401(k) Pension plans: Many take advantage of opportunity to ensure adequate retirement income

This paper provides an in-depth look into 401(k) pension plans. Almost half of all workers and nearly two-thirds of workers nearing retirement age are covered by a pension plan. One in four workers who have pension coverage participates in a 401(k) pension plan. Male, white, highly educated, and higher-income workers are more likely to have pension coverage than are other workers. On average, workers covered by a 401(k) plan contribute 7 of their salary to their account; 80 also receive a matching contribution from their employer, averaging about 5 of their salary. Workers with higher income, college education, defined benefit plan coverage, or a spouse with pension coverage tend to contribute a higher proportion of their of their salary to their 401(k) pension account. About 25 of 401(k) participants invest their 401(k) funds in conservative investments, such as bonds; another 25 invest primarily in stocks; and the rest split their investments between stocks and bonds. Women are more likely to invest in bonds while highly educated workers and higher-income workers are more likely to invest in stocks.