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Back to “normal”?

By March 6, 2019No Comments

Young/new employees dive into stocks

Some benchmarks in the stock market have returned to where they were before the recent recessions, bubbles, and scandals. Others, though, may never be the same. Whether that’s good or bad you can decide for yourself. Back in 2007, fewer than half of 401(k) plan participants then in their twenties invested their account balances in stocks. Flash forward to year-end 2016, when equities accounted for more than 80% of 401(k) plan balances for over ¾ of twenty-somethings.

The increase may be due in part to the proliferation of auto features in 401(k) plans, and the automatic investments that go along with them. As of December 31, 2016, about 2/3 of 401(k) plans included a TDF in their investment line-up, and 21% of assets were invested in them. For new hires, the numbers are even more impressive: by the end of 2016, 71% of new hires had
balanced fund among their 401(k) plan investments, with 38% of new hire account balances invested in a TDF. Detailed information is available on investments, loans and more in the study from the Investment Company Institute (ICI) and the Employee Benefit Research Institute (EBRI) at https://tinyurl.com/ICI-EBRI-investments.