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401(k) Plan Asset Allocation, Account Balances, and Loan Activity in 2006

40 Pages Posted: 10 Aug 2007  

Jack VanDerhei

Employee Benefit Research Institute (EBRI)

Sarah Holden

Investment Company Institute

Craig Copeland

Employee Benefit Research Institute (EBRI)

Luis Alonso

Employee Benefit Research Institute (EBRI)

Abstract

Over the past two decades, 401(k) plans have grown to be the most widespread private-sector employer-sponsored retirement plan in the United States, and now serve as the most popular defined contribution (DC) plan, representing the largest number of participants and assets. In 2006, 50 million American workers were active 401(k) plan participants. By year-end 2006, 401(k) plan assets had grown to represent 16 percent of all retirement assets, with $2.7 trillion in assets. In an ongoing collaborative effort, the Employee Benefit Research Institute (EBRI) and the Investment Company Institute (ICI) collect annual data on millions of 401(k) plan participants as a means to accurately portray how these participants manage their accounts. This paper serves as an update of EBRI and ICI's ongoing research into 401(k) plan participants' activity through year-end 2006. The report is divided into five sections: The first describes the EBRI/ICI 401(k) database; the second focuses on changes in participant account balances over time, analyzing a group of consistent 401(k) participants; the third presents a snapshot of participant account balances at year-end 2006; the fourth looks at participants' asset allocations; and the fifth looks at participants' 401(k) loan activity.

Keywords: 401(k) plans, Asset allocation, Employment-based benefits, Pension plan assets, Pension plan loans, Retirement plans, Self-directed investments

JEL Classification: D31, G11, J26

Suggested Citation

VanDerhei, Jack and Holden, Sarah and Copeland, Craig and Alonso, Luis, 401(k) Plan Asset Allocation, Account Balances, and Loan Activity in 2006. EBRI Issue Brief, No. 308, August 2007. Available at SSRN: https://ssrn.com/abstract=1005379

Jack VanDerhei (Contact Author)

Employee Benefit Research Institute (EBRI) ( email )

1100 13th Street, NW
Suite 878
Washington, DC 20005-4204
United States

HOME PAGE: http://www.ebri.org

Sarah Holden

Investment Company Institute ( email )

1401 H Street, NW
Research Department
Washington, DC 20005
United States
(202) 326-5915 (Phone)

Craig Copeland

Employee Benefit Research Institute (EBRI) ( email )

1100 13th Street, NW
Suite 878
Washington, DC 20005-4204
United States
202-775-6356 (Phone)
202-775-6312 (Fax)

Luis Alonso

Employee Benefit Research Institute (EBRI) ( email )

1100 13th Street, NW
Suite 878
Washington, DC 20005-4204
United States
202-775-6315 (Phone)
202-775-6312 (Fax)

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