401(k)s remain cornerstone of US retirement saving as Americans reject policy changes

Americans continue to view workplace retirement plans as indispensable financial tools, with new research from the Investment Company Institute showing defined contribution plans remain central to long-term savings behaviour and politically resilient.

The findings, published in the institute’s American Views on Defined Contribution Plan Saving, 2025 report, reveal deep public support for the structure of employer-sponsored retirement accounts, particularly 401(k) plans. The study examines attitudes toward plan features, proposed policy changes and overall confidence in retirement readiness.

Access itself appears to be the defining factor driving participation with nearly half of respondents saving through a workplace DC plan indicating that they likely would not be saving for retirement without it. This highlights the behavioral role employer-sponsored programmes play in encouraging long-term investing.

The survey found consistently favourable views of DC accounts among participants, with respondents highlighting automatic payroll deductions, tax advantages and investment flexibility as key reasons for participation.

Many account holders reported that workplace plans provided their first meaningful opportunity to accumulate retirement assets, reinforcing the importance of employer access in shaping saving habits.

ICI chief economist Shelly Antoniewicz said the results demonstrate the continued relevance of core plan design features.

“Workplace retirement plans are essential to helping Americans save for their future, thanks to key 401(k) features like payroll deductions, a broad range of funds to invest in and tax advantages,” she said. “These plans give Americans of all income levels the chance to invest and to control their investments. Policymakers should protect the successful retirement structure Americans value and continue to benefit from.”

Americans resist tax changes

Public opposition to altering the tax treatment of retirement accounts emerged as one of the clearest themes in the research.

Large majorities rejected proposals that would eliminate or weaken tax deferral benefits tied to DC plans, reflecting broad understanding among respondents that long-term compounding depends heavily on current incentives.

Notably, resistance extended beyond current investors. Individuals without retirement accounts also showed reluctance toward policy changes affecting tax advantages or structural elements of workplace plans, suggesting widespread recognition of their role in retirement security.

The survey specifically evaluated Americans’ views on potential reforms to plan structure and taxation — areas frequently debated by policymakers — and found strong preference for maintaining existing frameworks.

Beyond structural support, respondents expressed confidence that DC accounts can help individuals achieve retirement goals, reinforcing the industry’s long-standing shift away from traditional defined benefit pensions toward participant-directed savings models.

Participants also valued control over investment decisions and account portability, features seen as differentiating modern workplace plans from earlier retirement systems.