PLANSPONSOR - December 2021 - January 2022 - 13

Older
Participants
Up Their
Exposure
To TDFs
401(k) plan participants-especially
those in older age cohorts-have been
increasing their exposure to target-date
funds (TDFs), according to a report from
the Employee Benefit Research Institute
(EBRI) and the Investment Company
Institute (ICI).
The two organizations compared
year-end 2018 data and year-end 2010 data
from the EBRI/ICI 401(k) database, which
is constructed from millions of administrative
records of 401(k) plans. It is a crosssection
of the entire population of 401(k)
plan participants and represents a wide
range of them-including those who are
young and new to their job, as well as
older participants and those employed by
their current company for many years.
For this comparison, the institutes
looked at " consistent " 401(k) participants,
or those who had an account at
the end of each year from 2010 through
2018; the firms say this removed the
effect of participants and plans entering
and leaving the database.
According to the analysis, at year-end
2010, 50% of consistent 401(k) participants
held at least some TDF investments
in their 401(k) account, and that share
had increased to 56.4% by year-end 2018.
Seventy-seven percent of 401(k) plan
participants in their 20s held TDFs in
2018. All age groups increased their exposure
to target-date funds.
However, the largest net movement
toward the funds' use over the
period occurred among consistent 401(k)
participants in their 40s, 50s and 60s.
Participants in their 20s had the highest
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use of TDFs in both periods, but experienced
the smallest net change.
Sarah Holden, one of the authors of
the perspective and ICI's senior director
of retirement and industry research,
notes, " Target-date funds provide both
age-appropriate investment diversification
and rebalancing over time, and it
is likely that increased use of them by
these consistent older 401(k) participants
reflects these retirement savers taking
advantage of those features. "
Consistent 401(k) participants in their
60s moved toward a 100% concentration in
target-date funds, on net: 15.1% of consistent
401(k) participants in their 60s had
100% of their 401(k) plan account invested
in target-date funds at year-end 2010,
compared with 16.5% at year-end 2018.
Meanwhile, younger consistent 401(k)
participants moved away from a 100% allocation,
on net. -Judy Faust Hartnett
PLANSPONSOR.COM December 2021 - January 2022 13
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PLANSPONSOR - December 2021 - January 2022

Table of Contents for the Digital Edition of PLANSPONSOR - December 2021 - January 2022

INSIGHTS
RULES & REGULATIONS
UPFRONT
ESG Interest Piqued
2021 Best in Class DC Providers
Ramping Up Offerings
Annuities Still Misunderstood
Student Loan Repayment
FIDUCIARY FORUM
INSIDE ANGLE
PLAN PROFILE
PLANSPONSOR - December 2021 - January 2022 - Cover1
PLANSPONSOR - December 2021 - January 2022 - Cover2
PLANSPONSOR - December 2021 - January 2022 - 1
PLANSPONSOR - December 2021 - January 2022 - 2
PLANSPONSOR - December 2021 - January 2022 - 3
PLANSPONSOR - December 2021 - January 2022 - INSIGHTS
PLANSPONSOR - December 2021 - January 2022 - 5
PLANSPONSOR - December 2021 - January 2022 - RULES & REGULATIONS
PLANSPONSOR - December 2021 - January 2022 - 7
PLANSPONSOR - December 2021 - January 2022 - 8
PLANSPONSOR - December 2021 - January 2022 - 9
PLANSPONSOR - December 2021 - January 2022 - UPFRONT
PLANSPONSOR - December 2021 - January 2022 - 11
PLANSPONSOR - December 2021 - January 2022 - 12
PLANSPONSOR - December 2021 - January 2022 - 13
PLANSPONSOR - December 2021 - January 2022 - 14
PLANSPONSOR - December 2021 - January 2022 - 15
PLANSPONSOR - December 2021 - January 2022 - ESG Interest Piqued
PLANSPONSOR - December 2021 - January 2022 - 17
PLANSPONSOR - December 2021 - January 2022 - 18
PLANSPONSOR - December 2021 - January 2022 - 19
PLANSPONSOR - December 2021 - January 2022 - 2021 Best in Class DC Providers
PLANSPONSOR - December 2021 - January 2022 - 21
PLANSPONSOR - December 2021 - January 2022 - 22
PLANSPONSOR - December 2021 - January 2022 - 23
PLANSPONSOR - December 2021 - January 2022 - 24
PLANSPONSOR - December 2021 - January 2022 - 25
PLANSPONSOR - December 2021 - January 2022 - 26
PLANSPONSOR - December 2021 - January 2022 - 27
PLANSPONSOR - December 2021 - January 2022 - 28
PLANSPONSOR - December 2021 - January 2022 - 29
PLANSPONSOR - December 2021 - January 2022 - Ramping Up Offerings
PLANSPONSOR - December 2021 - January 2022 - 31
PLANSPONSOR - December 2021 - January 2022 - 32
PLANSPONSOR - December 2021 - January 2022 - 33
PLANSPONSOR - December 2021 - January 2022 - Annuities Still Misunderstood
PLANSPONSOR - December 2021 - January 2022 - 35
PLANSPONSOR - December 2021 - January 2022 - Student Loan Repayment
PLANSPONSOR - December 2021 - January 2022 - 37
PLANSPONSOR - December 2021 - January 2022 - FIDUCIARY FORUM
PLANSPONSOR - December 2021 - January 2022 - INSIDE ANGLE
PLANSPONSOR - December 2021 - January 2022 - PLAN PROFILE
PLANSPONSOR - December 2021 - January 2022 - Cover3
PLANSPONSOR - December 2021 - January 2022 - Cover4
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