Median defined contribution plan balances accounted for a larger share of families' financial assets between 2007 and 2010, even though those balances decreased during this period, according to new EBRI research issued Wednesday.
Median DC balances slipped 7.7% to $29,000 in 2010 vs. $31,431 in 2007, said the EBRI research report which is based on the Federal Reserve Board's latest triennial survey of wealth called “The Survey of Consumer Finances.”
Meanwhile, all DC plans accounted for 61.4% of families' total financial assets in 2010 vs. 58.4% in 2007.
“Defined contribution is increasing in importance even as overall wealth declined,” Craig Copeland, senior research associate at the Employee Benefit Research Institute and author of the report, said in an interview.
Based on current and other research, the EBRI report warned that “many Americans are facing the likelihood of not having sufficient income in retirement unless they increase their savings, work longer or significantly decrease their expenditures in retirement if they hope to make ends meet.”
Among the report's findings, EBRI said:
- The percentage of families with a member in any employment-based retirement plan from a current employer — defined benefit or defined contribution — fell to 37.9% in 2010 vs. 40.6% in 2007.
- The percentage of heads of families who were eligible for DC plans and who chose to participate remained essentially flat – 78.2% in 2010 vs. 78.8% in 2007.
- The percentage of families with an IRA or Keogh plan dropped to 28% in 2010 compared to 30.6% in 2007.
The full report is available on the EBRI website.