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Lack of tax incentives would derail 401(k) market: Report

A reduction in tax incentives for 401(k) plans would have a negative effect on retirement security because it would discourage savings and reduce the number of employers offering plans, according to a new report by The Principal.

By Paula Aven Gladych | Updated on November 10, 2011

A reduction in tax incentives for 401(k) plans would have a negative effect on retirement security because it would discourage savings and reduce the number of employers offering plans, according to a new report by The Principal.

The “2011 Principal Financial Group Retirement Readiness Survey” questioned 1,305 decision makers at small and medium-sized employers across the United States earlier this year. The survey found that 92 percent of employers cite tax incentives as one of the main reasons they offer 401(k) plans, while 65 percent say they would reconsider offering a plan if tax incentives were removed.

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