Fidelity Investments reported Tuesday that its average 401(k) balance rose to $74,600 at the end of the first quarter, up 8% from the end of the fourth quarter of 2011. The first-quarter balance also represents a 62% increase since the end of the first quarter of 2009, often considered the low of the 2008-2009 market downturn, when the average balance was $46,200.
Strong stock market performance in the first quarter accounted for approximately 80% of the account balance growth with the other 20% attributed to both participant and employer contributions, according to the company.
“Participants have become much more engaged in their financial futures, as demonstrated by increased savings levels quarter over quarter,” James MacDonald, president of workplace investing for Fidelity, said in a statement. “We also see clear evidence that employers can have a meaningful impact on employee retirement readiness by fostering a culture of savings at the workplace.”
According to Fidelity, additional highlights from the first quarter include:
• Annual increase programs help drive savings. The number of participants taking advantage of annual increase programs (AIP) increased nearly nine fold over the past five years. During the first quarter, nearly 10% of Fidelity 401(k) participants increased their contribution rate versus less than 4% who decreased it. But of those participants in plans offering automatic AIP, 16% increased their contribution rate.
• Investors are seeking guidance at higher rates than ever before. In 2011, 20% more participants attended workplace workshops and 45% more used online webinars compared to 2010.
Fidelity, which manages $1.6 trillion of total assets as of Feb. 29, 2012, bases its analysis on its 11.8 million 401(k) accounts, the largest amount of any company in the industry.