The average 401(k) account balance consistently held since 2003 fell 24.3 percent in 2008, a report authored jointly by the Employee Benefit Research Institute and the Investment Company Institute revealed. That figure includes not only investment losses and gains, but also employee and employer contributions. The S&P 500 was down 37 percent in 2008.

At the end of 2008, the average balance for those who held accounts since at least 2003 was $86,513.

The pain was greater when all plans, including new ones, are included in the data: the average drop in 2008 was then 30.5 percent, and the average balance at the end of 2008 was $45,519. But report co-author Jack VanDerhei of EBRI told The MFWire that such data, since it included statistics from new plans, was not as representative as the data that included only accounts held consistently for five years.

In the five-year period ending in 2008, the average 401(k) account balance increased at an average annual rate of 7.2 percent.

Equities made up 56 percent of all assets in 401(k)s, and fixed-income securities constituted 41 percent of assets.

The report also found that target-date funds have significantly grown in popularity. Seven percent of assets in 401(k)s were invested in target dates and 31 percent of participants held such funds. The percent of assets in plans of recently hired participants in their 20s that were invested in target dates grew from nearly 19 percent in 2007 to almost 23 percent in 2008. 

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