This Issue Brief presents results on pension and retirement plan participation from the pension and retirement plan topical module of the 1996 Survey of Income and Program Participation (SIPP) and past employment benefit supplements to the 1979, 1983, 1988, and 1993 Current Population Surveys (CPS). The focus is on the 1988 and 1993 CPS and the 1996 SIPP results, as these have the most closely consistent detailed data on pension and retirement plan participation on an individual-worker basis and permit general comparisons of participation and plan type-defined contribution or defined benefit plan coverage. Further, the 1996 SIPP topical module 7 results, which were fielded from March to June of 1998, were released by the U.S. Census Bureau in February 2002, so they represent the most recent data currently available.
The sponsorship rate for all workers for pay age 16 and over (defined as the fraction of workers whose employer or union sponsors a pension or retirement plan for any of the employees at the workers' place of employment)was 60 percent in 1998, according to SIPP. The percentage of all workers participating in a plan regardless of whether the plan was sponsored at the workers' place of employment was 44 percent in 1998. The vesting rate, the percentage of workers who say they were entitled to some benefit or lump-sum distribution if they left their job at the time of, or very near to the time of, their interview, was 41 percent in 1998.
Participation rates in a retirement plan increased with age through age 50, and then decreased. In 1998, 7 percent of 16-20-year-old workers participated in a pension plan, while 60 percent of 41-50-year-olds did so. The participation rate then decreased, reaching 23 percent for those age 65 or older. As a workers' income increased, the likelihood that he or she participated in a retirement plan also increased. For those making less than $5,000 annually in constant 1993 dollars in 1998, 13 percent participated in a pension plan, compared with 75 percent of those making $50,000 or more in 1993 dollars.
In 1998, 62.7 percent of participants were determined to have a defined contribution plan as their primary plan, significantly higher than the 49.8 percent found in 1993. Correspondingly, a smaller percentage of workers had a defined benefit plan as their primary plan: 35.1 percent said a defined benefit plan was their primary retirement plan in 1998, compared with 38.2 percent in 1993. This is substantially lower than the 1988 level of 56.7 percent of participants who reported their primary plan was a defined benefit plan.
