The average 401(k) retirement account rose nearly 32%, 31.9%, in 2009, according to a report issued Monday by the Employee Benefit Research Institute and the Investment Company Institute. The average balance among those who consistently contributed to their 401(k) plan reached $109,723 at year-end 2009, up from $61.106 at year-end 2003—for an annual growth rate of 10.5%.

The increases reflect ongoing contributions by workers and employers, investment gains and losses and loan or withdrawal activity. While 401(k)s held by consistent participants rose 31.9% in 2009, the Standard & Poor’s 500 Index rose 26.5% and the Russell 2000 Index rose 27.2%.

The findings are based on a database of 20.7 million participants, 4.3 million of whom are consistent participants who had 401(k) accounts with the same 401(k) plan between 2003 and 2009.

“Looking at consistent participants provides insights into the powerful impact of ongoing participation in 401(k) plans,” said Sarah Holden, ICI senior director of retirement and investor research. “Retirement savers, by continuing to invest paycheck by paycheck, saw the benefits of being in the market in 2009, as stock values generally climbed during the year.”

EBRI and ICI also found that at year-end 2009, 21% of 401(k) participants in plans offering loans had outstanding loans, up fro 18% at year-end 2008. The share of 401(k) accounts invested in company stock continued to shrink, falling by half of a percentage point to 9.2% in 2009—continuing a steady decline that started in 1999.

The bulk of investors’ money, 60%, is in stocks. Another 36% was in fixed income securities, including stable value, bond and money market funds. At year-end 2009, 33% of participants held target-date funds, and nearly 10% of the assets in the EBRI/ICI 401(k) database was in target-date funds.

“401(k) participants continued to embrace target-date fund investing in 2009,” said Jack VanDerhei, director of research at EBRI. “Although target-date funds represent only one-tenth of 401(k) assets, the data highlight the significant role that they play in individual participants’ accounts, particularly recently hired and younger employees who are increasingly using target-date funds to save for retirement.”

The data shows a tremendous growth in target-date or other balanced funds in the past 11 years, with 42% of the balances of recently hired participants in their 20s in balanced funds in 2009, up from 36% in 2009 and 7% in 1998. In target-date funds themselves, 31% of the account balances of recently hired employees in their 20s was in these funds in 2009, up from 23% in 2008.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.