Portal de Periódicos da CAPES

401(k) Plan Asset Allocation, Account Balances, and Loan Activity in 2019

2022; RELX Group (Netherlands); Linguagem: Inglês

10.2139/ssrn.4152938

1556-5068

Sarah Holden, Steven Bass, Craig Copeland,

Housing Market and Economics

The bulk of 401(k) assets were invested in stocks. On average, at year-end 2019, 68 percent of 401(k) participants' assets were invested in equity securities through equity funds, the equity portion of balanced funds, and company stock. Twenty-nine percent of assets were in fixed-income securities such as stable value investments, bond funds, money funds, and the fixed-income portion of balanced funds.More 401(k) plan participants held equities at year-end 2019 than before the financial market crisis (year-end 2007), and most had the majority of their accounts invested in equities. For example, about two-thirds of participants in their twenties had more than 80 percent of their 401(k) plan accounts invested in equities at year-end 2019, up from less than half of participants in their twenties at year-end 2007. Overall, nearly 95 percent of 401(k) participants had at least some investment in equities at year-end 2019.At year-end 2019, 87 percent of 401(k) plans, covering 87 percent of 401(k) plan participants, included target date funds in their investment lineup. At year-end 2019, 31 percent of the assets in the EBRI/ICI 401(k) database were invested in target date funds and 60 percent of 401(k) participants in the database held target date funds. Also known as lifecycle funds, these funds are designed to offer a diversified portfolio that automatically rebalances to be more focused on income over time.In an ongoing collaborative effort, the Employee Benefit Research Institute (EBRI) and the Investment Company Institute (ICI) collect annual data on millions of 401(k) plan participants as a means to examine how these participants manage their 401(k) plan accounts. This report is an update of EBRI and ICI's ongoing research into 401(k) plan participants' activity through year-end 2019. The report is divided into four sections: the first describes the EBRI/ICI 401(k) database; the second presents a snapshot of participant account balances at year-end 2019; the third looks at participants' asset allocations, including analysis of 401(k) participants' use of target date, or lifecycle, funds; and the fourth focuses on participants' 401(k) loan activity.