Despite pressure from the financial crisis, 401(k) accounts have grown. A recent study by the Employee Benefit Research Institute found that accounts of consistent 401(k) participants grew 6.8% annually during the five years that included the financial recession, largely due to the expanding role of target-date funds in defined contribution accounts. Benefit advisers and brokers have a large role to play in presenting their employer clients with the pros and cons of 401(k) strategies, such as automatic enrollment and target-date features.
We keep finding incredible persistence that if you have somebody automatically enroll and place them in a target-date fund on day one, they will typically stay there,” says Jack VanDerhei, EBRI research director and co-author of the study.
