More American DC plan members are investing in target-date funds (TDFs) over time.
A report by the Employee Benefit Research Institute and the Investment Company Institute finds that 41% of DC plan members held TDFs at the end of last year, up from 39% at the end of 2012 and 19% in 2006.
TDF use varies across age groups. At year-end 2012, 52% of plan members in their 20s had TDFs, compared with 34% of participants in their 60s.
The report also finds that 61% of DC plan members’ accounts were invested in equities—through equity funds, the equity portion of TDFs, the equity portion of non-target-date balanced funds and company stock.
Younger plan participants had higher concentrations in equities—nearly three-quarters of DC assets among participants in their 20s or 30s—compared with older participants. Participants in their 60s had less than half of their 401(k) assets invested in equities.
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