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ARCHIVE
It’s National 401(k) Day!
By Sarah Holden
September 8, 2017
On the first Monday in September, America celebrates Labor Day—our annual national holiday honoring the contributions that American workers have made to the country. On the following Friday, we end the holiday week with a day that reminds American workers to think about contributions to their retirement plans.
As in previous years, ICI is marking National 401(k) Day by spotlighting the strengths of 401(k) plans and their role in the American retirement system, and by reminding workers to get the most of their own 401(k) plans.
If you’re one of the many millions of American workers who is focused on saving in a 401(k) plan, ICI has resources to help you learn more about one of the nation’s most successful retirement saving tools—plans that hold $5.0 trillion in assets on behalf of about 55 million active participants and millions of former employees and retirees.
Here are a few of those resources:
- FAQs on the basics of 401(k) plans, which offer guidance on what exactly a 401(k) plan is and how it works, including information about employer matches, vesting, withdrawals, required minimum distributions, and catch-up contributions.
- FAQs on ICI’s 401(k) plan research, which offer information about the 401(k) plan market and participant activity.
- Ten Important Facts About 401(k) Plans, which offer a collection of interesting facts pulled from ICI’s research papers and data collections.
For more information about 401(k) plans, see ICI’s 401(k) Resource Center, where we have all of the above resources and more, including videos, news releases, and policy statements. Also, follow us on social media—including Facebook, Twitter, and LinkedIn—to receive information about top news stories on the industry, notices of ICI releases, and stories on 401(k)s and retirement.
Sarah Holden is ICI’s senior director of retirement and investor research.
TOPICS: 401(k)Investment EducationRetirement Research
Americans Trust in Their 401(k) Plans
By Sarah Holden
July 7, 2017
Defined contribution (DC) plans have long been a key component of Americans’ retirement savings. And with more than $5 trillion in assets and about 54 million active participants, 401(k) plans are the most common type.
TOPICS: 401(k)Fund RegulationInvestor ResearchMutual FundRetirement Research
2017 Investment Company Fact Book: Letter from the Chief Economist
By Brian Reid
April 27, 2017
Have you ever tried to put a jigsaw puzzle together without knowing what the finished work should look like? It’s difficult—even with help from family and friends. Are those blue pieces part of a peaceful lake or a cloudless sky? Are those dark pieces a forest floor or storm clouds brewing on the horizon? Without the completed picture on the puzzle box as a guide, everyone has their own idea of what the completed work will look like and how to put it together.
TOPICS: Financial MarketsFund RegulationGovernment AffairsInvestor ResearchMutual FundPolicy ResearchRetirement PolicyRetirement ResearchShareholder
Scratch That: Why Arguments of a Broken Retirement System Are Misguided
By Peter J. Brady
April 6, 2017
What if you were given the task of designing a retirement system from scratch? In a recent paper, New York University law professor David Kamin proposes a retirement system that combines a mandatory savings floor with tax incentives to encourage savings above the mandated minimum. He is not the first to propose a new mandatory retirement plan, with others proposing that either employers be required to offer a plan or workers be required to contribute to a plan.
TOPICS: 401(k)Investor ResearchMutual FundRetirement PolicyRetirement ResearchSavings
Exemptions from Investor Protections Put California Savers at Risk
By Paul Schott Stevens
March 22, 2017
The following ICI Viewpoints is a letter to the editor by Paul Schott Stevens, president and CEO of the Investment Company Institute, in response to an editorial published on March 8, 2017, in the Los Angeles Times.
TOPICS: 401(k)Investor ResearchMutual FundRetirement PolicyRetirement ResearchSavingsShareholder
ICI Study: 55 Million US Households Own Mutual Funds
By Sarah Holden
February 24, 2017
Gathering and analyzing data about how shareholders purchase and use mutual funds are critical to ICI’s work to facilitate sound, well-informed public policies affecting funds, their investors, and the retirement markets.
TOPICS: 401(k)Investor ResearchMutual FundRetirement ResearchSavings
For “401(k) Pioneers,” No Reason for Regrets
By Paul Schott Stevens
January 10, 2017
The following ICI Viewpoints is a letter to the Wall Street Journal by Paul Schott Stevens, president and CEO of the Investment Company Institute, in response to an article published on January 3, 2017.
