Participants in 401(k) plans have a larger proportion of assets in equity funds than in GIC funds, a new study by Foster Higgins reports. This is the first year equities outflanked GICs since the annual survey began in 1990, the consulting firm said.
Equities hold 40% of participant balances, up from 35% last year, and GICs hold 33%, down dramatically from 42%. The most popular equity fund is the actively managed domestic growth fund, offered by 78% of plan sponsors, up from 72% in 1995. The study also indicates there has been a slight decline in 401(k) participation rates to 76% at the end of 1995 from 78% the year before.