Participants Would Contribute More if Limits Raised

September 21, 2000 (PLANSPONSOR.com) - Nearly a third of participants (31%) would increase their 401(k) contributions if the current limits were raised, and another 41% would increase that amount in the future according to a new survey.

Not surprisingly, 84% believe that Congress should increase the contribution limits.

The J.P. Morgan/American Century Retirement Plan Services 401(k) Expansion Study also found that 32% of respondents currently contribute as much as is matched by their employer, while 13% already contribute the maximum $10,500 to their 401(k) plan. College graduates were more likely to currently contribute $10,500.

Twelve percent contribute, but were unsure of how much and 8% don’t know if they contribute.

While 31% knew that 401(k) deferrals are currently limited to 15% of income, up to $10,500, more than a quarter (26%) did not know what the limits were and 12% thought there was no limit. The remaining 31% chose incorrect answers.

The 529 phone interviews for the “J.P. Morgan/American Century Retirement Plan Services 401(k) Expansion Study” were conducted in August 2000 by ORC International as part of its CARAVAN survey.

– Nevin Adams            editors@plansponsor.com

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