Dear Editor:
It may be, as you report, that “401(k) Pioneers Lament What They Started” (Page A1, Jan. 3). But the facts are clear: America’s retirement system is stronger today, in the expanding 401(k) era, than it was when defined benefit pensions were the primary vehicle for retirement savings.
TOPICS: Investor ResearchMutual FundRetirement PolicyRetirement ResearchSavingsShareholder
Ten Years After the PPA, the Path to Retirement Saving Is Easier
By Sarah Holden and Elena Barone Chism
August 22, 2016
Ten years ago, on August 17, 2006, President George W. Bush signed the Pension Protection Act (PPA) into law, with the goal of ensuring greater retirement security for American workers. With regard to defined contribution (DC) plans, such as 401(k) plans, PPA further encouraged automatic enrollment while paving the way for diversified default investments and the creation of Roth accounts inside DC plans. PPA also made permanent previously legislated contribution-limit increases and the saver’s credit.
TOPICS: 401(k)Government AffairsInvestor ResearchPolicy ResearchRetirement PolicyRetirement ResearchTaxes
Getting Started in a 401(k) Plan—and Getting the Most Out of It
By Christina Kilroy
February 26, 2016
This week, ICI and the Investment Company Institute Education Foundation (ICIEF) joined thousands of corporations, nonprofits, and government agencies to celebrate America Saves Week.
TOPICS: 401(k)Investment EducationInvestor ResearchRetirement ResearchSavings
How America Supports Retirement: The Incentive to Save Is Not Upside Down
By Peter J. Brady
February 25, 2016
In my new book, How America Supports Retirement: Challenging the Conventional Wisdom on Who Benefits, and the first three ICI Viewpoints in this series, I’ve demonstrated that Social Security’s benefit formula drives participation in tax-deferred employer-sponsored retirement plans ; that the full system of government support for retirement is progressive; and that those in higher tax brackets don’t enjoy greater “bang for their buck” from tax deferral.
TOPICS: 401(k)Government AffairsInvestor ResearchPolicy ResearchRetirement PolicyRetirement ResearchTaxes
How America Supports Retirement: What Do Tax Rates Have to Do with the Benefits of Tax Deferral? Less Than You Think
By Peter J. Brady
February 24, 2016
In my new book, How America Supports Retirement: Challenging the Conventional Wisdom on Who Benefits, I set out to gain a comprehensive view of how government policy supports American workers as they gather resources for retirement.
TOPICS: 401(k)Government AffairsInvestor ResearchPolicy ResearchRetirement PolicyRetirement ResearchTaxes
How America Supports Retirement: No, Benefits Are Not “Tilted” to the Higher Earners
By Peter J. Brady
February 23, 2016
Second in a series of ICI Viewpoints.
In my new book, How America Supports Retirement: Challenging the Conventional Wisdom on Who Benefits, I analyze the benefits individuals receive from the major government policies that help American workers accumulate resources for retirement: Social Security and tax deferral on compensation set aside for retirement in employer-based plans (both traditional pensions and defined contribution plans, such as 401(k) plans).
TOPICS: 401(k)Government AffairsInvestor ResearchPolicy ResearchRetirement PolicyRetirement ResearchTaxes
How America Supports Retirement: Tackling the Myths That Surround Us
By Peter J. Brady
February 22, 2016
America’s retirement system isn’t perfect but it’s a lot stronger than many people think. Whether by accident or design, the U.S. retirement system provides benefits to workers across the earnings distribution and has helped millions of retirees maintain their standard of living in retirement.
TOPICS: 401(k)Government AffairsInvestor ResearchPolicy ResearchRetirement PolicyRetirement ResearchTaxes
Correcting a Distorted Picture of Retirement Resources
By Peter Brady
October 21, 2015
Can 401(k) plans and individual retirement accounts (IRAs) provide the income that retirees need to supplement Social Security and enjoy a secure retirement?
TOPICS: EventsGovernment AffairsInvestor ResearchPolicy ResearchRetirement PolicyRetirement ResearchSavings
Small Savers at a Loss
By Brian Reid and Sarah Holden
September 25, 2015
As ICI has pointed out before, the proposed rule from the Department of Labor (DOL) to redefine what counts as a fiduciary relationship in the retirement market is fundamentally flawed. But it is no less flawed than the DOL’s justification for it—a Regulatory Impact Analysis that fails to demonstrate a market failure that supports the need for such a sweeping and costly rule.
TOPICS: Government AffairsInvestor ResearchPolicy ResearchRetirement PolicyRetirement ResearchSavings
2015 Investment Company Fact Book: Letter from the Chief Economist
By Brian Reid
May 4, 2015
A version of this letter by ICI Chief Economist Brian Reid was released today in our 55th edition of the Investment Company Fact Book.
This year marks the 75th anniversary of the Investment Company Act and the Investment Advisers Act—the key statutes under which mutual funds, exchange-traded funds (ETFs), closed-end funds, and unit investment trusts are regulated and governed. In 1940—the same year that Congress enacted these laws—the fund industry formed the National Committee of Investment Companies, the trade group that became the Investment Company Institute (ICI).
TOPICS: Financial MarketsFinancial StabilityFund RegulationInvestor ResearchPolicy ResearchRetirement ResearchTrading
Getting the Numbers Right on Investment Advice for Retirement Savers
By Brian Reid
February 26, 2015
As the Wall Street Journal noted this morning, ICI has deep concerns about the data used in a White House memorandum to support the Department of Labor’s push for tighter standards for financial advisers who help investors in employer plans—such as 401(k)s—and individual retirement accounts (IRAs).
TOPICS: Government AffairsMutual FundRetirement PolicyRetirement Research
What’s Driving Retirement Plan Access?
By Peter Brady
October 17, 2014
Most workers who are likely to have the ability to save and who are focused primarily on saving for retirement have access to an employer-sponsored retirement plan—and nearly all of these workers choose to participate.
TOPICS: Government AffairsInvestor ResearchPolicy ResearchRetirement PolicyRetirement ResearchSavings
Statement of the Investment Company Institute at Senate Finance Committee Hearing on “Retirement Savings 2.0: Updating Savings Policy for the Modern Economy”
By Brian Reid
September 16, 2014
This statement was given on behalf of ICI by Brian Reid, chief economist, at the Senate Finance Committee’s hearing on “Retirement Savings 2.0: Updating Savings Policy for the Modern Economy.” For more information, see ICI’s full written testimony.
TOPICS: 401(k)Government AffairsInvestor ResearchMutual FundRetirement PolicyRetirement ResearchSavingsTaxes
Happy Birthday ERISA! Congratulations on 40 Years
By Sarah Holden and Elena Barone Chism
September 2, 2014
Today marks the 40th birthday of the Employee Retirement Income Security Act (ERISA). Signed into law on September 2, 1974, ERISA introduced bold steps to safeguard Americans’ employer-sponsored pensions and created the individual retirement account (IRA). Assets earmarked for retirement totaled $0.4 trillion at year-end 1974 (see the figure below). At this modest start, private-sector defined benefit (DB) plans accounted for 35 percent of the total; federal, state, and local plans for 34 percent; private-sector defined contribution (DC) plans for 17 percent; annuities for 13 percent; and there was a mere glimmer of IRA assets by year-end. Currently, total U.S. retirement assets are $23.0 trillion, and their composition has shifted considerably over the past 40 years.
TOPICS: 401(k)Fixed IncomeGovernment AffairsInvestment EducationInvestor ResearchPolicy ResearchRetirement PolicyRetirement ResearchSavingsTaxesTreasury
Unconventional Wisdom on Retirement Preparedness
By Peter Brady
August 4, 2014
How well are Americans planning and saving for retirement? This is an important question to answer—but also vexingly difficult.
TOPICS: EventsGovernment AffairsInvestor ResearchPolicy ResearchRetirement PolicyRetirement ResearchSavings
The Real Lessons to Be Learned from 1994’s Bond Market
By Brian Reid
July 29, 2014
A recent “Heard on the Street” column in the Wall Street Journal (“Heeding 1994's Bond-Market Lesson,” July 27, 2014) is correct in saying that there’s a lesson to be learned from the 1994 bond market—but it draws the wrong lesson.
TOPICS: Bond FundBondsFederal ReserveFinancial MarketsFinancial StabilityFixed IncomeFund RegulationInterest RateMutual FundRetirement ResearchSavingsTradingTreasury
Some Facts About Roth IRAs and the Investors Who Use Them
By Todd Bernhardt
July 17, 2014
Since the individual retirement account (IRA) was created as part of the Employee Retirement Income Security Act of 1974 (ERISA), it has become a resounding success, accounting for the largest pool of assets in the U.S. retirement market. By the end of 2013, Americans held $6.5 trillion in IRAs, with 45 percent of that total—$3.0 trillion—invested in mutual funds.
