ICI: Retirement Plans Fund Ownership at Record Level

December 2, 2003 (PLANSPONSOR.com) - A record number of households, 36.4 million, or 32.7%, owned mutual funds in employer-sponsored retirement plans, the latest survey from the Investment Company Institute (ICI) shows.

That was up from a year ago when 35.9 million households, or 32.8%, owned mutual funds inside retirement plans.

However, in general mutual fund ownership declined slightly in the 12-month period ending in July 2003, according to the ICI.   In all, the survey found 53.3 million households owned mutual funds – nearly half (47.9%) of all households. That’s down slightly from 54.2 million households, or 49.6% of all households the year before.

The survey found the total number of individual investors owning mutual funds declined to 91.2 million in the 2003 survey from 94.9 million in the 2002 survey.

“The harsh financial environment and weak performance in equity markets starting in 2000 contributed to the decline in overall household fund ownership,” Institute President Matthew Fink said in a statement. “Despite difficult equity markets, ownership of mutual funds within employer-sponsored retirement plans increased to record numbers.”

Additional survey findings:

  • Most mutual fund owning households have moderate incomes. As of July 2003, 52% of all households owning mutual funds had incomes between $25,000 and $75,000. Forty-one percent of fund-owning households had incomes of $75,000 or more.
  • Not surprisingly, fund ownership increases with income. As of July 2003, 28% of households with income less than $50,000 owned mutual funds, compared with 70% with incomes of $50,000 or more.
  • The vast majority (83%) of mutual fund households are headed by individuals age 25 to 64 years. Thirteen percent of households owning funds are headed by individuals age 65 or older; 4% are headed by individuals younger than age 25.

The Institute’s report is based on a survey of 3,007 randomly selected US households conducted in July 2003.