Despite a recovery in the stock market, fewer employees were participating in 401(k) retirement plans last year, according to a recent study.
Conducted as an annual survey by the Profit Sharing/401(k) Council of America, the study shows that 76% of eligible employees participated in their companys 401(k) plans in 2003, down from 80% in 2002. The study was compiled from the responses by sponsors of nearly 1,200 retirement plans of various sizes. Combined, the respondents plans represented over 3.4 million participants and held assets worth about $12 billion.
David Wray, president of the PSCA, noted that the declining participation also may be an indication that employers have begun to look beyond such plans when offering retirement savings programs. Additionally, he said, many are taking advantage of opportunities afforded to them by Congress, most notably in the Economic Growth and Tax Relief Reconciliation Act of 2001.