April 8, 2005 -- Workers who currently do not contribute to employment-based retirement savings plan are more likely to participate if their employers match contributions of up to 5% of their salary, according to a survey released by the Employee Benefit Research Institute.

Nearly three-fourths of workers surveyed said that upping employer contributions would make them much more likely to participate in a retirement savings plan at work, while 51% said that even raising employer contributions to 3% of their salary would induce them to participate.

Nonparticipating workers noted certain investment options that would make such plans more appealing.

A majority of workers who do not contribute to their employers' retirement plans said they would be more likely to participate if the plans featured an option that let workers invest less as their retirement date approaches.

Fifty-five percent of nonparticipating workers also favored a provision that automatically raised workers' contributions by a fixed amount or percentage when they receive a pay raise.

"These results confirm that workers are well aware of 401(k)-type plans and have some definite ideas about what measures could be undertaken to make these plans even more appealing and ultimately increase retirement saving," said Dallas Salisbury, EBRI president.

Most workers, buffeted by daily living expenses, said they were behind schedule in saving for retirement. But 66% believed they would reach their savings goal by the time they stop working, even if they have only guessed at the amount of money they will need-an indication that many workers' confidence may be misplaced, said EBRI. The cost of paying everyday expenses accounts for an average of 49% of salary, followed by 39% allocated to child-rearing expenses, and 35% for medical costs. Medical costs have overwhelmed workers and have been cited as the reason keeping them from achieveing their retirement saving goals, said the survey.