TOPICS: Bond FundEquity InvestingFixed IncomeInvestment EducationInvestor ResearchMutual FundRetirement ResearchSavings
The Status of Global Retirement Savings: Taking Stock, Moving Forward
By Dan Waters
December 20, 2013
Around the world, as systems for building retirement resources come under increasing pressure, countries of every size and economic situation are facing long-term savings challenges. To meet these challenges, it is critical that pension industry experts, policymakers, and fund industry representatives learn from one another and share solutions that put the needs of savers first.
TOPICS: EventsICI GlobalInternationalRetirement PolicyRetirement Research
Yes, DC Follies Hurt Retirement Savers—But Let’s Not Overstate
By Brian Reid
October 10, 2013
“Debt ceiling follies” certainly do put retirement savers and their assets at risk. On that, ICI agrees with a recent Washington Post blog.
TOPICS: 401(k)Financial MarketsMutual FundRetirement ResearchSavings
CAP Claims About the 401(k) System Are Misguided
By Paul Schott Stevens
September 4, 2013
The concerns of the Center for American Progress about the 401(k) system (covered August 20 in “A Better Way to Save for Retirement?”) are mistaken.
TOPICS: 401(k)Retirement PolicyRetirement ResearchSavings
Featured Chart: 401(k) Participants Hold Lower-Cost Mutual Funds
By Sarah A. Holden
June 14, 2013
One key takeaway from ICI’s recent paper, The Economics of Providing 401(k) Plans: Services, Fees, and Expenses, 2012, is that 401(k) investors in mutual funds tend to hold lower-cost funds with below-average portfolio turnover.
TOPICS: Retirement Research
Americans Support Their 401(k)s
By Mike McNamee
April 25, 2013
It’s pretty obvious to anyone who reads ICI Viewpoints that we believe 401(k) plans are a successful part of an overall retirement system that is working for working—and retired!—Americans. But we’re far from the only ones who think so. Surveys show that Americans share this confidence in the 401(k) and support the key features of 401(k)s and other defined contribution (DC) plans.
TOPICS: 401(k)Retirement PolicyRetirement Research
The Facts on Fees and 401(k)s
By Mike McNamee
April 23, 2013
Consistently falling prices in a marketplace are usually a sign of competition and innovation.
TOPICS: 401(k)Retirement PolicyRetirement Research
The Facts on Limited Access to Retirement Funds Before Retirement
By Mike McNamee
April 22, 2013
One of the many strengths of the 401(k) system is its flexibility. Policymakers have built into 401(k) plans a careful mix of incentives that help workers save and preserve their savings for retirement—while still allowing limited access to their funds, in case of need, through hardship withdrawals and loans.
401(k) Plans Work in a Balanced Approach to Retirement Security
By Mike McNamee
April 19, 2013
What’s the outlook for American workers looking forward to retirement?
TOPICS: 401(k)Retirement PolicyRetirement Research
No Accident: The Strengths of the 401(k) System
By Mike McNamee
April 18, 2013
Americans have saved $5.1 trillion dollars in 401(k) and other defined contribution (DC) retirement plans—plus another $5.4 in individual retirement accounts (IRAs) that are funded largely by assets rolled over from DC and other employer retirement plans.
TOPICS: 401(k)Retirement PolicyRetirement Research
IRA Rollovers Serve Investors Well
By David Abbey and Sarah Holden
April 12, 2013
The U.S. Department of Labor (DOL) is preparing to reintroduce its controversial proposal to revise the long-standing definition of “fiduciary” under the Employee Retirement Income Security Act (ERISA).
Extra, Extra, Read All About It: Americans Are Preparing for Retirement
Mike McNamee
February 20, 2013
Data and academic research overwhelmingly show that Americans are taking care to prepare for retirement.
TOPICS: 401(k)Retirement Research
A Look at Traditional IRA Investors’ Withdrawal Activity
By Sarah A. Holden
July 31, 2012
When and how do households take withdrawals from their traditional individual retirement accounts (IRAs)? Shedding light on these questions is the goal of the latest installment of our IRA Investor Profile series, an ICI Research undertaking that analyzes account-level data of more than 7 million traditional IRAs.
