How do Walmart employees approach 401k investing?
Walmart offers a 401(k)-retirement savings plan for its 1+ million employees. Employees can choose to contribute a portion of their income to the plan.
But which investments do Walmart employees pick as retirement investments?
What is a 401(k) Retirement Savings Plan
A 401(k) plan is a retirement savings plan offered by employers in the United States. It allows employees to save a portion of their salary before taxes are applied, meaning they pay less in taxes upfront.
The money is then invested in various options within the plan, such as mutual funds. Employers may also contribute to the employee’s 401(k) account, usually by matching a percentage of the employee’s contributions.
The funds in a 401(k) grow on a tax-deferred basis until they are withdrawn during retirement, at which point they are subject to regular income tax.
Some plans also offer a Roth 401(k) options where contributions are made “after-tax”, and withdrawals are tax-free in retirement.
A 401(k) retirement savings plan is a type of defined contribution plan.
Walmart 401(k) Plan
The Walmart plan allows for matching contributions. Walmart makes matching contributions in an amount equal to 100% of the first 6% of eligible compensation deferred by participants.
Form 5500 lists the investments Walmart 401(k) plan participants selected for their retirement funds. Giving us insight into how their employees choose to invest for retirement.
401(k) plan sponsors are required to file Form 5500 with the Department of Labor each year.
What are Walmart’s myRetirement funds?
Like many other large company 401(k) plans, the Walmart plan offers the equivalent of Target Date Retirement funds. In the Walmart plan, these are called myRetirement funds.
These funds are designed to shift their holdings as the target retirement year approaches. They gradually shift to more bonds and fewer equities. In other words, they become more conservative as time passes.
When a participant selects a myRetirement fund for investment, their account will contain a mix of U.S. Equity, International Equity, Real Assets, and Fixed Income funds.
So, what do Walmart associates select for retirement investments?
Shares in Walmart stock (WMT) is one of the largest investments by Walmart plan participants, with 9% of total plan assets. This represents the second most popular holding with $3.5 billion in value.
The single largest holding is the BlackRock Russell 1000 Index fund with a whopping 26% of total plan assets. This fund tracks the Russell 1000 Index which is designed to track the performance of ~1,000 of the largest publicly traded companies in the United States.
This fund is one of the funds used in Walmart’s myRetirement funds which most likely accounts for it outsized representation in participant accounts. The Russell 1000 fund is a broad-based fund representing the vast majority of the value of the U.S. equity market.
Coming in at number 3 is the BlackRock MSCI ACWI ex-U.S. fund with 7% of total fund assets. This is an international equity fund. Again, this fund is likely a cornerstone of the myRetirement funds international equity allocation.
Plan assets as of 1/31/2022
(from Walmart’s 2022 filing of Form 5500)
| Top 10 Investments | % |
| BlackRock Russell 1000 Index | 26% |
| Walmart Common Stock | 9% |
| BlackRock MSCI ACWI ex-U.S. Index | 7% |
| BlackRock U.S. Debt Index | 6% |
| Northern Trust LSV Int’l Value Equity | 4% |
| Northern Trust GQG Partners Int’l Equity | 3% |
| Prudential Core Plus Bond Fund | 3% |
| SEI Fiera Asset Management USA | 3% |
| BlackRock MSCI USA Value Index RSL Fund | 3% |
| BlackRock MSCI USA Min. Volatility Index | 3% |
See the Walmart 401(k) page for additional plan details and value of holdings.
Source: 2022 Form 5500 for Walmart 401k plan
