For additional assistance on 

benefits, contact one of our 

information offices:

NATIONAL: WASHINGTON, DC

(202) 691-6199 TDD: (800) 877-8339

NCSinfo@bls.gov www.bls.gov/ebs

REGIONAL:

ATLANTA

(404) 893-4222

BOSTON

(617) 565-2327

CHICAGO

(312) 353-1880

DALLAS

(972) 850-4800

KANSAS CITY

(816) 285-7000

NEW YORK

(646) 264-3600

PHILADELPHIA

(215) 597-3282

SAN FRANCISCO

(415) 625-2270

BUREAU OF LABOR STATISTICS

U.S. DEPARTMENT OF LABOR

www.bls.gov/ebs 

GLOSSARY

The next Program Perspectives will feature 

outpatient prescription drug coverage.

Savings and thrift plans. Under these 

defined contribution plans, employees 

typically contribute a predetermined 

pretax portion of earnings to an individual account, all or part of which the 

employer may match. Employers may 

match a fixed percentage of employee 

contributions or a percentage that varies 

by length of service, amount of employee contribution, or other factors. 

Contributions are invested as directed 

by the employee or employer. Although 

usually designed as a long-term savings 

vehicle, savings and thrift plans may 

allow preretirement withdrawals and 

loans.

Defined-contribution plan. A defined 

contribution retirement plan specifies 

the level of employer contributions and 

places those contributions into individual employee accounts. Retirement 

benefits are based on the level of funds 

in the account at the time of retirement. 

Company stock. Employees receive 

equity, in the form of company stock, in 

the company that sponsors the defined 

contribution plan. 

Common stock fund. A common stock 

fund is a professionally managed fund 

invested in the common stock of a variety of companies.

Diversified investments. Diversified 

investments are professionally managed 

funds that are invested in more than one 

type of equity or debt instrument. 

Life-cycle funds. Life-cycle funds 

are professionally managed funds that 

adjust from a position of higher risk 

to lower risk as the employee nears a 

target retirement date or other specified 

time horizon. 

index to investment in smallcompany, industry, or international 

funds, which may have both higher 

risks and greater returns. 

In 2009, 63 percent of private industry workers had common stock 

funds as an investment choice for 

their own funds while 57 percent 

could choose common stock funds 

for their employer’s matching 

contributions. Investment in common stock funds has increased 

since 2003 for both employee and 

employer’s matching contributions. 

Life-cycle funds 

Often referred to as target 

retirement or “set it and forget 

it” funds, life-cycle funds aim 

to provide an easy and efficient 

way for employees without any 

real knowledge of investing to 

contribute toward their retirement. 

With life-cycle funds, employees 

typically choose a retirement 

time horizon up front and a 

corresponding fund that is closest 

to that time horizon. The chosen 

fund then automatically adjusts 

the employee’s investments from a 

position of higher risk to lower risk 

as the employee nears retirement. 

The NCS first produced data 

on life-cycle funds as an investment choice within savings and 

thrift plans in 2009. The data show 

that 30 percent of private industry 

workers had life-cycle funds as an 

investment choice for employee 

contributions and 27 percent had 

life-cycle funds as an option for 

employer contributions. ●

from page 3►
U.S. BUREAU OF LABOR STATISTICS 

2 PROGRAM PERSPECTIVES • June 2011 

to that of determinable responses. 

For 2009, the rate of responses that 

were not determinable for available 

investment choices was 16 percent 

for employee contributions and 19 

percent for employer contributions. 

Additional adjustments were made 

to remove responses that were not 

determinable for those workers with 

investment choices available. 

Available investment 

choices

Options for investing in savings 

and thrift defined contribution retirement plans, such as 401(k)’s, 

include a wide range of available

investments and risk. Among 

typical investment options in

recent years are company stock, 

common stock funds, diversified 

investment funds, and life-cycle 

funds. Company stock investments typically have the highest risk, along with the highest 

potential returns. Common stock 

funds, diversified investment 

funds, and life-cycle funds have 

varying amounts of risk to meet 

the large range of employer or 

employee investment profiles. 

Available investment options for 

workers’ own contributions or 

employers’ matching funds are 

fairly similar, but there is some 

variation. 

Workers were more likely to have 

investment choices for their own 

contributions than for employer 

matching funds, but most workers 

participating in savings and thrift 

plans could choose among investment options for either type of contribution. Some workers also had 

multiple savings and thrift investment options available to them. (See 

table 1.) 

TABLE 1

Investment choices for employee and employer contributions in savings and thrift plans, 

private industry workers, National Compensation Survey, 2003, 2005, 2009

(All workers participating in savings and thrift plans = 100 percent)

Investment choices 2003 2005 2009

Employee contributions

Investment choice available 98 99 98

 Company stock 34 28 22

 Common stock fund 53 48 63

 Diversified investments 56 51 81

 Life-cycle funds – – 30

 Other 17 15 15

No investment choice available 2 1 2

Employer contributions

Investment choice available 87 89 90

 Company stock 26 23 14

 Common stock fund 45 44 57

 Diversified investments 49 48 72

 Life-cycle funds – – 27

 Other 11 12 14

No investment choice available 13 11 10

Note: Individual items may sum to percentages greater than that listed for the total for all investment choices available because multiple savings 

and thrift investment options were available to some employees. Dash indicates data not requested. 
U.S. BUREAU OF LABOR STATISTICS 

2 PROGRAM PERSPECTIVES • June 2011 

to that of determinable responses. 

