US - The Pension Protection Act 2006 (PPA) has had a positive effect on 401(k) plan participation and contributions, according to a survey of 2,200 defined contribution (DC) plans by Vanguard Investments.
The number of schemes using automatic annual savings increases also rose, to two thirds, up from a third in 2005.
Steve Utkus, head of Vanguard's Center for Retirement Research, which prepared the report, said: "Defined contribution plans have become the most important retirement savings vehicle for private-sector US workers.
"Helping more people access these plans, encouraging greater savings rates, and providing ready-made, diversified investment portfolios can make a real difference in retirement security."
The company attributed the developments to the tax and fiduciary incentives in the PPA, although its research showed participation and contribution rates had remained fairly steady since 2000, at around 75% and 7.3% respectively.
Life-cycle investment options had increased in popularity, with 84% of plans offering such an option, up from 33% in 2000, while saving in own company stock continued to fall, down to 8% against 15% in 2005.
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