How Saver and Employer Behaviors Are Evolving in Response to COVID-19

Proprietary data from Ascensus reveals how U.S. employees shifted their savings behaviors in March 2020, as the COVID-19 outbreak caused major disruption to the U.S. economy and financial markets.

The following insights serve as an early baseline of how contribution and withdrawal behaviors have evolved in response to the pandemic. However, we expect continued shifts and new trends emerge as we see the full impact of the CARES Act, which was signed into law on March 27, begin to flow through the economy and Ascensus’ savings plans.

Retirement Savings1

  • Dollars contributed to retirement plans by employers and employees in March were 26% lower and 19% lower than projected, respectively, based on year-over-year trends.2
  • This decrease in dollar contributions is partially a result of a 5% reduction in plans that contributed in March.2
  • Still, the number of employee distributions and new loans taken from retirement plans fell below monthly projections. Dollars requested per employee distribution and the number of employee hardship withdrawals aligned with monthly projections.3

Education Savings4

  • In the last two weeks of March, the average amount per qualified 529 withdrawal was 15% lower compared to the same period in 2019. This may be attributable to the pandemic’s impact on higher education, as some colleges and universities reduced fees when they transitioned to remote learning.
  • In the last two weeks of March, the average one-time contribution to a 529 account was 20% lower compared to the same period in 2019.
  • Notably, there was no significant change in nonqualified withdrawal activity as of the end of March.

In the face of COVID-19 and its related challenges, many Americans understandably adjusted their contributions to savings plans. However, savers haven’t yet tapped into existing savings and are making efforts to “stay the course” to help ensure financial security.

Additional relief from the government, including the passage of another $320 billion for the Paycheck Protection Program (PPP), will help small business owners and savings plan sponsors continue to support their employees.

Qualifying employers should connect with a financial advisor to learn how PPP funding can benefit them and their employees. With this funding, employers may be better-positioned to continue to administer plans and, along with their employees, return to regular contribution levels.

To learn more about the latest regulatory updates and coronavirus relief, visit

Methodology and Disclosures

1March 2020 projections are forecasted from a computed index using activity from 2019 through February 2020.

2Retirement contribution analysis is based on plan data history from the Ascensus platform from January 1, 2019, through March 31, 2020. To ensure consistency in year-over-year projections, the plan population included those plans that were active as of January 1, 2019, and still active March 31, 2020. Individual(k) and balance forward retirement plans were excluded.

3Retirement distribution and loan analysis is based on all saver transactions from January 1, 2019, through March 31, 2020.

4Education savings analysis is based on activity from January 1, 2019, through March 31, 2020, for all funded 529 accounts on the Ascensus platform. Per-account averages were used to include activity from 529 accounts that were not on the Ascensus platform at the start of 2019 but were converted during this time frame.