Fidelity Investments reported the average balance in 401(k)
plans that it administers rose to $74,600 at the end of the first quarter, an
increase of 8% from the end of the fourth quarter 2011. The first-quarter
balance also represents a 62% increase since the end of the first quarter
2009—often considered the low of the 2008 to 2009 market downturn, when the
average balance was $46,200. Fidelity’s 401(k) savings analysis is based on its
11.8 million participant accounts.
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.
Fidelity also found the number of participants taking
advantage of annual increase programs (AIPs) grew nearly ninefold over the past
five years. AIP programs are an employer plan design option that automatically
increases contribution rates by participating employees, typically by 1% a
year. Seventy-six percent of Fidelity 401(k) plans offer this program.
During the first quarter, nearly 10% of Fidelity 401(k)
participants increased their contribution rate versus less than 4% who
decreased it. Of those participants in plans offering automatic AIP, 16%
increased their contribution rate.
In 2011, 20% more participants attended workplace workshops
and 45% more used online webinars than in 2010. Also, approximately two-thirds
of 401(k) participants accessed their accounts through NetBenefits, Fidelity’s
participant portal, either online or through the company’s smartphone