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Data & Research November 5, 2013
Little Change in DC Saving, Withdrawal Behavior
The first half of 2013 saw little change in saving and withdrawal activity among employer-sponsored defined contribution (DC) plan participants, an Investment Company Institute (ICI) study found.
Reported by John Manganaro
The ICI’s survey, “Defined Contribution Plan Participants’ Activities, First Half 2013,” found contribution rates remained high during the first half of the year. Just 1.5% of DC plan participants stopped contributing in the first half of 2013—a slight decreased from the 1.6% measured during the first half of 2011 and 2012.
Withdrawal activity also remained low during the first six months of 2013, with 2.1% of DC plan participants taking any type of withdrawal in the first half of 2013. Hardship withdrawals clocked in at 0.9% for participants. Researchers observed the same withdrawal levels last year.
DC plan loan activity, down fractionally over last year, remains elevated compared with rates before the 2008-09 financial crisis. At the end of June 2013, 18.1% of DC plan participants had loans outstanding, compared with 17.9 percent at the end of March 2013, 18.2% at year-end 2012, and 15.3% at year-end 2008.
Asset allocation strategies for DC plans remained steady as well from January to the end of June, with 7.4% of DC plan participants changing the asset allocation of their account balances and 6.0% altering contribution allocations.
More on the study’s findings and methodology here.