Stock Market Instability Can Help Pension Plan

Workers spooked by inflation, rising unemployment and Wall Street jitters could be forgiven for keeping money in their pockets rather than putting it away for retirement in their pension plan. Still, many continue to contribute to their pension plan accounts. And they’re likely snapping up bargains in the process.

In a review of the more than 2,220 defined-contribution pension plans it oversees, The Vanguard Group found that the number of workers adding money to vehicles like 401(k)s remained unchanged last year as did the amount they added. The average worker contribution of 7.3 percent was essentially flat with levels seen in 2000.

Steve Utkus, director of Vanguard’s Center for Retirement Research, said it is encouraging that participation and contribution rates remained steady in 2007. Read more