Retirement plans in June continued to reflect the ups and downs of the economy

Since the pandemic kicked off market volatility in February and spurred Congress to pass the CARES Act in March, the economy has been on a rollercoaster ride. We continue to watch the actions our retirement plan participants are taking to gauge the impact the changing economy is having on them, so we can try to help them with timely and targeted engagement.

Financial stress is another symptom of COVID-19

The major stock market indexes are bouncing back, getting close to their pre-pandemic highs, and unemployment rates have gone down a bit from their worst.¹ But the pandemic-related uncertainty that caused the market volatility hasn’t subsided, and a second wave of job losses is still expected.

It’s no surprise, then, that people are feeling financially stressed. More Americans were worried in June than in May that they or a family member would get sick from COVID-19. The number of people feeling financial stress is increasing, with 69% saying the virus has hurt or severely hurt their financial situation, and many aren’t optimistic about the future. Just over half of Americans expect their own financial situation to be adversely affected by the pandemic for another 3 to 12 months, and 42% say the worst impact from COVID-19 on their personal finances is yet to come.²

87% of Americans are worried that they or a family member will get COVID—51% are worried and 36% very worried²

For those who need help, retirement plans are providing a source of relief

We’ve been following our retirement plan participants to see the actions they’re taking, so we can develop helpful engagement and solutions. The good news? Fewer people lowered their contribution rate in June 2020 compared to June 2019, less than 1% of participants are taking the coronavirus-related distributions (CRDs) permitted by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, and less than 1% made changes to their investments. But the number of people taking CRDs is growing, echoing some of the financial stress experienced throughout the country. And we continue to see fluctuations in behavior, with many of the activities we track going up one month, down the next, and back up after that. Just as the news about the pandemic goes up and down, so do everyone’s responses to it.

Calls and web visits

Call volume into our participant service centers was 5% higher in June than in May. Calls about CRDs have ebbed a bit since their peak in May, but calls about non-CARES-Act loans and withdrawals, drove the increased volume. Web and mobile visits to the participant website have also increased, up 22% this June over last June. 

CRDs and loans

The number of people taking advantage of CRDs continued to increase in June, although the average distribution taken has come down since April. To put the use of CRDs in perspective, we compare them to in-service withdrawals. The number of CRDs and in-service withdrawals taken in June was 1,900% higher than the number of in-service withdrawals last June—evidence that people are in need and are looking for help. To put this further into context, very few people take any kind of withdrawal, including CRDs. June had the highest number of CRDs taken, but they were taken by only 0.8% of our participants.

CRDs taken April through June

April 2020

May 2020

June 2020

Average CRD amount




% of participants taking CRDs




Most likely because CRDs are available, the number of 401(k) loans taken is lower than normal—but the average amount taken was 25% higher compared to last June. 


Less than 1% of participants made changes to their investments in June—even so, this represents more than double the number of people who did so last June. After a large increase in participants moving into stable value in May, June brought a return to the investment changes we normally see people making, lining up very closely to the changes people made in June 2019. 

Moves made by participants who changed investments

June 2019 April 2020 May 2020 June 2020

Stayed in the market, either diversifying into equities, target-date funds (TDFs), or diversified funds; or rediversifying





Moved money to stable value/fixed income





Moved from stable value/fixed income into diversified or TDFs





May’s big jump in stable value was largely driven by people younger than 30, which is very different from what we normally see. June behavior was much more in line with what we expect, with younger people seeking market returns and transactions becoming more conservative with each age group.

Investment changes by age






Stayed in the market, either diversifying into equities, TDFs, or diversified funds; or rediversifying






Moved money to stable value/fixed income






Moved from stable value/fixed income into diversified or TDFs






People look to trusted resources for help

Retirement plan participants look to their employer, recordkeeper, and financial professional for help with financial decisions.³ Amid almost constant change and surprises around many corners, we all need to make sure we’re providing workers with the help they need. In addition to the official relief offered through the CARES Act, we can help relieve financial stress through engagement and education. By offering financial wellness resources to reduce stress  and guidance to help them understand market volatility and retirement-plan-related legislation, sponsors and their business partners can help participants weather this storm.

All data mentioned above, unless otherwise marked, is John Hancock’s internal data as of June 30, 2020, for the open-architecture platform only. As of March 31, 2020, the open-architecture platform included approximately 1.3 million participants and 1,963 plans. 

1 “The Employment Situation—June 2020,” Bureau of Labor Statistics, U.S. Department of Labor, June 2020. “J.D. Power Financial Services COVID-19 Pulse Survey,” J.D. Power, July 2020. John Hancock ’s financial stress survey, John Hancock and Greenwald & Associates, June 2019. A survey of more than 3,500 workers to learn more about individual stress levels, their causes and effects, and strategies for relief.

Fund categories were defined as target-date fund, stable value/fixed income, growth and income, equity, asset allocation, and other. A participant in ≥2 fund categories was labeled as diversified. A participant who changed from ≥2 fund categories to ≥2 other categories or asset allocation alone was labeled as having rediversified.  


For complete information about a particular investment option, please read the fund prospectus. You should carefully consider the objectives, risks, charges, and expenses before investing. The prospectus contains this and other important information about the investment option and investment company. Please read the prospectus carefully before you invest or send money. Prospectus may only be available in English.

The content of this document is for general information only and is believed to be accurate and reliable as of the posting date but may be subject to change. It is not intended to provide investment, tax, plan design, or legal advice (unless otherwise indicated). Please consult your own independent advisor as to any investment, tax, or legal statements made herein.

MGTS-P-42842-GE 7/20 42842  MGR0723201250589

Lynda Abend

Lynda Abend, 

Head of Strategy and Transformation

John Hancock Retirement

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