401(k) balances hit record, but few employees manage accounts
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Employees' 401(k) plan account balances and participation rates both hit records in 2014, according to a new analysis.
The Aon Hewitt analysis found that the average participant account balance hit $100,320 at the end of 2014, up sharply from $91,060 a year earlier, while the employee participation rate hit 79%, the highest level since the Lincolnshire, Illinois-based consultant began such tracking such information in 2002.
In addition, 24% of 401(k) plan participants increased their contribution rate in 2014.
On the other hand, only 15% of participants rebalanced their 401(k) plan investment portfolio, making it, Aon Hewitt said, one of the lowest trading years on record.
“In the last decade, employers have made strides in helping workers prepare for retirement by adding plan features that make saving and investing easier,” Rob Austin, Aon Hewitt's director of retirement research in Charlotte, North Carolina, said in a statement.
“At the same time, employees continue to take a passive role in managing their 401(k) plans. Employers can nudge workers in the right direction by providing more robust products, tools and resources,” Mr. Austin added.
The analysis, released Thursday, is based on 138 defined contribution plans, with 3.5 million eligible participants.
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