While 401(k) plan balances and participation are at record-highs, a survey from Aon Hewitt reveals that few American workers are actively managing their portfolios.
According to the company’s analysis of 138 DC plans, representing 3.5 million eligible workers, participation in 401(k) plans reached 79% at the end of 2014, the highest level since Aon Hewitt began tracking this data in 2002.
Read: Canadians need help with their retirement portfolios
The average plan balance also hit an all-time high of US$100,320, up notably from US$91,060 at the end of 2013. Additionally, the survey finds 24% of workers increased their contribution rate in 2014.
However, few workers are proactive when it comes to managing their accounts. Only 15% of workers rebalanced their portfolio in 2014—making it one of the lowest trading years on record. Even when eliminating the participants who are fully invested in target-date funds or other premixed portfolio options, only 19% of workers rebalanced their portfolio.
On average, workers were invested in just 3.6 different funds, down from 3.7 in 2013 and 3.9 funds in 2012.
“In the last decade, employers have made strides in helping workers prepare for retirement by adding plan features that make saving and investing easier,” says Rob Austin, director of retirement research at Aon Hewitt.
“At the same time, employees continue to take a passive role in managing their 401(k) plans,” he adds. “Employers can nudge workers in the right direction by providing more robust products, tools and resources.”
Also read: