Retirement plan participation stabilizing, EBRI finds

As the economy slowly recovers from the recession, participation in employment-based retirement plans has stabilized, according to new research by the Employee Benefit Research Institute (EBRI).

In 2011, the percentage of workers participating in an employment-based retirement plan was essentially unchanged from a year earlier, the EBRI report found. The percentage of all workers (including part-year, part-time, and self-employed) participating in an employment-based retirement plan moved from 39.6% in 2009, to 39.8% in 2010, to 39.7% in 2011.

“The increase in the number of workers participating in 2011 halted the three year decline from 2008–2010,” said Craig Copeland, senior research associate at EBRI and author of the report. “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 and 2011 participation levels stabilized as the economy recovered.”

The type of employment has a major impact on participation rates, the EBRI report found. Among full-time, full-year wage and salary workers ages 21–64 (those with the strongest connection to the work force), 53.7% participated. However, this rate varies significantly across various worker characteristics and the characteristics of their employers.

For instance, being nonwhite, younger, female, never married; having lower educational attainment, lower earnings, poorer health status, no health insurance through their employer; not working full time, full year, and working in service occupations or farming, fisheries, and forestry occupations were all associated with a lower level of participation in a retirement plan. Workers in the South and West were also less likely to participate in a plan than those in other regions of the country.

Source: EBRI press release #955, November 27, 2012.

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For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer’s Benefits Reports.

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