Employees Continue to Save for Retirement

The study found commitment to contribution activity in the first quarter of 2013 continued at the high rate observed in the first quarter of 2012. Only 1% percent of DC plan participants stopped contributing in the first quarter, the same as in the first quarter of 2012.

DC plan withdrawals in the first quarter remained low and were in line with the prior year’s activity in that participants generally did not tap their accounts. Only 1.3% of DC plan participants took withdrawals in the first quarter, compared with 1.2% in the first quarter of 2012. Only 0.4% took hardship withdrawals during the first quarter, the same share as the first quarter of 2012.

Loan activity edged down slightly by March 2013, although it continues to remain elevated compared with five years ago. Data shows that at the end of March, 17.9% of DC plan participants had loans outstanding, compared with 18.2% at year-end 2012, and 15.3% at year-end 2008.

As stock values generally rose during the first three months of 2013, most DC plan participants stayed the course in their asset allocations. In the first quarter, 4.8% of DC plan participants changed the asset allocation of their account balances, and 4.8% changed the asset allocation of their contributions, which is similar to reallocation levels observed in the first quarter of 2012.

ICI’s latest study of retirement plan savers’ actions is based on defined contribution (DC) plan recordkeeper data covering about 24 million plan participant accounts. The study, “Defined Contribution Plan Participants’ Activities, First Quarter 2013,” includes data from January through March 2013. Assets in all DC plans represented more than one-quarter of assets in the total retirement market and accounted for almost one-tenth of U.S. households’ aggregate financial assets at the end of the first quarter of 2013.

A copy of the report can be downloaded here.