Just 0.9 per cent of 35 million U.S. defined contribution pension plan members ceased making contributions during the first quarter of 2022, according to a report by the Investment Company Institute.
While this percentage was slightly higher than in the first quarter of 2021 (0.8 per cent), it was a substantial drop from 2020 (1.4 per cent) and 2009 (2.7 per cent), said the report, noting some participants may have stopped contributions because they reached their annual contribution limit.
Just 1.8 per cent of DC plan members took withdrawals, compared to 2.2 per cent in the first quarters of 2021 and 2020. In addition, only 0.9 per cent took hardship withdrawals in the first quarter of 2022, compared to 0.6 per cent in the first quarter of 2021, 0.8 per cent in the first quarter of 2020 and 0.5 per cent in the first quarter of 2019.
Only 4.7 per cent of plan members changed their investment allocations, slightly lower than during the same periods in 2021 (5.5 per cent) and 2020 (6.2 per cent). Another three per cent changed the asset allocations of their contributions, compared to 3.9 per cent in 2021 and 4.1 per cent in 2020.
“Even as stock values declined at the start of 2022, DC plan participants generally stayed the course and refrained from changing asset allocations,” said Sarah Holden, ICI’s senior director of retirement and investor research, in a press release. “Furthermore, the data suggest that through the first quarter of 2022, retirement savers continued contributing to DC plans.”