Summary
Retirement Annuity and Employment-Based Pension Income, Among Individuals Age 50 and Over: 2006
• Demographics affect pension income: The most recent data from the March 2007 Current Population Survey confirm earlier findings that gender, marital status, age, education, and other demographic variables have a significant impact on the likelihood of a worker receiving a retirement annuity and/or employment-based pension income in retirement.
• Educational differences: In 2006, 27.5 percent of men age 50 and older with a graduate-level education received an annuity and/or pension income, compared with 21.7 percent of men without a high school diploma—a differential of almost 6 percentage points. Men with graduate-level degrees received nearly three times the median annuity and/or pension income of men without a high school diploma.
• Gender differences still big but shrinking: A woman age 65 or over in 2006 was almost two-thirds as likely to receive an annuity and/or pension payment as her male counterpart; if she did receive one, her mean benefit was likely to be about 65 percent of that received by a man in the same age group. However, as other EBRI research has shown, women’s participation in retirement plans has risen significantly relative to men in recent years, closing the “gender gap” in retirement plan participation—even though retirement plan participation has been declining for both men and women. Hence, the aggregate pension and annuity recipiency for women and the amounts they receive are likely to increase over time as these younger generations retire.
Finances of Employee Benefits, 1950 - 2006
• Total spending: In 2006, both public and private employers spent a gross total of about $2.33 trillion for major employee benefit programs. This is up almost 50 percent from 2000.
• Retirement still #1, but health catching up fast: Of the 2006 total spent on benefits, retirement benefit payments of $1.17 trillion accounted for 50.0 percent of total benefit payments, and health benefit payments of $1.01 trillion accounted for 43.5 percent. Health costs are growing fast and are likely to soon outstrip retirement and become the major source of benefits expense.