardship withdrawals in both years.
With stocks generally up for the year—the S&P 500 total return index was up 13.7 percent for 2014—asset allocations were unchanged for the great majority of participants. Just 10.5 percent changed the allocations of their account balances, and 6.6 percent changed the allocations of contributions.
In 2013, when the S&P 500 total return index was considerably higher for the year at 32.4 percent, just slightly more people changed allocations, with 10.7 percent making changes to their account balances. A greater percentage changed the allocation of their contributions in 2013 (7.4 percent) than did so in 2014 (6.6 percent).
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