T. Rowe Price T. Rowe Price Trusty Logo

Reference Point

Executive Summary

T. Rowe Price Defined Contribution Plan Data

T. Rowe Price

As of December 31, 2018

After several years of record-breaking plan and participant outcomes, 2018’s market turbulence may have contributed to a rise in concerning participant behavior. But strategic plan design continued to produce strong plan and participant outcomes despite the uncertainty, resulting in 2018 being a year of mixed results.

10-YEAR HIGH
8.6%
plan-weighted average
pretax deferral rate

Contributing factors:

  • Increasing default deferral rates
  • Opt-out option for auto-increase
  • Targeted messaging to participants

Plan design continues to drive positive outcomes for participants:

  • Participation rates were nearly 96% higher for plans with autoenrollment, and usage of auto-increase was nearly five times higher in plans that employ the opt-out option.
  • Nearly 37% of auto-enrollment plans have a default deferral rate of 6% or higher compared with nearly 33% at a 3% default.
  • Employer match rates generally increased in 2018, and the 4% top effective match rate surpassed the 3% rate for the first time.
  • Participants who saved less in 2018 decreased their deferral rates by a greater amount than those who increased their deferral rates.
  • Loan usage reached a six-year low, while hardship withdrawals fell for the ninth year in a row.

INCREASE
36%
in cash-out distributions

Contributing factors:

  • Uncertainty about the markets
  • Increased distributions of small account balances

 

 

But turbulence contributed to reduced outcomes in several areas:

  • The participant-weighted participation rate dropped by nearly 2% from 2017 to 2018.
  • The percentage of participants contributing 0% increased to 36%.
  • Average account balances decreased by almost 8%, in part because of year-end market declines.
  • Late in the year, participants moved money from stocks to more conservative investments, presumably due to market activity.

This material is provided for general and educational purposes only, and is not intended to provide legal, tax or investment advice. This material does not provide fiduciary recommendations concerning investments or investment management; it is not individualized to the needs of any specific benefit plan or retirement investor, nor is it directed to any recipient in connection with a specific investment or investment management decision.T. Rowe Price Retirement Plan Services, Inc.

CVGYSPOJ9
|201904-801168

 

Dismiss
Tap to dismiss

Download

Latest Date Range
Audience for the document: Share Class: Language of the document:
Download Cancel

Download

Share Class: Language of the document:
Download Cancel
Sign in to manage subscriptions for products, insights and email updates.
Continue with sign in?
To complete sign in and be redirected to your registered country, please select continue. Select cancel to remain on the current site.
Continue Cancel
Once registered, you'll be able to start subscribing.

Change Details

If you need to change your email address please contact us.
Subscriptions
OK
You are ready to start subscribing.
Get started by going to our products or insights section to follow what you're interested in.

Products Insights

GIPS® Information

T. Rowe Price ("TRP") claims compliance with the Global Investment Performance Standards (GIPS®). TRP has been independently verified for the twenty one- year period ended June 30, 2017 by KPMG LLP. The verification report is available upon request. Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm's policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. Verification does not ensure the accuracy of any specific composite presentation.

TRP is a U.S. investment management firm with various investment advisers registered with the U.S. Securities and Exchange Commission, the U.K. Financial Conduct Authority, and other regulatory bodies in various countries and holds itself out as such to potential clients for GIPS purposes. TRP further defines itself under GIPS as a discretionary investment manager providing services primarily to institutional clients with regard to various mandates, which include U.S, international, and global strategies but excluding the services of the Private Asset Management group.

A complete list and description of all of the Firm's composites and/or a presentation that adheres to the GIPS® standards are available upon request. Additional information regarding the firm's policies and procedures for calculating and reporting performance results is available upon request

Other Literature

You have successfully subscribed.

Notify me by email when
regular data and commentary is available
exceptional commentary is available
new articles become available

Thank you for your continued interest