According to an analysis of Federal Reserve data published recently by the Employee Benefit Research Institute (EBRI), median asset levels in defined contribution (401(k) and IRA/Keogh) plans dropped at least 15% from year-end 2007 to mid-June 2009, reflecting the significant downturn in the economy. The EBRI study is based on the 2007 Survey of Consumer Finances (SCF), the Federal Reserve Board’s triennial survey of wealth, adjusted by EBRI to account for the economic downturn in 2008, which was not reflected in the SCF results. The EBRI analysis adjusted account balances of defined contribution plans and individual retirement accounts (IRAs) based on the asset allocation reported within the plans by using equity and bond market returns from January 1, 2008, to June 19, 2009:
o Defined Contribution Plans: Among all families with a defined contribution plan, the median (midpoint) plan balance was $31,800 in 2007, up 16% from 2004, the date of the previous SCF release. According to EBRI estimates, this dropped 16.4% (to $26,578) from year-end 2007 to mid-June 2009. Losses were higher for families with more than $100,000 a year in income (down 22%) or having a net worth in the top 10% (down 28%).
o IRA/Keogh Plans: Among all families with an IRA/Keogh plan, the median value of their plan was $34,000 in 2007, up 3% from 2004. EBRI estimates this median value dropped 15% (to $28,955) from year-end 2007 to mid-June 2009.