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In 2011, 18% of participants had an outstanding loan, unchanged from the year before. Only 4% of participants took an in-service withdrawal; weak economic conditions appeared to be affecting the withdrawal behavior of a very small group of participants. In addition, participants separating from service largely preserved their assets for retirement. During 2011, about 30% of all participants could have taken their account as a distribution because they had separated from service in the current year or prior years. The majority of these participants (83%) continued to preserve their plan assets for retirement by either remaining in their employer’s plan or rolling over their savings to an individual retirement account (IRA) or a new employer plan. They preserved 96% of the available assets. With the intensifying focus on plan fees, plan sponsors are increasingly interested in offering a wider range of low-cost index funds, including an “index core,” a comprehensive set of low-cost index options that span the global capital markets. In 2011, 44% of Vanguard plans offered a set of options providing an index core. Because large plans have adopted this approach more quickly, slightly more than half of all Vanguard participants were offered an index core as part of their plan’s overall investment menu. “How America Saves” is based on an analysis of Vanguard’s full-service recordkeeping plans. Along with looking at the overall retirement saving and investing behavior of Vanguard’s more than three million participants, “How America Saves” this year includes supplemental reports on participant patterns in the defined contribution (DC) retirement plans of 12 specific industries. The “How America Saves 2012” report is at http://www.vanguard.com/has2012.
In 2011, 18% of participants had an outstanding loan, unchanged from the year before. Only 4% of participants took an in-service withdrawal; weak economic conditions appeared to be affecting the withdrawal behavior of a very small group of participants. In addition, participants separating from service largely preserved their assets for retirement. During 2011, about 30% of all participants could have taken their account as a distribution because they had separated from service in the current year or prior years. The majority of these participants (83%) continued to preserve their plan assets for retirement by either remaining in their employer’s plan or rolling over their savings to an individual retirement account (IRA) or a new employer plan. They preserved 96% of the available assets.
With the intensifying focus on plan fees, plan sponsors are increasingly interested in offering a wider range of low-cost index funds, including an “index core,” a comprehensive set of low-cost index options that span the global capital markets. In 2011, 44% of Vanguard plans offered a set of options providing an index core. Because large plans have adopted this approach more quickly, slightly more than half of all Vanguard participants were offered an index core as part of their plan’s overall investment menu.
“How America Saves” is based on an analysis of Vanguard’s full-service recordkeeping plans. Along with looking at the overall retirement saving and investing behavior of Vanguard’s more than three million participants, “How America Saves” this year includes supplemental reports on participant patterns in the defined contribution (DC) retirement plans of 12 specific industries.
Rebecca Mooreeditors@plansponsor.com