Benefits

Ownership in 401(k) Plans Continues to Grow

By PLANSPONSOR staff editors@plansponsor.com | September 26, 2012
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September 26, 2012 (PLANSPONSOR.com) – Fewer American families are participating in a retirement plan at work, but more of those with a plan are in a 401(k), a report found.

According to a report by the Employee Benefit Research Institute (EBRI), at the same time 401(k) plan ownership is rising, ownership of individual retirement accounts (IRAs) is sliding.

In an analysis of the period 2007 to 2010, EBRI found that the share of American families with a member in any employment-based retirement plan from a current employer increased steadily, from 39% in 1992, to 41% in 2007, before declining to 38% in 2010.

Ownership of 401(k)-type plans among families participating in a retirement plan more than doubled, from 32% in 1992, to 79.5% in 2007, and increased again in 2010, to 82%. But the percentage of families owning an IRA or Keogh retirement plan (for the self-employed) declined, from 31% in 2007, to 28% in 2010. In addition, the percentage of families with a retirement plan from a current employer, a previous employer's defined contribution (DC) plan, or an IRA/Keogh declined, from 66% in 2007, to 64% in 2010.

As in the past, EBRI found that retirement plan assets account for a growing percentage of most Americans' financial wealth, not counting the value of their home. The median percentage of families' total financial assets comprised by DC plan assets and/or IRA/Keogh assets (assuming the family had any) increased from 2007 to 2010, and accounted for a clear majority of these assets: