note that allocation percentages are based on plan assets as of mid-1996
rather than the contributions made during 1996. The Money Market Di-
rectories do not include the allocation of the annual contributions (and we
have been unable to locate a source of such data). This limitation creates
some problems for our analysis that we discuss below.
The average participant has accumulated retirement funds of $32,044
($49.99 billion in assets divided by 1.56 million participants), which is re-
markably similar to the $32,010 figure reported by Access Research (1996).
The average annual contribution per participant is $2,073 ($3.23 billion
contributions divided by 1.56 million participants).
The average number of investment options available to the participants is
6.8. Two plans offer one investment fund only, and one plan offers as many
as twenty-one funds. (We exclude from our analysis below the eight plans
that offer less than four options.) We assume that hybrid funds, such as
asset-allocation and multiasset options, are invested half in equities and
half in fixed-income securities.^10 The average number of equity-type op-
tions offered is 4.2, with a range from 0 to 14.5. Thus, 61.76 percent of all
the available investment options are equity options (4.2 divided by 6.8).
With three exceptions, it is always the case that at least half of the invest-
ment options are equities.
Table 16.5 displays the mean allocation to various asset classes. To ex-
amine where the “typical dollar” is invested, the allocations are weighted
by plan assets. The mean allocation to equities, defined as the combined
586 BENARTZI AND THALER
Table 16.5
Mean Asset Allocation for the MMD Sample of 401(k) Plans as of 6/30/96Plans Not Offering Plans Offering
Company Stock as Company Stock as
an Investment an Investment All Plans
Type of Investment Option (N=103) Option(N=67) (N=170)
Money market 7.06% 3.14% 4.74%
Stable value 33.16 10.24 19.61
Bonds 4.26 9.64 7.44
Company stock 0.00 41.98 24.81
Domestic equity 45.95 27.41 34.99
International equity 3.24 1.85 2.42
Multi-asset 4.63 0.86 2.40
Other 1.66 4.84 3.54
Total 100.00 100.00 100.00
Note: The mean allocation is weighted by plan assets.(^10) Assuming that hybrid funds are either 25 percent or 75 percent in equities does not affect
any of the results reported in this paper.