Fidelity Investments recently released 401(k) highlights from the fourth quarter of 2009 as well as for the full year that showed significantly higher balances with many participants recouping much of their losses from 2008.

It also released analysis on participants who have held a Fidelity 401(k) plan for the past 10 years that showed the power of consistent employee savings coupled with employer contributions and dollar cost averaging.

Average 401(k) account balances ended the year at $64,200, up another 5.7 percent from the end of the third quarter and up 28 percent for the year.

The median one-year personal rate of return (PRR) in 2009 was nearly 27 percent. PRR is a measure of investment performance during a given period of time. During the same time period, the S&P 500 had a total return of 26 percent.

The average deferral rate remained relatively flat for the year at about 8.2 percent, but the fourth quarter saw the continuation of a positive trend of more participants electing to increase their deferral rates than decrease them.

“The good news is that many workers, in spite of the economy, chose to save in their 401(k)s throughout 2009, and as the markets recovered, so did many Americans’ account balances,” said Jim MacDonald, president of Workplace Investing at Fidelity Investments, in a statement.

“When we took a longer-term view and looked at the past decade, we found that many participants were able to significantly grow their nest egg, despite periods of great market volatility,” explained MacDonald.

Even during a decade that included unprecedented volatility coupled with two of the worst market downturns in history, analysis of employed participants with a Fidelity 401(k) plan for the past 10 years (1999 to 2009) showed their account balance increased nearly 150 percent to $163,900 at the end of 2009 from $65,800 at the end of 1999.

The balance increase was due to continued participant and employer contributions, dollar cost averaging and market returns. The analysis also showed that these continuous participants had a median age of 51 years with a deferral rate of 10.4 percent.

For many participants who took higher risk with their asset allocation as compared to age-based target retirement date funds, the past 10-year period did not result in higher returns.

Analysis of participants with 10-year PRRs showed that 65 percent of them took higher risk than the corresponding age-based Freedom Fund, which was assigned assuming a retirement age of 65. Of that higher risk group, nearly seven out of ten (69 percent) showed a lower return than their age-based funds over the course of the decade.