Age making t he contributions, regardless of whether the worker is offered a plan) • Employer survey: Eighty-two percent of state and local government employees participate in an • Participation in retirement plans increases with the age of the worker. For example, among Defined Contribution Plan Eligibility (Access) and Balances by 6 employment-based retirement plan compared with 52 percent of private industry workers. workers ages 21–24, the percentage participating is 49 percent of the percentage participating 14 Race/Ethnicity Employment-Based Retirement Plan Access & Participation: By the • Among private industry workers, 11 percent participate in a DB plan, and 48 percent participate among those ages 55–64. This percentage is 80 percent for those ages 25–34. 7 in a DC plan. Numbers (2022) • The percentage of families with family heads of different races and ethnicities eligible for or G •e nde Individ r ual survey: Forty-eight percent of all workers participate in an employment-based offered a DC plan is substantial. This is also true for the median balances of those with DC 8 retirement plan, meaning 52 percent of workers are not participating. • Participation differences by gender are minor, as the percentage of males participating in an plans. Definitions: Access, or coverage, refers to employees who work for employers that offer retirement • Among public-sector wage and salary workers ages 21–64, 75 percent participate in an employment-based plan is 97 percent of the percentage of females. • Sixty percent of families with working White family heads are eligible to participate in a DC plan plans to them or provide them the opportunity to build assets for retirement, regardless of the employment-based retirement plan, compared with 48 percent of private-sector wage and compared with 48 percent of families with working Black/African American family heads and 32 employees taking advantage of the opportunity. Participation refers to employees actively contributing salary workers ages 21–64. Race percent of families with working Hispanic family heads. to the offered employment-based retirement plans and/or their employers making contributions to the • Among private-sector wage and salary workers, 41 percent participate in only a DC plan, 1 percent • Minority workers are much less likely to participate in a plan than are White workers. • The median DC plan balances of families having this plan type with a White family head is plan. In other words, these are employees who are actively building up assets for retirement. The take- participate in only a DB plan, and 8 percent participate in both plan types. This compares with 7 Specifically, the percentage of Black workers participating in a plan is 79 percent of the $55,000, compared with a median balance of $30,000 for families with either Black or Hispanic up rate is the percentage of employees who are offered a retirement plan who are participating. 9 percent, 28 percent, and 10 percent, respectively, in 1979. percentage of White workers, while the percentage of Hispanic workers is 60 percent of the family heads. White-worker percentage. Take-Up (ratio of workers participating to workers with access) Issue: Access to defined contribution (DC) plans can have a significant impact on reducing the savings • Employer survey: Ninety percent of state and local government workers who have access to a Education shortfalls that workers could face in retirement. The average retirement shortfall of individuals ages 35– retirement plan participate in the plan, compared with 75 percent among private industry 15 • As educational attainment increases, the likelihood of participating in an employment-based 39 who do not have access to DC plans over their entire career is $78,046, compared with $14,638 for Private Industry Employers Offering Retirement Plans 10 11 workers. Among private industry workers, the 1 take-up rate for DC plans is 73 percent. retirement increases. The percentage of workers without a high school diploma who participate those with access to DC plans for 20 or more years. • Individual survey: Seventy-nine percent of family heads offered a DC plan participated in the in a plan is 32 percent of the percentage of workers with a graduate or professional degree. For • Fifty percent of establishments in the private industry offer retirement