Last week we posted about Aon Hewitt’s 2013 “Hot Topics in Retirement” report, focusing on participation and saving rates. The report also included a raft of benchmarking information on investments and account activity. Let’s take a look at those areas.
Investments
• 39.7% average allocation to premixed portfolios weighted by participant — an increase of 13 percentage points in the past two years
• 68.3% average total plan balance in equities, up from 66.8% in 2011
• 13.4% average allocation to company stock when available, down from 41.8% in 2002
• 5.3 asset classes, on average, held by participants, up from recent periods
Account Activity
• 14.5% of participants initiated a trade during 2012, down significantly from about 20% in 2008
• 16.7% of participants initiated a trade among those not using premixed portfolios, down from 18.1% in 2011
• 26.6% of participants had an outstanding loan, down from the 2009 high of 27.6%
• 6.5% of participants initiated a withdrawal, significantly higher since 2006 at 4.9%
• among participants who terminated employment in 2012, 43.1% took a cash distribution
• 5.6% of assets were cashed out of the plan, down from 7.3% in 2011
The report also offers four recommendations that plans should consider:
• Leverage the full potential of automation.
• Offer an array of investment advisory help.
• Curb leakage out of the plan and look for new ways to reach employees.
• Look for innovative ways to promote and educate a digital workforce.
