Fidelity says 401(k) balances reached highest level last quarter

By Margaret Collins
Bloomberg News

NEW YORK - Fidelity Investments, the largest provider of 401(k) retirement plans, said average balances in employer-sponsored accounts reached the highest level since it began tracking values in 2000, as market gains boosted assets.

The average account balance in the U.S. rose to $75,900 as of the third quarter, an increase of 18 percent from a year earlier, according to a report released today by the Boston- based Fidelity, which administers plans for about 12 million workers.

“We’ve had a good quarter, a good year,” said Beth McHugh, vice president of market insights for Fidelity. “The biggest driver in the increase this quarter was the market.”

The Standard & Poor’s 500 Index gained 27 percent in the 12 months ended Sept. 30. About 74 percent of the average-balance growth in that period was driven by market appreciation and 26 percent was from participant contributions, according to Fidelity.

A 401(k) generally lets employees contribute a portion of their wages to the account on a pretax basis. Contributions are limited to $17,000 for 2012 and $17,500 in 2013. Those age 50 or older may set aside an additional $5,500, according to the Internal Revenue Service.

The average annual savings by workers was $5,900 as of Sept. 30, compared with $5,500 in the third quarter of 2007, the report said. Employer contributions, also known as a company match, rose 19 percent to $3,420 in the same period.

Americans held $3.3 trillion in 401(k) plans as of June 30, according to the latest data available from the Investment Company Institute. The ICI is the Washington-based trade group for the mutual-fund industry.