Average account balances in 401(k) plans remain 11% lower than 2007, according to Hewitt Associates.
Participants had account balances that averaged $70,970 in 2009, down from $79,570 in 2007, according to a Hewitt report based on a survey of almost 3 million employees.
Funds in 401(k) plans rose 24% last year from 2008 because of strong market returns, Hewitt said. The S&P 500 gained 23% in 2009. Contribution rates to 401(k) plans remained unchanged at 7.3% of wages last year compared with 2008, Hewitt said.
“Employees have to make retirement planning a priority and take more proactive steps to manage their plans — including rebalancing their portfolios, gradually increasing their contribution rates and paying attention to fees,” Pamela Hess, Hewitt’s director of retirement research, said in a statement.
The majority of employers, or 69%, that automatically enroll employees in their retirement plan put workers into target-date funds. These funds move money from riskier investments such as stocks to more conservative alternatives like bonds as an investor approaches retirement. They attracted $45 billion last year, according to Morningstar.