EBRI Issue Brief

Employment-Based Retirement Plan Participation: Geographic Differences and Trends, 2012

Nov 12, 2013 44  pages


  • Retirement plan participation varies widely by type and characteristics of both workers and employers. In 2012, 39.4 percent of all workers (or 61.6 million Americans) participated in an employment-based retirement plan, compared with 39.7 percent and 61.0 million in 2011. But among full-time, full-year wage and salary workers ages 21 to 64—those with the strongest connection to the work force—53.5 percent participated.
  • Being nonwhite, younger, female, never married; having lower educational attainment, lower earnings, poorer health status, no health insurance through one’s own employer; not working full time, full year, and working in service occupations or farming, fisheries, and forestry occupations were all associated with lower levels of participation in a retirement plan.
  • Those working for smaller firms, private-sector firms, or firms in the “other” (not professional) services industry were also less likely to participate in a plan than their comparison groups. Geographic location also affects the likelihood of participating in a retirement plan. Workers in the South and West were less likely to participate in a plan than those in other regions of the country.
  • The overall percentage of females participating in a plan was lower than that of males (the retirement plan-participation gender gap significantly closed from 1987?2009 before widening in 2010–2012). Yet, when controlling for work status or earnings, the female participation level actually surpassed that of males.
  • Black and native-born Hispanic workers had participation levels much closer to those of white workers within each age group. Non-native-born Hispanics had substantially lower participation levels than native-born Hispanics, even when controlling for age and earnings. This resulted in Hispanics as a group appearing to lag significantly in terms of retirement plan participation, when only the non-native Hispanics actually had participation levels substantially below those of all other workers.
  • Retirement plan participation by workers is strongly tied to macroeconomic factors such as stock market returns and the labor market. The stronger macroeconomic conditions of the late 1990s resulted in higher levels of participation, while less-positive macroeconomic conditions of the 2000s led to lower levels of participation.
  • The downturns in the economy and stock market in 2008 and into 2009 showed a two-year decline in both the number and percentage of workers participating in an employment-based retirement plan. The 2010–2012 levels stabilized as the economy was experiencing stable growth. As things stand now, the current economic environment is likely to result in 2013 participation numbers that are very similar to 2012 with a potential slight increase, though many other underlying factors will continue to affect the future direction of this trend.