401(K) Plan Asset Allocation, Account Balances, and Loan Activity in 2003

24 Pages Posted: 18 Aug 2004

See all articles by Sarah Holden

Sarah Holden

Investment Company Institute

Jack VanDerhei

Employee Benefit Research Institute (EBRI)

Abstract

This paper provides an update on 401(k) plan participants' asset allocations, account balances, and loan activity as of year-end 2003, as measured by the collaborative EBRI/ICI Participant-Directed Retirement Plan database - the world's largest repository of information about individual 401(k) plan participant accounts. This update tracks the account balances of a large and representative sample of 401(k) plan participants through the severe bear market that caused broad stock market indexes to decline about 40 percent between year-end 1999 and early 2003 and the rebound that increased broad equity index values by 34 percent over the last 10 months of 2003. By year-end 2003, 401(k) plan assets had grown to $1.9 trillion and an estimated 42 million workers in the United States participated in these plans. The portion of 401(k) balances invested in equities increased in 2003, reflecting the strength of equity prices. Beyond the market-driven changes, 401(k) plan participants do not appear to have made significant asset reallocations or to have made changes in their loan activity. Participants' allocations to company stock remained in line with previous years. On average, at year-end 2003, 45 percent of 401(k) plan participants' assets were invested in equity funds, 16 percent in company stock, 9 percent in balanced funds, 10 percent in bond funds, 13 percent in guaranteed investment contracts (GICs) and other stable value funds, and 5 percent in money funds.

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

Holden, Sarah and VanDerhei, Jack, 401(K) Plan Asset Allocation, Account Balances, and Loan Activity in 2003. EBRI Issue Brief, No. 272, August 2004. Available at SSRN: https://ssrn.com/abstract=578145

Sarah Holden (Contact Author)

Investment Company Institute ( email )

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

Jack VanDerhei

Employee Benefit Research Institute (EBRI) ( email )

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

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

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