Employment-Based Retirement Plan Participation: Geographic Differences and Trends, 2008

November 2009
EBRI Issue Brief #336
Paperback, 40 pp.
PDF, 675 kb
Employee Benefit Research Institute, 2009

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Executive Summary

SPONSORSHIP RATE: About 56 percent of all working-age (21–64) wage and salary employees work for an employer or union that sponsors a retirement plan. Among full-time, full-year wage and salary workers ages 21–64 (those with the strongest connection to the work force), just under 63 percent worked for an employer or union that sponsors a plan.

PARTICIPATION LEVEL: Among full-time, full-year wage and salary workers ages 21–64, just under 55 percent participated in a retirement plan.

• Trend: This is virtually unchanged from just over 55 percent in 2007. Participation trends increased significantly in the late 1990s, and decreased in 2001 and 2002. In 2003 and 2004, the participation trend flattened out. The retirement plan participation level subsequently declined in 2005 and 2006, before the significant increase in 2007 and a slight decline in 2008.

• Age: Participation increases with age (62.7 percent for wage and salary workers ages 54–64, compared with 29.4 percent for those ages 21–24).

• Gender: Among all workers, men had a higher participation level than women, but among full-time, full-year workers, women had a higher percentage participating than men (56.2 percent for women, compared with 53.7 percent for men). Female workers’ lower probability of participation in the aggregate results from their overall lower earnings and lower rates of full-time work in comparison with males.

• Race: Hispanic wage and salary workers were significantly less likely than both white and black workers to participate in a retirement plan. The gap between the percentages of black and white plan participants that exists overall narrows when compared across earnings levels.

• Geographic differences: Wage and salary workers in the South, West, and Southwest had the lowest participation levels (Florida had the lowest percentage, at 44 percent) while the upper Midwest and Northeast had the highest levels (Iowa had the highest participation level, at approximately 68 percent).

• Other factors: White, more highly educated, higher-income, and married workers are more likely to participate than their counterparts.

THOSE WITHOUT A PLAN: Overall in 2008, 78.0 million workers worked for an employer/union that did not sponsor a retirement plan and 94.1 million workers did not participate in a plan. But looking only at workers who work full-time, full-year, make $10,000 or more in annual earnings, and work for an employer with 100 or more employees, only 4.9 million workers (or 7 percent) would be included among those working for an employer that did not sponsor a plan.