benefit plans. By plan type, 12 plan. those with a high school diploma, the percentage participating is 60 percent of the percentage 10 percent offer DB plans and 45 percent offer DC plans. However, this offering varies significantly Data: There are various government surveys in which estimates can be calculated of the percentage of of those with a graduate or professional degree, and for those with a college degree, it is 91 by characteristics of the establishments. workers with access to employment-based plans and of the percentage of workers who participate in percent of the graduate degree percentage. • Establishment size, measured by the number of employees, is one of the most significant factors in them. However, these surveys use different methodologies to collect the data, and the analysis of the the offering of a retirement plan. Specifically, 46 percent of establishments with 1–49 workers offer data also differs between studies, but similar statistics and trends emerge on access and participation Income 2 re tirement benefit plans, compared with 78 percent of establishments with 50–99 workers, 88 from these sources. • Participation increases with the annual earnings of workers. For instance, the 13 percentage percent of establishments with 100–499 workers, and 94 percent of establishments with 500 or Worker Demographics and Participation more workers. participating among those with annual earnings of less than $20,000 is 20 percent of the Summary Statistics 6 • Offering retirement benefits plans also varies by the industry of the establishments. For instance, percentage of those with annual earnings of $75,000 or more. Workers with earnings of Bureau of Labor Statistics, “Employee Benefits in the United States – March 2022.” http:// 92w p we wrc .be lsn .g t ov of e /nestablish ws.releam se/p endts f/ein bs2 th .p ed utili f. Thi ty s su industr rvey ey xcoff lude er re s fed tire eram l, a eg nrt icben ulture afi l, ta p nd lan prs, ivawh te e hous reae s only hold 27 $40,000–$49,999 have a likelihood of participating in a plan that is 73 percent of the level for Access (workers who are offered a retirement plan — either a defined contribution (DC) or defined workers. percent of establishments in the leisure and hospitality industry do so. Finance and insurance workers with earnings of $75,000 or more. benefit (DB) plan) 7 Burin ea dustry u of Lab eo sta r St blish atistic ms, “ enN ts ata iona lso ha l Com ve a pens high ation Sur offev r ra ey: tE em at ploy 73 e p e B ee rc ne efit nt, s in t com hepar Unit ed edwi Stth onl ates, Ma y 30 rch 2022 perce .”n t of • Employer survey: Ninety-two percent of state and local government employees have access to September 2022, https://www.bls.gov/ncs/ebs/benefits/2022/home.htm. This survey excludes federal, agricultural, and establishments in the “other” services industry. Employer Size 3 private household workers. an employment-based retirement plan, compared with 68 percent of private industry workers. 8 • As the size, measured by number of employees, of the worker’s employer increases, so does • C ope Am land, on C g ra pri ig, vate in “Retiredustr ment y Pla wor n Pa ker rtics, ipa15 tion a pend rcetn he t h Ca ur vre e ac nt Pcop ess t ulato a DB ion Surv p eyla : n The , an Im d p66 ac p t of erc Ne ew n t Inc ha om ve e Questions on These Estimate4 s,” EBRI Issue Brief, no. 499 (Employee Benefit Research Institute, January 30, 2020). the likelihood of the worker participating in a retirement plan. In fact, the likelihood of an access to a DC plan. Brady, Peter J., and Steven Bass. 2019. “Who Participates in Retirement Plans, 2016.” ICI Research Perspective 25, no. employee who participates in a retirement plan working for an employer with fewer than 10 • Individual survey: 52.3 percent of U.S. workers are covered by a workplace retirement plan or 16 6 (August). Available at www.ici.org/pdf/per25-06.pdf. This research shows that CPS data have consistently Motivations for and Barriers to Offering Retirement Benefits employees is 36 percent of the likelihood of 5an employee working for an employer with 1,000 underreported the percentage of workers who participate in an employment-based retirement plan using Internal 47.7 percent U.S. workers are not covered. Revenue Service (IRS) Statistics of Income (SOI) data. The numbers