Sixty-six percent of U.S. households had favorable impressions of 401(k) and similar retirement plan accounts in the fall of 2013, a level on par with the 65 percent recorded in 2012, according to new research.
The Investment Company Institute (ICI) reports this finding in a January 2014 report, “Americans’ Views on Defined Contribution Plans.” The research summarizes results from a survey of American adults about their views on defined contribution (DC) retirement account saving and their confidence in 401(k) and other DC plan accounts.
The report reveals that households generally expressed favorable impressions of DC plan accounts in the fall of 2013:
- Among households expressing an opinion, 92 percent had favorable impressions of 401(k) plans, with 46 percent agreeing that they had a “very favorable” impression;
- About nine out of 10 households with defined defined contribution accounts agreed that these plans helped them think about the long term and made it easier to save;
- More than four in 10 DC-owning households indicated they probably would not be saving for retirement if not for their DC plans;
- Saving paycheck-by-paycheck made 68 percent of DC-owning households surveyed less worried about the stock market;
- Nearly nine in 10 DC-owning households said the tax treatment of their retirement plans was a big incentive to contribute;
- Nearly all households with DC accounts agreed that it was important to have choice in, and control of, the investments in their DC plans. Eighty-six percent indicated that their DC plan offered a good lineup of investment options.
In addition, households’ views on policy changes revealed a strong preference to preserve retirement account features and flexibility;
- A strong majority of U.S. households disagreed with proposals to remove or reduce tax incentives for retirement savings;
- Eighty-six percent of households disagreed that the government should take away the tax advantages of DC accounts, and 83 percent disagreed with reducing the amount that individuals can contribute to DC accounts;
- Support for DC account tax treatment also was widespread even among households not owning DC accounts or individual retirement accounts (IRAs). In fall 2013, 81 percent of households without DC accounts or IRAs rejected the idea of taking away the tax treatment of DC accounts.