Pension Sponsorship and Participation: Summary of Recent Trends

Abstract

[Excerpt] According to the U.S. Census Bureau’s Current Population Survey (CPS), the number of private sector workers between the ages of 25 and 64 whose employer sponsored a retirement plan fell from 53.5 million in 2007 to 52.3 million in 2008. The number of private-sector workers who participated in employer-sponsored retirement plans fell from 44.1 million in 2007 to 42.9 million in 2008. The proportion of all 25 to 64 year-old workers in the private sector, whether employed full time or part-time, who participated in employer-sponsored retirement plans decreased from 45.1% in 2007 to 43.6% in 2008. Between 2000 and 2008, the number of private-sector workers between the ages of 25 and 64 who participated in employer-sponsored retirement plans fell by 3.2 million, declining from 46.1 million to 42.9 million. The percentage of workers who participated in employer-sponsored retirement plans fell from 50.3% in 2000 to 43.6% in 2008. A CRS analysis of the CPS indicates that, among private-sector workers aged 25 to 64 who were employed year-round, full-time: • The percentage of workers whose employer sponsored a retirement plan was 59.9% in 2007 and 59.0% in 2008. • The percentage of workers who participated in employer-sponsored retirement plans was 52.0% in 2007 and 51.1% in 2008. • Only 25.8% of workers at firms with fewer than 25 employees participated in an employer-sponsored retirement plan in 2008, compared to 45.9% of workers at firms with 25 to 99 employees and 63.6% at firms with 100 or more employees. • Among those who were employed year-round, full-time, 51.2% of men and 51.0% of women participated in an employer-sponsored retirement plan in 2008. • Only 43.3% of private-sector workers aged 25 to 34 and employed year-round, full-time participated in an employer-sponsored retirement plan in 2008, compared to 50.9% of workers aged 35 to 44, 55.4% of those aged 45 to 54, and 56.6% of those aged 55 to 64. • Black, Hispanic, and other non-white workers were less likely to have participated in an employer-sponsored retirement plan than white, non-Hispanic workers. Fifty-seven percent of white workers participated in an employer-sponsored retirement plan in 2008, compared to 45.6% of black non-Hispanic workers, 30.3% of Hispanic workers, and 47.9% of other non-white workers (mainly Asian-American and Native American workers). • Only 27.7% of workers whose annual earnings were in the lowest quartile in 2008 (under $28,000) participated in a retirement plan at work, compared to 68.6$65,000). The CPS ­ a survey of households ­ shows fewer private-sector workers participating in employer-sponsored retirement plans than are reported by the National Compensation Survey (NCS), which is a survey of business establishments. According to the CPS, the proportion of private-sector workers aged 25 to 64 who participated in an employer-sponsored retirement plan of some kind fell from 45.0% in 2005 to 43.6% in 2008. In contrast, NCS data indicate that 50% of workers in the private sector participated in employer-sponsored retirement plans in 2005 and 51% of private-sector workers participated in employer-sponsored retirement plans in 2008