401(k) Contributions Drop in Troubled Economy
The 152 advisors that responded to the online survey, conducted in May, reported that 89 percent of plan participants are continuing to save and 85 percent of plan sponsors are continuing to provide matching contributions.
June 20, 2008
401(k) Contributions Drop in Troubled Economy
While workers continue to put money into their 401(k) plans during the
current downturn in the economy, they are investing at a lower rate, according
to a survey released Thursday, June 19, by Putnam Investments.
The 152 advisors that responded to the online survey, conducted in May,
reported that 89 percent of plan participants are continuing to save and 85
percent of plan sponsors are continuing to provide matching contributions.
But 21 percent of participants are now contributing at a lower rate and
4 percent have stopped altogether.
Putnam also found that target-date
funds are strongly favored by plan advisors and consultants as they choose the
qualified default investment alternative option.
In selecting target
date funds, asset allocation was the most critical factor, followed by expense
ratios and glide path, the respondents indicated.
Respondents also said
that open architecture within bundled plans continues to be a priority.
A
full 49 percent of the advisors and consultants indicated they serve as
fiduciaries on the plans they manage.
The Boston-based fund firm had $175
billion in assets under management as of May 31.
Filed by Sue Asci of Pensions & Investments, a sister publication
of Workforce Management. To comment, e-mail editors@workforce.com.
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