The average account balance of 401(k) investors that MassMutual administers fell 25% in 2008, but, nonetheless, participants are sticking with the plans.
In fact, thanks to automatic enrollment, the number of employees contributing to their 401(k)s is on the uptick.An additional 10% of companies adopted auto enrollment in 2008, MassMutual said.
However, contribution rates have fallen by a slight 1.6 percentage points, with older Americans in particular cutting back on their contributions.
Participants are checking their balances more frequently, though, with visits to MassMutuals participant website up 270% this past December from a year earlier. In October, call center volume rose 29% from October 2007.
With the market turbulence prompting more participants to pick up the phone, MassMutual Retirement Services temporarily extended its weekday call center hours by two hours per day beginning on Oct. 10, said Debbie Cote, assistant vice president and head of the firms call center. We also accepted calls on Saturdays in October and into November. The extended hours enabled call center representatives to answer 20% more calls than they normally would. This gave them the ability to spend additional time easing participant anxiety over the financial markets.
Cote added: Were pleased to see so many participants staying the course rather than reacting in a manner that is contrary to their overall retirement planning strategy.