Fidelity^® Releases Quarterly Snapshot On 401(k)s Showing Average Savings Inched Higher in 2011

BOSTON – Fidelity Investments^® today released its latest data¹ on 401(k) savings and behaviors which showed that the average employee contribution rose slightly in 2011 to $5,750, up from $5,680 a year ago, as participants on average continued to save more than 8 percent² of their annual salaries. As of the end of the fourth quarter 2011, the average 401(k) balance was $69,100, up nearly 8 percent from the end of the third quarter³.

“It’s very encouraging that savings levels actually held up during the intense market volatility of last year and a sluggish economic environment,” said James M. MacDonald, president, Workplace Investing, Fidelity Investments. “Increases in savings levels, however small, can make a significant impact over time.”

This snapshot into Fidelity’s 401(k) savings is based on the company’s 11.6 million 401(k) participant accounts, the largest in the industry⁴.

Additional key metrics from the fourth quarter 2011 and full year include:
• More participants benefited from employer contributions: Eighty-two percent of active participants received employer contributions – typically a company match or profit sharing – during 2011, up from 79 percent in 2010. Seventy-five percent of employers made contributions to eligible participants last year, averaging $3,270, up from $3,170 the year before.

• Target date funds helped drive improved diversification and asset allocation: One-in-four participants invested 100 percent of their 401(k) assets in this option, with nearly half of participants age 35 or younger investing all their plan assets in the option. Diversified , age-based target date funds, such as Fidelity Freedom Funds^®6, remain extremely popular with 98 percent of plans now offering such options. Of participants who were in a plan for 10 years⁷ and took on more risk⁸ in their investment portfolio than their applicable age-based Freedom Fund, 62 percent underperformed⁹ the Fund over the time period¹⁰.

• Very few participants made exchanges last year: Only one in ten participants made an exchange – the transfer of money from one investment option to another – during a year of significant market volatility, down from 15 percent in 2006. Much of the reduction in exchanges may be attributed to the increased use of target date funds and an appreciation of a long-term, steady approach to retirement saving. Over the past few quarters, when investors made exchanges, more assets moved out of equities toward conservative holdings such as short term, stable value and fixed income options.

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Media-ready infographic about contribution levels available to download
To download a graphic on the growth of 401(k) participant and employer contributions, click: http://go.fidelity.com/401kfacts

About Fidelity Investments
Fidelity Investments is one of the world’s largest providers of financial services, with assets under administration of $3.4 trillion, including managed assets of $1.5 trillion, as of December 31, 2011. Founded in 1946, the firm is a leading provider of investment management, retirement planning, portfolio guidance, brokerage, benefits outsourcing and many other financial products and services to more than 20 million individuals and institutions, as well as through 5,000 financial intermediary firms. For more information about Fidelity Investments, visit www.fidelity.com.

 1 All Fidelity business data as of December 31, 2011 unless otherwise stated.

2 Average annual elective deferral rate of a corporate defined contribution participant.

3 Account balance growth results from both participant activity (including contributions) and market activity.

4 PlanSponsor DC Recordkeeping Survey, June 2011, and Cerulli Edge Retirement Edition, Fourth Quarter 2011.

5 Diversification/asset allocation does not ensure a profit or guarantee against loss.

6 Fidelity Freedom Funds are designed for investors expecting to retire around the year indicated in each fund's name. Except for the Freedom Income Fund, the funds' asset allocation strategy becomes increasingly conservative as it approaches the target date and beyond. Ultimately, they are expected to merge with the Freedom Income Fund. The investment risks of each Fidelity Freedom Fund change over time as its asset allocation changes. They are subject to the volatility of the financial markets, including equity and fixed income investments in the U.S. and abroad and may be subject to risks associated with investing in high yield, small cap and, commodity-related, foreign securities. Principal invested is not guaranteed at any time, including at or after their target dates.

7 The population for this 10 year participant analysis represents a subset of approximately 1.9 million of our overall 11.6 million corporate defined contribution participants.

8 "Risk” is the standard deviation of returns, a measure of the volatility of returns. “Applicable” Freedom Fund is the one with the closest target date given the participant’s date of birth, assuming a retirement age of 65.

9 All returns discussed represent past performance, which does not guarantee future results. Investment return and principal value of an investment will fluctuate; therefore, you may have a gain or loss when you sell your shares. Current performance may be higher or lower than the performance stated. To learn more or to obtain the most recent month-end performance, call Fidelity or visit www.401k.com (log in, choose plan, select “Investment Choices & Research”, and then pick investment option). Participant returns are cumulative for the period indicated and are based on a time-weighted investment return formula that eliminates the effect of participants' cash flows during the entire return period. The formula is intended to reflect the performance of the managers of the underlying investments rather than the actual returns of investors who may have bought and sold the investments at different times over the return period. Returns that take into account the effect of participant cash flows during the return period (i.e. dollar weighted returns) could be significantly different from these time-weighted returns. The longer the return period, the larger the cash flows and the more volatile the investment, the greater the potential difference between the two types of returns. Plan returns were calculated based on aggregate plan assets, not individual participant returns. Freedom Funds returns were calculated pursuant to SEC rules. All returns are historical and include change in share value and reinvestment of dividends and capital gains, if any.

10 Performance against the participant’s age-based Freedom Fund.

11 Reference Piece 606202.1.0.

Before investing in any mutual fund, please carefully consider the investment objectives, risks, charges, and expenses. For this and other information, contact Fidelity for a free prospectus or, if available, a summary prospectus. Read it carefully before you invest.

It is your responsibility to select and monitor your investments to make sure they continue to reflect your financial situation, risk tolerance, and time horizon. Most investment professionals suggest that you reexamine your investment strategy at least annually or when your situation changes. In addition, you may want to consult an investment adviser regarding your specific situation.
 
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