Employer sponsored 401(k) plans have been taking a beating lately. Not necessarily in performance, but in public perception. Concerns about high fees, investment choices, plan options and employee participation have dominated retirement plan discussions. But are 401(k) plans working? With $7.8 trillion dollars in so-called "defined contribution" (DC) retirement accounts and IRA rollovers, it's an important question to ask.

5 Myths About 401(k) Plans

Let's take a reality check on five prevailing myths about 401(k)s:

1. Are 401(k) Plans Poor Performers?

"Those critical of the DC system in the past thought that the system would collapse during a sharp economic downturn," says Bob Benish, executive director of the Plan Sponsor Council of America. "They were wrong. Was the system impacted the same way everything else in the economy was? Sure, but it is recovering and becoming stronger as both companies and participants are refocusing on saving and looking at more holistic approaches to financial wellness."

2. Do Most Employees Decline to Participate in Their 401(k)?

The PSCA annually surveys employer-sponsored retirement plans across the country and says results show participation rates, deferral rates and company contributions have grown over the last couple of years and are now equal to or higher than they were before the recession. In 2018, the PCSA estimated that 88.7% of eligible employees have a balance in their 401(k) plan.

3. Do Participants Not Save Enough With Their 401(k)?

Whether or not an individual is saving enough to support their preferred retirement lifestyle is a matter for debate, but on average U.S. 401(k) participants are saving more -- setting aside 7.1% of pay in their company's retirement plan. That's quite the increase over the decade - in addition to being 6.8% last year, this figure was 6.4% in 2011, and 6.2% in 2010.

4. Are Employers Not Pitching In?

In fact, 95.3% of employers made a matching contribution in 2012 when it was provided for in the plan (up from 89.0% in 2010 and 85.2% in 2009). And the PSCA says the average company contribution is now 5.1% of pay -- up from 4.2% in 2011 and 3.7% in 2010.

5. Are Sponsors Limiting Important Plan Features?

According to the report, Roth after-tax contributions are now available at a whopping 70% of companies. Automatic enrollment continues to grow and now is used by well over half of plans (61.2%, to be precise). And more plans are using a default deferral percentage higher than 3% of pay -- nearly 60% of plans that do automatic enrollment.

The study analyzed 605 plans with millions of participants holding billions in plan assets.

--Written by Hal M. Bundrick for MainStreet