Promoting Retirement Plans Among Small Employers

National Health Expenditures Top $1 Trillion Dollars in 1996

May 1998, Vol. 19, No. 5
Paperback, 12 pp.
PDF, 66 kb
Employee Benefit Research Institute, 1998

Download Notes PDF pdf

Executive Summary

Promoting Retirement Plans Among Small Employers—As of 1993, the latest year for which nationally representative data are available, 64
percent of all civilian nonagricultural wage and salary workers worked for an employer
that sponsored a retirement plan, and 49 percent of all workers participated in an
employment-based retirement plan Probably the most notable gap in employment-based
retirement plan coverage was among small employers. While 85 percent of workers at
employers with 100 or more employees had an employment-based plan available to them, only
50 percent of workers at employers with 25-99 workers and 20 percent of workers at
employers with fewer than 25 employees worked for an employer that sponsored a plan. As
Congress considers various proposals to promote retirement plan coverage among small
employers, expectations should be realistic. Coverage rates among small employers are
unlikely ever to approach those of large employers simply because the profits of many
small businesses are small and uncertain, and interest in contributing to a retirement
plan among many young and low-earning workers is currently weak. These realities mean that
it is not enough simply to target the small employer, but it is also important to target
employees with messages regarding the need to plan and save for their retirement.

National Health Expenditures Top $1 Trillion Dollars in 1996—National health expenditures reached a record high of more than $1 trillion in 1996, but
at the same time the rate of growth was the slowest recorded since 1960 (4.4 percent),
according to data recently released by the Health Care Financing Administration. The
average annual growth rate of national health expenditures has been slowing for a number
of years. From 1980 to 1990, it was 11 percent. From 1990 to 1993, it was 8.6 percent, and
between 1995 and 1996, 4.4 percent.