Another research conducted by Bessett, Fleming and Rodriguez in 1998 on the subject of ‘How Workers Use 401(k) Plans: The Participation, Contribution, and Withdrawal Decisions’ highlighted that many of employees are not participating in the retirement plans mostly because of their lack of knowledge and awareness in this matter. “While retirement planning choices are increasingly becoming the responsibility of individual workers, many either are not participating or are participating in a minor way.
Over one third (35 percent) of workers sponsored for a 401(k) plan declines to participate. Among workers with family incomes less than $15,000, only 36 percent choose to participate. Factors besides income that are positively correlated with participation are age, job tenure, education, home ownership, and whether the 401(k) is the only employer-sponsored retirement plan. Workers with employee matches are also more likely to participate, although no evidence is found that the level of the employer match is positively correlated with participation.” (Bessett et al., 1998)