U.S. workers in 401(k) retirement savings plans tend to select lower-cost mutual funds with below-average turnover, the Investment Company Institute said in a report issued on Tuesday.

About half of the $2.7 trillion in 401(k) assets at end of 2006 was invested in mutual funds and most of those were stock funds, according to the ICI, an industry group representing U.S. mutual funds.

The ICI report analyzed the economics of 401(k) plans that are administered by companies for some 50 million workers. The retirement plan is named after a section of the U.S. Internal Revenue code and lets an employee save for retirement while deferring income taxes on the saved money until withdrawal.

It found 401(k) investors in stock funds paid an average expense ratio of 0.74 percent in 2006, below the industrywide asset-weighted average of 0.88 percent. Three-quarters of mutual fund assets in 401(k) plans were held in no-load funds last year, according to the report.

Investors holding 401(k) plans also tend to hold stock mutual funds with relatively low turnover rates, it said. The industrywide average turnover rate in stock funds was 86 percent in 2006, compared with 46 percent for 401(k) accounts.

The ICI report was posted on the Web at http://www.ici.org/pdf/fm-v16n4.pdf . (Reporting by Julie Vorman)