Working Americans are still committed to the 401(k) system, says Investment Company Institute President and CEO Paul Schott Stevens.
Updated data from October through the end of 2008 shows 401(k) participant activity was “in line with historical norms,” according to ICI. Only 3.7 percent of DC plan participants stopped contributing to their accounts in 2008. Most participants maintained their asset allocations; 14.4 percent changed the asset allocation of their account balances, and 12.4 percent changed their contribution mix.
During the course of 2008, 3.9 percent of DC plan participants took any withdrawals, with 1.3 percent taking hardship withdrawals (up from 1.2 percent through October). In addition, 15.3 percent of participants had loans outstanding at year-end, according to ICI.
But the effort to improve America’s 401(k) system anchors on policymakers as workers advocate groups press for plans with less investment risk.