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Americans Stand by 401(k) Plans, Survey Says

BOSTON ( TheStreet) -- To paraphrase Mark Twain, reports of the demise of 401(k) plans may be greatly exaggerated.

Despite the recession that started in late 2007 and continued through most of 2009, Americans still have confidence in their retirement plans and investment options, according to a recent survey by the Investment Company Institute (ICI).

The ICI, the trade group of the money management industry, surveyed 3,000 households and found that, among households expressing an opinion about retirement plans, 90% had a favorable view. The organization's survey comes as the Obama administration discusses ways to encourage people to shift from 401(k) to annuities so that they don't outlive their retirement savings. The ICI opposes the notion, which could hurt revenue at mutual fund companies.

Findings from the survey, conducted in November and December 2009, include:

  • Four out of 10 households with defined-contribution plans, which includes 401(k) accounts, said they probably wouldn't be saving for retirement if it weren't for these plans.
  • The ability to save paycheck-by-paycheck made nearly six out of 10 households surveyed less worried about the stock market.
  • Nearly all households with defined-contribution accounts agreed that it was important to have control over the investment options in their plans. Eighty-five percent said their plan offered a good lineup of investment options.
  • Ninety-six percent of the households indicated they did not want the government to take away retirees' ability to make decisions about retirement assets and income.
  • Seven in 10 U.S. households said they opposed the idea of the government requiring retirees to trade a portion of their retirement plan accounts for a contract that promises to pay income for life, whether from the government or an insurance company. Opposition to such a proposal was more than 80% among older, higher-income groups, for whom annuitization is a more salient issue.
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