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Defined Contribution

DC plans get vote of confidence in new survey

About 83% of Americans whose households have defined contribution plans expressed confidence that the vehicles will help individuals reach their retirement goals, results of a survey released Thursday by the Investment Company Institute showed.

The confidence level about the efficacy of DC plans fell to 62% among survey respondents whose households don't own DC plans.

ICI surveyed 2,000 Americans aged 18 or older in December about their views on DC plans.

Other polling results showed that among the universe of respondents with household ownership of DC plans, 94% strongly agreed or somewhat agreed that choice and control over investments in their retirement accounts is important.

About 91% of respondents said they strongly or somewhat agreed employer-sponsored DC plans help them concentrate on long-term goals, and the same percentage said payroll deduction of their contributions to the plan makes it easier to save.

The favorable tax treatment of the retirement accounts also is a big incentive to contribute to the plan, according to the 85% of the survey universe who strongly or somewhat agreed with the polling question.

"DC plans are a popular and powerful savings vehicle for American workers, offering them flexibility, control and a long-term perspective," said Sarah Holden, ICI's senior director of retirement and investment research in a news release accompanying the survey data.