They might not be saving enough, but defined contribution plan participants have stuck to making their 401(k) contributions at a slightly better rate than they did in 2014.
According to data from the Investment Company Institute's study "Defined Contribution Plan Participants' Activities, First Three Quarters of 2015," only 2.5 percent of DC plan participants stopped contributing to their plans. That's down from 2.7 percent in the first three quarters of 2014.
In addition, DC plan withdrawal activity stayed low, in line with the first three quarters of 2014. Only 2.9 percent of DC plan participants took withdrawals in the first three quarters of 2015, compared with 3.1 percent during the first three quarters of 2014. Just 1.3 percent of DC plan participants took hardship withdrawals during the first three quarters of the year; that too is similar to the percentage of participants who did so a year earlier.
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When it comes to loans, those were also slightly lower than the year before, although they're still up compared with seven years ago. At the end of September 2015, 17.6 percent of DC plan participants had loans outstanding, compared with 18.0 percent at the end of September 2014. At the end of 2008, that number was noticeably lower, with 15.3 percent of DC plan participants having loans outstanding.
Most DC plan participants stuck with their existing asset allocations despite the drop in the market during the first nine months of the year.
In the first three quarters of 2015, 8.3 percent of DC plan participants changed the asset allocation of their account balances and 6.8 percent changed the asset allocation of their contributions. These levels of reallocation activity were somewhat higher than the reallocation activity observed in the first three quarters of 2014.
The study includes data from January through September 2015 and is based on DC plan recordkeeper data covering more than 26 million participant accounts at employer-based DC plans.
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