Employment-Based Retirement Plan Participation: Geographic Differences and Trends, 2009

October 2010
EBRI Issue Brief #348
Paperback, 44 pp.
PDF, 2,367 kb
Employee Benefit Research Institute, 2010

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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 2010 Current Population Survey (CPS), the most recent data currently available (for 2009). It shows that the employment-based retirement system remains a critical source of Americans’ retirement income security, and is under pressure from the recent economic downturn.

SPONSORSHIP RATE: Among full-time, full-year wage and salary workers ages 21–64 (those with the strongest connection to the work force), 61.8 percent worked for an employer or union that sponsors a plan. This is down almost a percentage point from 2008 and almost 8 percentage points lower than the sponsorship high point of 69.4 percent measured in 1999.

PARTICIPATION LEVEL: Among full-time, full-year wage and salary workers ages 21–64, 54.4 percent participated in a retirement plan in 2009.

Trend: While the 2009 participation level for this full-time, full-year group is little changed from 54.8 percent in 2008, it marks the second straight annual decline and is down almost 6 percentage points from the high of 60.4 percent measured in 1999. Among all workers (including those who are not offered a retirement plan at work), 39.6 percent participated in a retirement plan in 2009, the first time in 15 years it dropped below 40 percent.

Age: Participation increases with age (61.2 percent for wage and salary workers ages 55–64, compared with 30.6 percent for those ages 21–24).

Gender: Among wage and salary workers ages 21–64, men had a higher participation level than women, but among full-time, full-year workers, women had a higher percentage participating than men (55.8 percent for women, compared with 53.2 percent for men). Female workers’ lower probability of participation for wage and salary workers 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 42.9 percent) while the upper Midwest and Northeast had the highest levels (North Dakota had the highest participation level, at 64.2 percent).

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