There seemed to be some good news reported recently on employee participation in 401(k) plans. A new study from the Employee Benefit Research Institute (EBRI) and the Investment Company Institute (ICI) indicated the average participant balance increased from $67,760 in 1999 to $121,202 at year-end 2006. Could it be employees are finally getting the message and taking control of their retirement?

Let's not go to this conclusion so quickly. First, let's look at the study itself. The EBRI/ICI tracked participants who held an account with the same employer during that time period. They were active participants in 1999 and they continued to be active participants at the end of 2006–with the same employer. Thus, the study looked at a group that had already established participation and had maintained continued employment with the same employer for seven more years.

The study shows the average balances of these participants has increased. Well, of course these balances should be higher seven years later! The key questions to ask are whether these balances increased enough and if these participants are closer to hitting their retirement savings goals now when compared to 1999.