Benefits

Women Are Saving More, Borrowing Less from 401(k) Plans

By PLANSPONSOR staff editors@plansponsor.com | May 08, 2012
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May 8, 2012 (PLANSPONSOR.com) - Two groups of participants—women and Gen Y members—are increasing their savings in defined contribution plans, according to MassMutual Retirement Services. 

Women increased their deferral rates at twice the level of men (an average increase of four basis points for women vs. an average increase of two basis points for men), according to MassMutual's Retirement Services Division data for the first quarter.

In defined contribution plans administered by MassMutual, 4.22% of participants increased their deferral percentage in the first quarter, marking the second highest percentage in a single quarter since measurement began in 2007. 

"Deferral percentages are up, with the greatest increase coming from Gen Y, and participants are letting their money work for them by avoiding loans, withdrawals and other behaviors that can have a negative impact," said Elaine Sarsynski, executive vice president of MassMutual's Retirement Services Division and chairman and chief executive of MassMutual International LLC.

Average deferral rates for the youngest savers (3.58%) are lower than they are for older participants (7.18%). Gen Y savings, however, are increasing at an accelerated rate. 

Participants age 29 and under increased their savings levels by 2.29% vs. participants age 60 and older who increased by just .42%. Participants aged 40 to 49 had the second highest savings level increase of .57%, to an average deferral rate of 5.27%. Also encouraging is that only 1.30% of participants overall decreased their deferral percentage during the quarter, and only 2.98% stopped deferring.