The Government Accountability Office (GAO) has examined the impact of low DC savings rates, but the real problem may lie elsewhere.
The analysis, which bears the characteristically descriptive, but somewhat understated title, “Low Defined Contribution Savings May Pose Challenges,” might have been better titled, “Low-Income Households Who Have Less Access to Workplace Savings Plans, and Who Are Less Likely to Take Advantage When They Do have Access, Are in Trouble.”
The report addresses two questions:
- What are the recent trends in DC plan participation and account savings?
- How much households could potentially save in DC plans over their careers, and how do key individual and employer decisions affect plan saving?