MutualFundWire.com: What Funds are 401k Participants In?
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Thursday, April 8, 1999

What Funds are 401k Participants In?


A new survey from Buck Consultants concludes that 401k education is encouraging workers investing in the plan to seek out more aggressive opportunities.

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  • Buck Consultants
    • Of the 646 sponsors questioned, 60% with education programs reported higher investment contributions, and 58% with education programs reported that employees were becoming less conservative in their investment choices.

    Approximately 89% of employers with 401(k) plans have instituted some kind of educational program. Further, 28% are looking at ways to automatically enroll employees. This may be because the number of eligible employees investing in 401(k) plans remains at 77%, its level for the past six years.

    How did participants invest their savings? 468 of the sponsors questioned responded. The results are as follows:

    HOW PARTICIPANTS INVESTED
    Investment Type Percentage Offering Option Average % of Assets Invested % Held in Mutual Funds
    Equities
    Company Stock 33.80% 28.10% N.A.
    Index Fund 60.50% 18.90% 82%
    Growth Stock 84.80% 33.30% 87%
    Small Cap Stock Fund 52.60% 9.50% 88%
    International Stock Fund 70.70% 6.00% 90%
    Bonds & Money Markets
    Managed Bond Fund 42.10% 6.40% 87%
    Passive Bond Fund 16.00% 5.80% 82%
    US Gov't Securities 25.00% 6.70% 72%
    Money Market Fund 52.40% 9.60% 80%
    Balanced
    Balanced Fund 67.90% 15.40% 86%
    Lifestyle Fund 17.10% 15.10% 77%
    Other
    Stable Value Funds 55.10% 23.20% 6%
    Mutual Fund Window -- Type 1 0.90% 100.00% 100%
    Mutual Fund Window -- Type 2 4.70% 22.60% 100%
    Self-Directed Brokerage Account 3.20% 14.10% 18%
    Other 28.60% 10.70% 46%

    *Data provided by Buck Consultants.
    For Investment Options through year-end 1997.

    Another factor that could have helped participants to invest more aggressively is the percentage of plans that allow daily changes in investment selection. 71% of those surveyed have a daily selection process, up from 61% in 1997 and 28% in 1994. The consulting firm also noted that on average sponsors offered employees ten investment options.





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