What You Need to Know
- Defined contribution plan participants generally stayed the course in Q1 2022, despite a falling stock market, according to an ICI report.
- About 28% of retirement assets are in 401(k) plans, the ICI stated.
- Only 3% of DC plan participants changed their contribution rate in the first quarter.
Despite the falling stock market, investors — at least those in defined contribution plans — have stayed put through the first quarter this year. Only 1.8% of those in DC plans took any withdrawals, the same as in Q1 2020, and lower than the 2.2% in 2021. But this is slightly higher than pre-pandemic levels in 2019 of 1.4%, according to an Investment Company Institute report.
The ICI noted that 28% of retirement savings are in 401(k) plans. The record-keeping data it studied represents about 35 million DC plan investors.
The study also found that the share of investors who took a hardship withdrawal was at its highest since 2019: 0.9% in the quarter, up from 0.6% in in the year-ago quarter, 0.8% in Q1 2020 and 0.5% in Q1 2019.
Another option for participants was to stop contributing to a DC plan, which 0.9% did in the first quarter, versus 0.8% in 2021 and 1.4% in 2020. It was on par with 2019, in which 0.9% stopped contributing.
The numbers did not include coronavirus-related distributions.