Workers upped 401(k) contributions in ’08

Fidelity analyzed its 17,095 corporate 401(k) plans, which represent more than 11 million participants.

The firm found that 2008 participants contributed an average of $5,600 in pre-tax earnings to their 401(k) accounts — slightly higher from the 2007 average of $5,500.

Almost all workers (96%) continued to contribute to their plans, even in the difficult fourth quarter of 2008.

The firm stated that this percentage is in line with normal fourth-quarter activity, which typically experiences a slight dip in because participants have reached the Internal Revenue System limit for the year.

“Despite a complex set of financial issues that led to a severe economic and market downturn, workers in 2008 remained committed to saving for retirement through their 401(k) accounts, and engaged with us more in trying to better understand their risk tolerance and an appropriate asset allocation and diversification strategy,” Scott B. David, president of Workplace Investing for Fidelity Investments, said in a statement.

The percentage of active participants who took a 401(k) loan was also lower than 2007: In 2008, 9% of employees in a plan initiated a loan, compared with 9.7% in 2007.

However, 1.6% of participants took hardship withdrawals in 2008, compared with 1.6% in 2007.