For 2009, the rate of responses that 

were not determinable for available 

investment choices was 16 percent 

for employee contributions and 19 

percent for employer contributions. 

Additional adjustments were made 

to remove responses that were not 

determinable for those workers with 

investment choices available. 

Available investment 

choices

Options for investing in savings 

and thrift defined contribution retirement plans, such as 401(k)’s, 

include a wide range of available

investments and risk. Among 

typical investment options in

recent years are company stock, 

common stock funds, diversified 

investment funds, and life-cycle 

funds. Company stock investments typically have the highest risk, along with the highest 

potential returns. Common stock 

funds, diversified investment 

funds, and life-cycle funds have 

varying amounts of risk to meet 

the large range of employer or 

employee investment profiles. 

Available investment options for 

workers’ own contributions or 

employers’ matching funds are 

fairly similar, but there is some 

variation. 

Workers were more likely to have 

investment choices for their own 

contributions than for employer 

matching funds, but most workers 

participating in savings and thrift 

plans could choose among investment options for either type of contribution. Some workers also had 

multiple savings and thrift investment options available to them. (See 

table 1.) 

TABLE 1

Investment choices for employee and employer contributions in savings and thrift plans, 

private industry workers, National Compensation Survey, 2003, 2005, 2009

(All workers participating in savings and thrift plans = 100 percent)

Investment choices 2003 2005 2009

Employee contributions

Investment choice available 98 99 98

 Company stock 34 28 22

 Common stock fund 53 48 63

 Diversified investments 56 51 81

 Life-cycle funds – – 30

 Other 17 15 15

No investment choice available 2 1 2

Employer contributions

Investment choice available 87 89 90

 Company stock 26 23 14

 Common stock fund 45 44 57

 Diversified investments 49 48 72

 Life-cycle funds – – 27

 Other 11 12 14

No investment choice available 13 11 10

Note: Individual items may sum to percentages greater than that listed for the total for all investment choices available because multiple savings 

and thrift investment options were available to some employees. Dash indicates data not requested. 
For additional assistance on 

benefits, contact one of our 

information offices:

NATIONAL: WASHINGTON, DC

(202) 691-6199 TDD: (800) 877-8339

NCSinfo@bls.gov www.bls.gov/ebs

REGIONAL:

ATLANTA

(404) 893-4222

BOSTON

(617) 565-2327

CHICAGO

(312) 353-1880

DALLAS

(972) 850-4800

KANSAS CITY

(816) 285-7000

NEW YORK

(646) 264-3600

PHILADELPHIA

(215) 597-3282

SAN FRANCISCO

(415) 625-2270

BUREAU OF LABOR STATISTICS

U.S. DEPARTMENT OF LABOR

www.bls.gov/ebs 

GLOSSARY

The next Program Perspectives will feature 

outpatient prescription drug coverage.

Savings and thrift plans. Under these 

defined contribution plans, employees 

typically contribute a predetermined 

pretax portion of earnings to an individual account, all or part of which the 

employer may match. Employers may 

match a fixed percentage of employee 

contributions or a percentage that varies 

by length of service, amount of employee contribution, or other factors. 

Contributions are invested as directed 

by the employee or employer. Although 

usually designed as a long-term savings 

vehicle, savings and thrift plans may 

allow preretirement withdrawals and 

loans.

Defined-contribution plan. A defined 

contribution retirement plan specifies 

the level of employer contributions and 

places those contributions into individual employee accounts. Retirement 

benefits are based on the level of funds 

in the account at the time of retirement. 

Company stock. Employees receive 

equity, in the form of company stock, in 

the company that sponsors the defined 

contribution plan. 

Common stock fund. A common stock 

fund is a professionally managed fund 

invested in the common stock of a variety of companies.

Diversified investments. Diversified 

investments are professionally managed 

funds that are invested in more than one 

type of equity or debt instrument. 

Life-cycle funds. Life-cycle funds 

are professionally managed funds that 

adjust from a position of higher risk 

to lower risk as the employee nears a 

target retirement date or other specified 

time horizon. 

index to investment in smallcompany, industry, or international 

funds, which may have both higher 

risks and greater returns. 

In 2009, 63 percent of private industry workers had common stock 

funds as an investment choice for 

their own funds while 57 percent 

could choose common stock funds 

for their employer’s matching 

contributions. Investment in common stock funds has increased 

since 2003 for both employee and 

employer’s matching contributions. 

Life-cycle funds 

Often referred to as target 

retirement or “set it and forget 

it” funds, life-cycle funds aim 

to provide an easy and efficient 

way for employees without any 

real knowledge of investing to 

contribute toward their retirement. 

With life-cycle funds, employees 

typically choose a retirement 

time horizon up front and a 

corresponding fund that is closest 

to that time horizon. The chosen 

fund then automatically adjusts 

the employee’s investments from a 

position of higher risk to lower risk 

as the employee nears retirement. 

The NCS first produced data 

on life-cycle funds as an investment choice within savings and 

thrift plans in 2009. The data show 

that 30 percent of private industry 

workers had life-cycle funds as an 

investment choice for employee 

contributions and 27 percent had 

life-cycle funds as an option for 

employer contributions. ●

from page 3►