particularly diverged starting in 2014 after a CPS or more employees. The relative differences for workers at employers with 10–49 employees redesign. However, CPS went through another redesign in 2019, so the estimates from Copeland (2020) are closer to • The most likely cited main reasons for small and mid-sized businesses to offer a retirement plan are and 50–99 employees to those at employers of 1,000 or more employees are 56 percent and those found in other data sources. helping workers save for retirement (48 percent) and helping to attract and retain workers (31 9 73 percent, respectively. Participatio n (workers who are actively contributing to a retirement plan or whose employers are Employee Benefit Research Institute, “Putting Numbers to the Shifting Private-Sector Retirement Landscape,” EBRI percent). Fast Facts, February 25, 2021, no.385 https://www.ebri.org/docs/default-source/fast-facts/ff-385-dcplans-25feb21.pdf. • The most often cited reasons for not offering a plan are that they are too expensive to set up (37 10 1 Bureau of Labor Statistics, “Employee Benefits in the United States – March 2022.” ® percent), the organization does not have the resources (22 percent), and employees are not VanDerhei, Jack, “Retirement Savings Shortfalls: Evidence From EBRI’s 2019 Retirement Security Projection Model ,” http://www.bls.gov/news.release/pdf/ebs2.pdf. This survey excludes federal, agricultural, and private household EBRI Issue Brief, no. 475 (Employee Benefit Research Institute, March 7, 2019). interested (17 percent). workers. 2 The government survey data used for this study include the Current Population Survey (CPS), IRS’ Statistics of 11 Bureau of Labor Statistics, “National Compensation Survey: Employee Benefits in the United States, March 2022.” Income (SOI), the Survey of Consumer Finances (SCF), and the National Compensation Survey (NCS). 14 Se C pop tem ela be nd, r 20 C22 rai, ght , “tThe ps://ww Status w.b of ls.g Am ove/n ric ca s/e n Fa bs/ m bili ene es' fit As/ cc2u02 m2/ ula ho tions me.ht in I mndivi . This d ua sul Ac rvec you exc ntlude Rets fe irem de ent ra l, P la ag ns ric a ult nd ural, and 3 p D rB iff iv ur e art ee e anc u o hous es b f La ey hold b Ra or c St w e/E or attis khni e tic rs. c s, “ it y: Em An An ploye ae ly si Bs of enefitthe s in t 20he 19 Unit Surveedy St of aC te onsu s – Ma merrc h 2022 Finance .”s,” EBRI Issue Brief, no. 527 ( ht Etm p:// ploy we wew B .b els ne .g fit ov Re /ne sea ws.r rch I elens ase/p titutdef/ , e Ma bs2 rc.p h 11, df. Thi 202 s su 1).r vey excludes federal, agricultural, and private household 12 Copeland, Craig, “The Status of American Families' Accumulations in Individual Account Retirement Plans and workers. 15 Diff Be ur re enc au o es b f La y Ra borc e St /E atthni istic cs, “ ity: N Aa n An tiona al C lysiom s of petns hea 20 tion Sur 19 Sur vv ee yy : E of mC ponsu loyeem B ee rne Fifit nas in t nces,” heE Unit BRIe Id ss St ue a tB ers, Ma ief, no. rch 2020 527 .” 4 ( Se EBm p ur tp e e loy m au o beeerf La B 20 ene 20 bofit , r ht St Re ta ptsea s:/ istic /ww rc s, “ h I w N ns .b attls it iona u .g tov el C , /n Ma om cs rc /e ph 11, ebns s/a bte 20 ion Sur ne 21 fit)s/ . 2 ve 02 y: 0/ Ee m m pp loy loy ee ee B -b ee ne ne fit fit s in t s-in-he the Unit -unie te dd St -st aa te te s, Ma s-marrcch 2022 h-2020.” .p df. September 2022, https://www.bls.gov/ncs/ebs/benefits/2022/home.htm. This survey excludes federal, agricultural, and 13 16 P Ae ll st w a Ctha istriit cs in t able h Tr is se usts, “ ctio En a mprloy e fr eom r Ba C rrop ier es t lan o da , nd CraMoti ig, “v Re attions irem for ent Offe Plan P ring arRe ticipa tiretm ion a ent nd Bene the fit C s ur - rIe ns ntight Pop s fr ula om tion Pew’s 5 Sur na Sa tiona vb ee ylha : l sur The us, vI e John m y p of ac( sm t20 of a 22 ll b N)e . us w The iIne ncss C om ur es, r ee ”Que nt June St st a ion t20 e of s on 17US , ht These W tps: or// k p w Ela st w cim w e .p Re ate etw s,” irte rm us Ee B ts.or nt RI P Ig la ss /e n C ue n/ ov r Bersea e ierfa , r gno. ceh. -W a49 nd ha 9 (E -ratn on a m ly p Psi lo es/ ns ye is ion Re e su Bee-ne sea fit rch C Re br ounc ie sea fs/2 ril Wor c01 h I7/ ns k 06 ting it/e utm P ea , pp Ja loy enua r,e r (- 20 rbya 22 r 30 rie -, 07 r20 s)-.to 20 -) a.nd -motivations-for-offering-retirement-benefits.