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Average 401(k) balances rose to $74,600 at the end of the first quarter of 2012, 8% over first-quarter 2011 levels, according to Boston-based Fidelity Investments.
The first-quarter balances also represent a 62% increase since the end of the first quarter of 2009, considered the bottom of the 2008-2009 stock market downturn, when the average balance was $46,200, Fidelity reported Tuesday.
Strong stock market performance in the first quarter accounted for nearly 80% of the account balance growth, with the remainder attributable to increased participant and employer contributions, according to Fidelity.
“Participants have become much more engaged in their financial futures, as demonstrated by increased savings levels quarter over quarter,” said James M. MacDonald, Fidelity Investments' president of workplace investing, in a statement. “We also see clear evidence that employers can have a meaningful impact on employee retirement readiness by fostering a culture of savings at the workplace.”
The number of participants taking advantage of annual-increase programs, a design option that automatically boosts contribution rates by participating employees, have increased nearly nine-fold over the past five years, Fidelity also reported.
During the first quarter of 2012, nearly 10% of Fidelity's 401(k) participants increased their contribution rates, while less than 4% decreased it. But 16% of participants in plans offering automatic AIP increased their contribution rates. Of 401(k) plans administered by Fidelity, 76% offer this option.
Fidelity also found that 401(k) plan members are seeking investment guidance at higher rates than before: In 2011, 20% more participants attended workplace workshops and 45% more used online webinars compared with 2010.
Fidelity's 401(k) savings analysis is based on its participant base of 11.8 million accounts.
Enrollment in health savings accounts is surging as more employers are moving to consumer-driven health care plans, according to Fidelity Investments.