• As the major stock indexes closed the month down 14% to 21%, participants' transfer activity level was significantly higher than usual, according to the results of the Hewitt 401(k) Index™. Ten days of the month experienced above normal* level of transfer activities. On average, 0.10% of balances were transferred on a net daily basis, which is twice as much as the trailing average of the past 12 months. The last time the index had such high level of transfers was in late 2002. In addition, a total of 1.25% of balances was transferred on a net basis during October, which is 2.7 times the historical average (0.46%).
  
• In dollar terms, the direction of the transfers were strongly fixed income oriented. During October, participants moved $776 million from equities to fixed income investments. Interestingly, on a daily basis, only 57% of the days were fixed income oriented.
  
• Similar to the past few months, GIC/stable value received the largest amount of inflows in October, with $1 billion moving to this asset class, which represented 76% of the net transfers for the month. Company stock funds also received large inflows of $233, followed by money market funds ($85 million).
  
• Nearly all the equity asset classes experienced outflows (except company stock funds). As the MSCI EAFE Index dropped by 20%, international funds were the biggest loser, with $279 million transferring out of this asset class. Lifestyle funds also had $258 million moving out, which continues an outflow trend since mid-2008. Balanced funds also had $216 million of outflows, while large U.S. equity funds lost $208 million.
  
• Due to both negative market return and participant transfers, the overall equity allocation in the 401(k) index dropped 5% during the month, to 53.8%. This is the lowest equity allocation ever, since the beginning of the 401(k) index in 1997.
• Participants discretionary contributions (employee only contributions) also declined by 2.5% to 59.9% to a record low.

*A "normal" level of relative transfer activity is when the net daily movement of participants' balances as a percent of total 401(k) balances within the Hewitt 401(k) Index equals between 0.3 times and 1.5 times the average daily net activity of the preceding 12 months. A "high" relative transfer activity day is when the net daily movement exceeds two times the average daily net activity. A "moderate" relative transfer activity day is when the net daily movement is between 1.5 and two times the average daily net activity of the preceding 12 months.

The following tables show Hewitt 401(k) Index statistics and the returns of major market indices for the month of October 2008:

Dow Jones IA	-13.97%
Russell 2000	-20.80%
Lehman Aggregate	-2.36%
S&P 500	-16.79%
MSCI EAFE	-20.18%
NASDAQ	-17.35%

Number of Fixed Income Days	13
Number of Equity Days	10
Percent of Equity Days	43%