Employment-Based Retirement Plan Participation: Geographic Differences and Trends, 2007

October 2008
EBRI Issue Brief #322
Paperback, 40 pp.
PDF, 1,240 kb
Employee Benefit Research Institute, 2008

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Executive Summary

Latest Census data—This Issue Brief closely examines the level of participation by workers in public- and private-sector employment-based pension or retirement plans, based on the U.S. Census Bureau’s March 2008 Current Population Survey (CPS), the most recent data currently available.

Sponsorship rate—About 58 percent of all working-age (21–64) wage and salary employees work for an employer or union that sponsors a retirement plan. Among full-time, full-year wage and salary workers ages 21–64 (those with the strongest connection to the work force), just over 63 percent worked for an employer or union that sponsors a plan.

Participation level—Among full-time, full-year wage and salary workers ages 21–64, 55 percent participated in a retirement plan.

     --> Trend: This is up from approximately 53 percent in 2006. Participation trends increased significantly in the late 1990s, and decreased in 2001 and 2002. In 2003 and 2004, the participation trend flattened out. The retirement plan participation level subsequently declined in 2005 and 2006, before the significant increase in 2007.

     --> Age: Participation increases with age (63.9 percent for wage and salary workers ages 55–64, compared with 28.0 percent for those ages 21–24).

     --> Gender: Among all workers, men had a higher participation level than women, but among full-time, full-year workers, women had a higher percentage participating than men (57.0 percent for women, compared with 54.0 percent for men). Female workers’ lower probability of participation in the aggregate results from their overall lower earnings and lower rates of full-time work in comparison with males.

     --> Race: Hispanic wage and salary workers were significantly less likely than both white and black workers to participate in a retirement plan. The gap between the percentages of black and white plan participants that exists overall narrows when compared across earnings levels.

Geographic differences—Wage and salary workers in the South, West, and Southwest had the lowest participation levels (Florida had the lowest percentage, at 42 percent) while the upper Midwest and Northeast had the highest levels (Wisconsin had the highest participation level, at approximately 68 percent).

Other factors—White, higher-educated, higher-income, and married workers are more like to participate than their counterparts.