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As members of the U.S. Senate prepare to vote on expanding 401(k) contribution limits, a new survey by J.P. Morgan/American Century Retirement Plan Services reveals that most U.S. 401(k) plan participants would support increasing annual contribution limits to $15,000. The study further suggests that the majority would contribute more to their retirement plans, either immediately or in the future.

The "J.P. Morgan/American Century Retirement Plan Services 401(k) Expansion Study" results are based on responses from more than 500 401(k) participants across the country. The research was part of ORC International's weekly telephone survey. According to the study, the vast majority (84%) of U.S. 401(k) plan participants feels Congress should vote to expand contribution levels from $10,500 to $15,000 per year. Support was consistent across all income and education levels.

J.P. Morgan/American Century Retirement Plan Services is a retirement plan administrator based in Kansas City, Mo. that is a business partnership between J.P. Morgan Investment Management and American Century Investments. American Century is a mutual fund, brokerage and investment services company. J.P. Morgan & Co., based in New York, is a global financial firm that manages assets for defined benefit and contribution plans, proprietary mutual funds, third-party mutual funds and high net worth individuals.

"Broad support across all socioeconomic groups indicates that Americans understand they need greater savings opportunities," said Tom Kmak, CEO of J.P. Morgan/American Century Retirement Plan Services. "It also suggests that many U.S. 401(k) plan participants are looking ahead to a point where they will be able to contribute more toward their retirement." Within the month, the U.S. Senate is planning a vote on both 401(k) and IRA expansion legislation. In late July, the U.S. House of Representatives passed a similar bill by a margin of 401 to 25.

When asked if they knew the current maximum 401(k) contribution limitation, nearly one-third of those surveyed (31%) correctly answered up to $10,500 per year. However, just more than one-fourth (28%) believed there was no maximum dollar limit. Additionally, 26% did not know or attempt a guess. Those more likely to know the current limits included people age 35 and older, college graduates and individuals with household incomes of $50,000 or more (35%, 43% and 41%, respectively).

In terms of the amount presently contributed to their 401(k), almost one-third (32%) put in at least as much as their employer would match. Nearly one in four (24%) are hitting today's current contribution limit. College graduates were more likely to currently contribute $10,500.

More than 70% of 401(k) participants felt they would increase their contribution levels either today or in the future if limits were higher. Among those more likely to increase current contribution levels were college graduates, participants age 35 or older or with household incomes of $50,000 or more (35%, 35% and 37%, respectively). Individuals with children at home or those under age 35 were more likely to increase future contributions (47% and 49%, respectively).

ORC International, a Princeton, N.J.-based global marketing research firm, conducted the 529 phone interviews for the study in August 2000. Questions were posed to a national probability sample of 401(k) participants 18 years of age or older, living in private households in the continental U.S.

Edited by Steve Tarnoff