By Randy Myers
Retirement plan participants are paying closer attention to their accounts during bouts of market volatility but are largely resisting the urge to act. That was a central takeaway from a panel of recordkeepers speaking about recent participant behaviors at the 2026 Stable Value Investment Association Spring Seminar.
“The general conclusion … is participants have behaved largely as expected, but with some nuances,” said moderator Xin Zhou, a stable value portfolio manager with T. Rowe Price Associates. Chief among those nuances: spikes in digital engagement with their plans during periods of stress and growing reliance on plan design and advisory support to guide their investment decisions.
One of the clearest patterns discussed was the link between market volatility and confidence in retirement outcomes. Christelle Ngnoumen, PhD, assistant vice president of behavioral finance research at Voya Financial, said her firm’s research shows “a very strong inverse correlation … between market volatility and retirement sentiment over the past 15 quarters.” In other words, when markets turn turbulent, confidence declines.
Only 1.4% of participants on the Voya platform made investment allocation changes during the first quarter of this year, down one-tenth of a percentage point from the same period last year, she reported. Loan activity and hardship withdrawals were similarly limited, at roughly 1.2% in the first quarter, up a tenth of a percentage point from the year-earlier period. Meanwhile, savings behavior remained strong: In the first quarter of this year, 73% of participants who changed their contribution rate increased it, Ngnoumen reported.
Where behavior has shifted is in engagement. Ngnoumen reported sharp increases in digital activity during key market events, such as tariff announcements and government shutdown concerns. Participants are logging in, checking balances, and reviewing contributions at much higher rates—even if they ultimately make no changes.
“They were very actively going into their retirement accounts … wanting to stay informed, and yet they were still staying the course,” she said.
Age remains a key differentiator in participant behaviors. Older participants, especially those over 50, are more likely to trade during volatile periods, which Ngnoumen attributed to their larger balances and greater sensitivity to losses. “They have more assets, they have more to lose,” she said. When their aversion to losses kicks in, they become more prone to “biased, reactive decisions … like panic selling or withdrawing.”
Those patterns make plan design particularly important for this cohort. Ngnoumen highlighted strategies such as pairing capital preservation options with systematic withdrawal features to support retirees in generating stable income and avoiding emotionally driven decisions. “Messaging also matters,” she said, noting that framing tools in terms of benefits—or the risk of not using them—can improve engagement.
“It’s not just giving people all the tools,” Ngnoumen said, “but making sure that we’re doing it in a way that ensures they’re actually engaging with it … particularly during market volatility.”
Amy Montford, vice president, individual retirement solutions, with Principal Life Insurance Co. and chief executive officer of Principal Advised Services at Principal Financial Group, said plan design plays a central role in shaping participant behavior, particularly for those with limited investment expertise. Utilization of capital preservation options remains highest among participants nearing or in retirement, but adoption is increasingly driven by whether those options are embedded in default structures or managed accounts.
“Where capital preservation funds and investments are part of managed account solutions … part of default investment options … that is really driving utilization,” she said.
More broadly, Montford said many participants need help navigating investment decisions. “Where they’re not as sophisticated when it comes to making investment decisions … they really need help along the way,” she said.
Montford also shed light on how participants are behaving when they experience a “benefit event” such as retirement or a job change. Increasingly, she said, they are taking their money out of their plan and rolling assets into retail products, particularly individual retirement accounts.
Simplicity is a primary driver of those decisions, especially among participants who have accumulated multiple accounts at different employers over time. “They want to consolidate their assets and they want simplicity,” Montford said.
A second factor driving plan outflows is the growing convergence between retirement plans and wealth management. Access to advisors is expanding beyond high-net-worth investors, leading more participants to seek guidance outside the plan.
At the same time, a growing population of retirees is remaining in-plan but beginning to draw down assets. Montford noted that this “silver tsunami” of retiring baby boomers is driving increased distributions from plans, including required minimum distributions.
From a recordkeeping perspective, cash flow dynamics are driven less by contributions or withdrawals, though, than by internal reallocations. Zhou said “net exchange activities are the dominant factors” influencing flows as participants shift assets among investment options within the plan. When moving out of stable value, participants over the past five years most often shifted to equities (about 60% of outflows), followed by target-date funds (about 30%) and other fixed-income options (about 10%).
These reallocations can reflect a bit of performance chasing. Data presented by T. Rowe Price showed that flows tend to follow recent returns, with participants moving into equities after strong stock market performance. “Participants do chase returns,” Zhou said. That behavior highlights the ongoing need for participant education, particularly around long-term investing principles.
Beyond participant education, Zhou said, effective liquidity management should be embedded as a core element of portfolio construction, supported by a comprehensive framework for addressing participants’ cash flow needs.
Zhou also noted that money market funds and self-directed brokerage accounts see limited usage among participants who invest in stable value, even when those options are available. Roughly 70% of plans on the T. Rowe Price platform offer both stable value and money market funds, she said, and about 20% offer brokerage accounts alongside stable value.
Tom Manente, vice president, stable value solutions, at Empower Investments, shared his firm’s insights on what happens when plans change recordkeepers or investment options. In those situations, asset movement can accelerate sharply, particularly in the final weeks before a transition.
“We see a lot of transfers inside the plan to other funds,” he said. Empower also, at times, sees “a big dramatic drop in (stable value) assets” in such moments as some money leaves the plan entirely, often influenced by third-party administrators.
These periods of “money in motion,” as Montford described them, create opportunities for advisors and third-party administrators to engage participants. “Anytime that there is money in motion … that is a time where advisors … want to work with plan participants,” she said.
Manente observed that from the end of 2024 through the first quarter of 2026, stable value assets on the Empower platform were essentially flat while most other asset classes grew. Target-date funds saw the biggest jump, with a 25.4% increase in assets.
Turning to trends in the advisory community, Manente noted that retirement plan advisors are increasingly separating their evaluation of recordkeeping platforms and proprietary investment products rather than viewing them as a bundled offering. They also are asking more questions about the termination provisions for stable value funds in the event a plan moves to another recordkeeper or simply decides to remove stable value from its menu of investment options.
In concluding the presentation, Zhou underscored the importance of continued research into participant behavior, noting that such insights can help better support participants’ liquidity needs and inform future recordkeeper activities.