Less than 3% of defined contribution plan participants stopped contributing to their workplace plans in 2013, according to the Investment Company Institute.
Of nearly 24 million DC participants, just 2.7% stopped making contributions in 2013, up slightly from 2.6% in 2012. The percentage of people who quit making contributions slowed down from ICI’s review of the first half of 2013, when 1.5% had already stopped.
With so few people stopping contributions, ICI suggested, “It is possible that some of these participants stopped contributing simply because they reached the annual contribution limit.”
Withdrawals are also just barely up, with 3.5% of participants taking a withdrawal in 2013, compared with 3.4% in 2012. Hardship withdrawals were unchanged at 1.7%.
Loan activity was unchanged from 2012 at 18.2% and only slightly down from 2011’s 18.5%.
Participants were a little more active in reallocating their balances and contributions. ICI found 10.7% of participants changed the asset allocation of their account balances, up a full percentage point from 2012. Changes in contribution reallocations were more modest, increasing from 6.6% in 2012 to 7.4% in 2013.
ICI found that DC plan assets account for more than a quarter of all retirement assets. For households, they represent about one-tenth of aggregate assets. In the fourth quarter of 2014, 401(k) plans and other defined contribution plans held $5.9 trillion, or 26% of retirement assets. Pension plans, both private and public, held $8.6 trillion, with the bulk of that in public plans.