The General Accounting Office studied employer-sponsored retirement savings plans provided for under section 401(k) of the Internal Revenue Code. Nearly 5,000 employers were surveyed in 1987 to determine (1) the incidence of 401(k) plans and their relationship to other types of retirement plans; (2) the variation in plan provisions and experiences across firms; (3) the extent to which plans benefit employees at various salary levels; and (4) anticipated effects of the Tax Reform Act of 1986 on 401(k) plans. The study found that only about 4 percent of all corporations in the sample (about 35,000 firms out of 793,000) sponsor 401(k) plans, that most provided other retirement plans as well, and that most made matching contributions to their plans, except in smaller firms. Nearly all firms with 5,000 or more employees sponsored 401(k) plans in 1986; about 6 percent of all full-time civilian workers were eligible to participate; and about 62 percent of those workers made contributions. The study also found that (1) 401(k) plans are used almost exclusively for retirement savings, despite hardship withdrawal provisions; (2) about 95 percent of the assets in these plans were invested conservatively; and (3) the plans benefit higher-paid workers more than lower-paid ones. Finally, the study predicted that some of the provisions of the Tax Reform Act of 1986 could reduce employee participation in 401(k) plans, especially among higher-paid workers. (KC)