DC Participants Maintain Status Quo

An ICI study, “Defined Contribution Plan Participants’ Activities, First Half 2012,” found that only 1.6% of DC participants stopped contributing in the first half of 2012, compared with 1.6% in the same period in 2011 and 1.7% in 2010.

DC plan withdrawals in the first half of 2012 remained low and were in line with last year’s first half activity. Only 2.1% of DC plan participants made withdrawals in the first half of 2012, as in the first half of 2011. Only 0.9% took hardship withdrawals during the first half of 2012, slightly down from 1.1% in the first half of 2011. 

The study also found that loan activity fell slightly by the end of June 2012, although it continues to remain elevated compared with four years ago. At the end of June, 17.5% of DC plan participants had loans outstanding, compared with 18.5% at year-end 2011 and 15.3% at the end of 2008. 

As stock values generally rose over the first six months of the year, most DC plan participants stayed the course in their asset allocations, according to the study. In the first half of 2012, 7.1% of DC plan participants changed the asset allocation of their account balances and 4.9% changed the asset allocation of their contributions—similar reallocation levels as in 2011.

These findings are the results from ICI’s survey of a cross section of recordkeeping firms representing more than 24 million DC plan participant accounts, from January to June 2012. The full study is here.