Employment-Based Retirement Plan Participation: Geographic Differences and Trends

October 2004
EBRI Issue Brief #274
Paperback, 31 pp.
PDF, 695 kb
Employee Benefit Research Institute, 2004

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Executive Summary

• This Issue Brief examines the level of participation by workers in employment-based (both public- and private-sector employers) pension or retirement plans, based on the U.S. Census Bureau’s March 2004 Current Population Survey (CPS), the most recent data currently available.

• In 2003, after two years of declining overall levels of worker participation in employment-based retirement plans, the percentage of workers participating in such plans had either leveled off or slightly increased. Specifically, the percentage of all workers participating in an employment-based retirement plan crept up nominally, from 41.8 per-cent in 2002 to 42.0 percent in 2003, while the percentage of full-time, full-year wage and salary workers ages 21–64 (those most likely to be offered a retirement plan at work) increased from 56.7 percent in 2002 to 57.1 percent in 2003.

• Most of the increased participation was among workers who had experienced participation declines in the prior two years, in some cases to their lowest levels since at least 1987. Workers showing a higher likelihood of retirement plan participation in 2003 include those who worked full time, full year, for large employers or public-sector employers, or were high earners.

 • Being nonwhite, younger, female, never married; having lower educational attainment, lower earnings, poorer health status, no health insurance through own employer; and not working full time, full year were all associated with a lower level of participation in a retirement plan. In addition, workers working for smaller firms, private-sector firms, or firms in the personal services industry were also less likely to participate in a retirement plan. Geographic location of workers also is a factor, with those in the South and West (Southwest in particular) less likely to participate in a plan than workers in other regions of the country.

• While the overall percentage of females participating in a retirement plan was lower than that of males, when controlling for work status or earnings the female participation level surpassed that of males. Furthermore, black and native-born Hispanic workers had participation levels much closer to those of white workers within each age group. Nonnative-born Hispanics had substantially lower participation levels than native-born Hispanics, even when controlling for age and earnings.