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Defined Contribution

ICI: DC participant withdrawals stay low in 2017 as contributions hold steady

Defined contribution plan participants continued saving for retirement in 2017, with withdrawal activity remaining very low and participants maintaining contributions to their plans, the Investment Company Institute said in a report released Thursday.

In 2017, only 3.4% of DC plan participants took withdrawals, compared to 3.3% in 2016 and 3.4% in 2015. Only 1.7% of participants took hardship withdrawals during the year, compared to 1.5% in 2016 and 1.6% in 2015.

Only 2.7% of participants stopped contributing to their plans in 2017, the same as the previous year. Only 2.6% of participants stopped contributing in 2015.

Loan activity was lower in 2017, with 16.7% of participants having loans outstanding as of Dec. 31, compared to 17% a year earlier and 17.4% at the end of 2015. Despite the continuing drop, loan activity does remain higher than year-end 2008 as the financial crisis began to take hold, when only 15.3% had loans outstanding.

Reallocation activity, meanwhile, dropped slightly, with 9.3% of plan participants changing the asset allocation of their account balances in 2017, compared to 9.4% in 2016 and 9.7% in 2015. In 2017, 5.5% of participants changed the asset allocation of their contributions, down from 5.6% in 2016 and 7.6% in 2015.

ICI analyzed record-keeper data covering more than 30 million DC plan participant accounts.

The report is available on ICI's website.