An industry survey finds that 401(k) participation and balances are at record highs — while participant trading is at record lows. Coincidence?
According to Aon Hewitt's analysis of 138 DC plans representing 3.5 million eligible workers, participation in 401(k) plans reached 79% at the end of 2014, the highest level since Aon Hewitt began tracking this data in 2002.
The average plan balance also hit an all-time high of $100,320, up from $91,060 at the end of 2013. Additionally, Aon Hewitt found that nearly one quarter of workers (24%) increased their contribution rate in 2014.
However, only 15% of workers rebalanced their portfolio in 2014 — making it one of the lowest trading years on record, according to Aon Hewitt. Even when eliminating the participants who are fully invested in target-date funds or other premixed portfolio options — which do not require rebalancing — fewer than one in five (19%) of workers rebalanced their portfolio.
Additionally, Aon Hewitt also found that on average, workers were now invested in just 3.6 different funds, down from 3.7 in 2013 and 3.9 funds in 2012.
