In the first half of 2015, 17.5 percent of defined contribution participants had outstanding loans from their savings plan, a rate comparable to the previous year, but high compared to historical norms, according to the Investment Company Institute.
Seven years ago, at the end of 2008, 15.3 percent of plan participants had outstanding loans.
The ICI's review of recordkeepers' data shows loan activity started to creep up in conjunction with the financial crisis. By the end of 2011, 18.5 percent of participants held outstanding loans.
Overall, 2.2 percent of participants withdrew from their accounts in the first half of 2015, a proportion that has remained relatively flat since the first half of 2009.
Hardship withdrawals stood at 0.9 percent in the first half of 2015, a rate that has also been flat since 2009.
The vast majority of participants are continuing to contribute to their plans. Only 1.8 percent of participants stopped contributing to accounts in the first half of 2015, compared to 2.1 percent the first half of 2014. In the first half of 2009, 4.6 percent of participants stopped contributing to plans, a direct result of the financial crisis.
The ICI report speculates that in some cases participants stop contributing to plans because they reach their annual contribution limit early in the year.
Investment activity, which tracks how often participants reallocate their accounts, has been relatively in-line for the seven-year period beginning in 2009.
About 6.6 percent of participants changed allocation for the first half of 2015, exactly even with the previous year. But that data does not account for the extreme market turbulence in August, when service providers report fielding record levels of inquiries from participants through call centers.
Equities gained 1.2 percent in the first half of the year, as recorded by the S&P 500 total return index. The second half of 2010 saw a 23.3 percent return, and the second half of 2009 saw a 22.6 percent gain in participants' equity investments.
All told, 28 percent of U.S. retirement assets are in defined contribution plans, or $6.8 trillion of a total $24.8 trillion.
Of the defined contribution assets, $4.7 trillion are held in 401(k) plans. IRAs hold the most value, with $7.6 trillion in assets. Private sector defined benefit pension plans hold $3 trillion, while public pension plans hold $5.2 trillion.
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Nick Thornton
Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.
