Fidelity Database Shows Participants More Inclined to
Save
August 13, 2008 (PLANSPONSOR.com) - An analysis of
Fidelity Investment's 16,723 corporate defined contribution
plans representing 11.5 million participants indicates
workers are more inclined to save for retirement despite the
recent market volatility.
According to a Fidelity news release, among all
contributing Fidelity participants, the average pre-tax
amount employees contributed in the first half of 2008
increased by 1.4% to $3,187 compared with $3,142 in the
first half of 2007. Among employees who contributed to
the same workplace savings plan in both the first half of
2008 and 2007, the average pre-tax contribution increased
by nearly 7% to $3,512 in the first half of 2008.
However, while the analysis shows participants are
making retirement savings a priority despite the weak
economy, Fidelity found most employees participating in a
workplace savings plan are not contributing to the annual
limit. As of the end of 2007, only 9% of all workers
contributing to their workplace savings plan reached the
annual maximum of $15,500.
Among highly compensated employees, nearly
four-out-of-ten (38%) contributed the maximum amount, but
among the non-highly compensated, just 3.8% did so, the
release said.
As workers continued to fund their workplace
savings accounts, the average account balance declined.
Fidelity found the average participant account balance
was down 7.5% to $64,000 at the end of June 2008 from
$69,200 at the end of June 2007, due to market impacts.
However, the average account balance for those employees
who stayed in their plans for both years was down less
than 1% to $71,500 at the end of June 2008 from $72,000.
By comparison, during this same period, the S&P 500
declined nearly 15%.