The Hewitt 401(k) Index™ Observations - Hewitt Associates - Human Resources Consulting and Outsourcing - HR Outsourcing

2009	0.03%	0	43%
2008	0.06%	5	76%
2007	0.05%	5	58%
2006	0.03%	2	75%
2005	0.04%	2	48%
2004	0.03%	1	71%
2003	0.07%	1	52%
2002	0.08%	3	60%
2001	0.12%	7	80%
2000	0.08%	3	60%
1999	0.06%	2	40%
1998	0.06%	6	71%
1997	0.04%	2	38%

401(k) participants continued to slowly and modestly transfer assets from fixed income investments back into equities, according to the results of the Hewitt 401(k) Index™. Total transfers for the month of September were again equity-oriented. However, flows overall have been relatively small, as only 1% of total assets have shifted from fixed income to equity investments since April 2009. On the other hand, 6% of assets transferred from equities to fixed income between January 2008 and March 2009.
In September, a total of $138 million moved from fixed income to equities. Nearly 70% of the transfers came from stable value funds. This asset class lost $232 million in net transfers in September, $448 million for the quarter.
During the 3rd quarter, $577 million moved into diversified equities (equities excluding company stock). However, after including company stock, we saw the total equity inflows reduced to $87 million due to large outflows from company stock funds. In fact, the biggest loser of the quarter was company stock, with a total of $490 million transferring out of these funds.
Bond, lifestyle, and international funds are the asset classes with the largest inflows in September and for the quarter. Bond funds received $104 million in September, and $273 million for the quarter. Lifestyle funds had inflows of $82 million in September, and $300 million during the 3rd quarter. International funds received $75 million in September, and $193 million for the quarter.
As for the volume of transfers, September showed the lowest participant activity level in 401(k) plans so far this year. Only 0.03% of balances transferred on a net daily basis. None of the days in the month had an above-normal level* of transfer activity.
Participants' overall equity holdings increased 1% to 57.2% by the end of September. It was up 3.6% for the quarterly, primarily due to strong stock market returns.
Employee-only equity contributions also increased 0.7%, from 57.9% at the end of August to 58.6% at the end of September. For the quarter, they were up 1.8%.

*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 September 2009:

Index Returns