Defined contribution plan participants stayed the course with their accounts as withdrawals, hardship withdrawals and discontinuation of contributions remained low during the first quarter of 2013, according to a quarterly report by the Investment Company Institute.
For the first quarter of 2013, the ICI report said 1.3% of participants took withdrawals and 0.4% took hardship withdrawals. For the same period last year, the respective rates were 1.2% and 0.4%.
“DC plan assets are specially earmarked for retirement, and individuals tend to try to preserve them for that goal,” said Sarah Holden, senior director of retirement and investor research at ICI, in an e-mailed response to questions. “Reflecting that mindset, withdrawal activity tends to run at very low levels in DC plans.”
The ICI report said 1% of participants stopped making contributions during the first quarter of 2013, the same percentage as in the first quarter of last year. “It is possible that some of these participants stopped contributing simply because they reached the annual contribution limit,” the report said.
The report also said 17.9% of participants had outstanding loans for the quarter ended March 31, the same percentage as for the first quarter of 2012.
The ICI report is based on record-keeper data covering approximately about 24 million defined contribution plan participant accounts.