ICI Survey: No Change in 2014 for Most DC Plan Participants

By Mike Bushnell • February 17, 2015 • 0 Comments
Buoyed by a rising stock market, most defined contribution plan participants stayed the course, according to a new survey published by the Investment Company Institute.

The trends largely reflected a continuation of patterns that have been going on since at least 2011, when the country really began pulling out of the damage wrought by the Great Recession. Just 1.4% of plan participants took hardship withdrawals in the first three quarters of 2014; that number has held steady since at least 2008.  

The number of participants who stopped contributing to their DC plan in 2014 rose 0.2% from the same timeframe in 2013, from 2.5% to 2.7%. However, that number is way down from the throes of the recession; in 2009, 5% of all participants stopped contributing to their DC plans.
The report also revealed new information about how plan participants are changing the asset allocations of both current account balances and their contributions going forward:

Account balances. In total, 8.1% of participants elected to change the asset allocation of their account balance, down from 9.2% a year earlier — and way down from the 13.5% of participants who elected to make an asset allocation change in the first nine months of 2008.   

Contributions. The number of participants who changed the asset allocations of their contributions dropped to at least a seven-year low. Just 5.6% of participants elected to make a change in their contributions, down from 9.8% in the first nine months of 2009, and 9.1% for the same period in 2008. 
However, loan activity remains higher than it was in the years leading up to the Great Recession. The survey found that 18% of plans have outstanding loans; this number was around 15% in 2008, before spiking to 18.2% in 2010, a number that has held relatively steady since then.  

The report was gathered from surveys of plan providers who covered more than 25 million DC participants in 2014. Sarah Holden, ICI’s Director of Retirement and Investor Research, and Daniel Schrass, an associate economist at ICI, compiled and published the report.