) -- Three years of steady gains were wiped out in retirement plans because of the stock-market crash, according to a report by the nonprofit Employee Benefit Research Institute.

Median asset levels in defined-contribution plans dropped at least 15% from the end of 2007 to mid-2009, according to the review, one of the first that quantified just how bad retirement plans were hurt.

The institute's research builds upon a statistical foundation set by the 2007 Survey of Consumer Finances, the Federal Reserve Board's triennial survey of wealth. According to the Employee Benefit Research Institute study's author, Craig Copeland, the timing of the Survey of Consumer Finances was unfortunate because 2008's economic downturn took place just after it was released. In response, the Employee Benefit Research Institute adjusted the account balances of defined-contribution plans and individual retirement accounts.

Among all families with a defined-contribution plan, the median balance was $31,800 in 2007, up 16% from 2004, the date of the previous Survey of Consumer Finances release. But, according to Employee Benefit Research Institute estimates, this dropped 16% to $26,578 at mid-June 2009 from year-end 2007. Losses were higher for families with more than $100,000 a year in income (down 22%) or having a net worth in the top 10% (down 28%).

For families with an IRA/Keogh plan, the median value of their balance was $34,000 in 2007, up 3% from 2004. This median value dropped 15%.

"We wanted to know where people were really at," says Copeland. "What we found out is that they went back to where they were three years before. There were pretty substantial gains from 2004 to 2007, but then that was all lost in one year."

The Employee Benefit Research Institute analysis also provides a look at retirement-plan participation and IRA ownership.

According to its statistics, in 2007, 41% of families had a participant in an employment-based retirement offering, either a defined-benefit or defined-contribution plan. This was up from 39% in 1992, but virtually unchanged from 2004.

A significant shift in plan types occurred from 1992 to 2007, with the share of families with a retirement plan having only a pension plan decreasing from 40% to 17%. The share of families participating in only a defined-contribution plan showed the opposite trend, rising from 38% in 1992 to 60% in 2007.

Copeland says "some optimism" is warranted because "most individuals continue to contribute to their individual account plans and are in a position to accumulate added wealth as the economy recovers."

"The increase in IRA wealth is expected to continue in the future, as more workers will be in defined-contribution plans and will be in them for a longer period of their working lives," the report reads.

The increase in IRA participation, however, may be somewhat deceiving. Helping to drive that increase is the demise of traditional pension plans. In response, big-name financial-services firms such as



Fidelity Investments



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JPMorgan Chase

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TD Ameritrade

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have been actively promoting and facilitating rollover IRAs.

"The rollover is the place where IRAs are growing and, in most cases, will continue to do so, meaning that dollars that were in employment-based plans are now going to IRAs," says Copeland. "That is where the build-up in IRAs is. It is not all from contributions."

Copeland says a concern is whether recent losses will deter participation.

"I still don't know if we've seen the full extent," he says. "We are just sort of looking at what people had that they lost. Now did they stop participating? Did it discourage participation going forward? Some companies have stopped matching contributions -- what effect does that have? These are all things that won't come out until the next set of data."

-- Reported by Joe Mont in Boston. Feedback can be sent to