Study: How 401(k) plans boost pay for low-income workers

12/14/2011 | PlanAdviser.com

Employer 401(k) contributions increase the total compensation of lower-income workers more than they do for higher-income workers, a study from the Center for Retirement Research at Boston College finds. Employers reduce salaries for higher-income employees by nearly the amount they contribute to their 401(k) plans, the study found. Meanwhile, the wage reduction for lower-income workers is far less than the contribution, resulting in a rise in total compensation. The study challenges the theory that 401(k) plans disproportionately help the wealthy, according to this article.

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