ADP Advisor ®
Winter 2009 | Volume 20 No. 1
401(k) myths exposed
One of the 401(k) myths debunked by the Investment Company Institute (ICI) is that Americans are
bailing out of their 401(k) plans due to the economic situation. On the contrary, says the ICI, only
3% of plan participants had discontinued contributions by October 2008, and less than 4% had
taken withdrawals from participant-directed retirement plans.
Another myth addressed by the ICI is that 401(k) savers have experienced far greater losses
than other retirement investors. Market turmoil has affected all long-term savings plans, notes the
ICI. IRA assets were down 13% in 2008, defined benefit assets were down 14%, and the S&P 500
total return index was down 19%. However, 401(k) assets fell by only 11%.
The ICI’s report, 10 Myths About 401(k)s — And the Facts, addresses ten negative
perceptions about 401(k) plans. The purpose is to counter media reports casting 401(k) plans
in a poor light as a result of the financial crisis. Each myth is identified, and statistics and survey
results are presented to reflect the facts.
To download the full report, visit www.ici.org and search “myths.” For information on ADP Retirement Services
offerings, call 1 800 432-401k, Promo Code 454; or visit www.ADP.com.