TOPICS: Retirement Research
Article in The Week Misrepresents Americans’ View of 401(k)s
By Sarah Holden
April 26, 2012
Contrary to recent reporting by The Week (“401(k)s Are Failing Millions of Americans,” April 22, 2012), American workers both value their 401(k) retirement savings plans and are confident that 401(k)s will help them meet their retirement goals.
TOPICS: 401(k)Retirement Research
Featured Chart: Americans Say Retirement Saving Incentives Should Be a National Priority
By Sarah A. Holden
January 26, 2012
Stresses on the U.S. government budget have resulted in a reexamination of national priorities with respect to taxes and government spending. Against that backdrop, our survey of 3,000 U.S. households for our recent research report—America’s Commitment to Retirement Security: Investor Attitudes and Action—contained a new question. Households were asked: “Do you agree that continuing to provide incentives to encourage retirement saving should be a national priority?”
TOPICS: Retirement Research
Deloitte/ICI Study Shows Retirement Plan Fees Driven Primarily by Plan Size, Asset Allocation
By Sarah Holden
November 16, 2011
According to a comprehensive new study, primary factors driving fees in 401(k) and other defined contribution retirement plans are the number of plan participants and average participant account balance, as well as the allocation of plan assets to equity investment options.
TOPICS: 401(k)Policy ResearchRetirement Research
New York Times Editorial Misrepresents the Behavior of 401(k) Investors
By Brian Reid
August 23, 2011
Data Show Americans’ Commitment to Retirement Saving
By Sarah A. Holden
May 17, 2011
Despite the financial ups and downs of recent years, 401(k) participants have proven themselves both steady and committed to retirement saving.
ICI has a window into this commitment thanks to our surveys, conducted since 2008, of a cross section of recordkeeping firms representing a broad range of defined contribution (DC) plans and covering more than 23 million employer-based DC retirement plan participant accounts as of December 2010.
TOPICS: Retirement Research
Who Gets Retirement Plans and Why
By Peter Brady and Michael Bogdan
March 25, 2011
Most workers who are likely to have the ability to save and to be focused primarily on saving for retirement have access to employer-provided retirement plans, according to research we just released.
TOPICS: Retirement Research
Wall Street Journal Story Inaccurately Portrays the Role of 401(k) Plans
By Sarah A. Holden
February 24, 2011
The February 19 Wall Street Journal article, “Retiring Boomers Find 401(k) Plans Fall Short,” is based upon a narrow slice of statistics and anecdotes, painting an inaccurate portrait of the role of 401(k)s in retirement.
TOPICS: 401(k)Retirement Research
Factors Behind Recent Growth in Retirement Assets
By Sarah A. Holden
February 17, 2011
Last month, we published The U.S. Retirement Market: Third Quarter 2010. The report showed that U.S. retirement assets rose nearly $1 trillion, or 6.1 percent, to $16.6 trillion in the third quarter of 2010.
TOPICS: Retirement Research
New ICI Research Shows Americans’ Commitment to Retirement Security
By Sarah A. Holden
January 27, 2011
Following the start of the financial crisis, we began closely monitoring the behavior of investors in defined contribution retirement (DC) plans, as well as the views of U.S. households of those plans.
TOPICS: Retirement Research
New ICI Report Shows the Key Role IRAs Play in U.S. Retirement Saving
By ICI Viewpoints
December 1, 2010
Americans are accumulating significant resources in individual retirement accounts (IRAs) largely through rollovers from employer-sponsored retirement plans, according to an ICI report published today.
TOPICS: Retirement Research
EBRI/ICI: Average 401(k) Account Balance Among Consistent Participants Rose Nearly 32 Percent in 2009
By ICI Viewpoints
November 22, 2010
The average 401(k) retirement account rose 31.9 percent in 2009, according to a report released today by the Employee Benefit Research Institute (EBRI) and the ICI analyzing a group of consistent participants.
TOPICS: 401(k)Retirement Research
New ICI Study Finds Private-Sector Retirement Plans Play Increasingly Important Role Across All Incomes
By ICI Viewpoints
November 18, 2010
Data in a new ICI study show that across all income groups, private-sector retirement income is more prevalent among retirees today than in the mid-1970s.
TOPICS: Retirement Research
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