ICI Data Shows DC Participants Continued To Save In First Half Of ‘14

Data from the Investment Company Institute (ICI) shows that Americans continued to save in the defined contribution (DC) plans at work during the first half of 2014. The study, “Defined Contribution Plan Participants’ Activities, First Half 2014,” includes data from January through June 2014.

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 half of 2014. The study found that the vast majority of DC plan participants continued contributing to their plans in the first half of 2014. Only 2.1% of DC plan participants stopped contributing, compared with 1.5% in the first half of 2013. DC plan withdrawals in the first half of 2014 remained low and were in line with the prior year’s activity; participants generally did not tap their accounts.

Only 2.3% of DC plan participants took withdrawals in the first half of 2014, compared with 2.2% in the first half of 2013. Less than 1% took hardship withdrawals during the first half of 2014, the same share as in the first half of 2013. Loan activity edged up slightly by the end of June 2014, the study found, and it continues to remain elevated compared with six years ago.
The data show that at the end of June 2014, 17.9% of DC plan participants had loans outstanding, compared with 17.7% at the end of March 2014, 18.2% at year-end 2013, and 15.3% at year-end 2008. As stock values generally rose throughout the first six months of the year, most DC plan participants stayed the course in their asset allocations.

In the first half of 2014, 6.6% of DC plan participants changed the asset allocation of their account balances and 4.3% changed the asset allocation of their contributions—slightly lower than the reallocation activity observed in the first half of 2013.

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