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CRS Examines Access to, and Participation in, Employer-Sponsored Plans

Government Affairs

While a strong majority of employers provide access to a plan, that doesn’t necessarily spell participation rates that match, says the Congressional Research Service (CRS). 

In a new report, “Worker Participation in Employer-Sponsored Pensions: Data in Brief,” the CRS provides data on the percentage of U.S. workers who can and do participate in employer-sponsored pension plans—which the report defines as comprised of both defined benefit and defined contribution plans. The information originates from the National Compensation Survey conducted by the Bureau of Labor Statistics (BLS). 
 

Availability Equals Participation 

Not all workers who have access to a retirement plan at work participate in it, says the report. Approximately 70% of all U.S. workers have access to plans, but about 55% of U.S. workers participate in one.

In addition, notes the CRS, the take-up rate differs between DB and DC plans. Since most DB plans are funded entirely from employer contributions, among workers who have access to DB plans, the take-up rate is 80%, but the take-up rate among workers who have access to DC plans is 72%. The CRS attributes this to two factors: 

  1. until recently, workers had to make an active decision to participate in DC plans, which meant that workers might delay (and possibly forget about) participating; and 
  2. since DC plans are at least partially funded by employee contributions, some workers might prefer to receive the money as current wages rather than delay the income until they retire.

Rates Vary

Access to an employer-sponsored retirement plan, and participation rates, vary by a variety of measures. Highlights of these differences include the following: 

  • Full-Time vs. Part-Time. More full-time than part-time workers have access to retirement plans, says the CRS. More specifically, among civilian workers, twice as many full-time workers than part-time have access—80% vs. 40%. 
  • Public Sector vs. Private Sector. More state and local public sector workers (91%) have access to employer-sponsored retirement than private-sector workers; more specifically, 91% vs. 67%. And that disparity holds for both DB and DC plans: 

 

Type of Plan 

% of Employees with Plan Access, Public Sector

% of Employees with Plan Access, Private Sector

DB Plan 

86%

15

DC Plan 

64

37

 

  • Wage Levels. Access to employer-sponsored retirement plans is greater for private-sector workers in higher-paying occupations, says the CRS. Among private-sector workers in occupations with the lowest 25% of average wages access stands at 42%. Access more than doubles to 88% for their counterparts in occupations with the highest 25% of average wages. 
  • Employer Size. Access increases with employer size, the CRS reports. Just under half of private-sector workers whose employers have fewer than 50 employees have access to a plan, while 88% of those whose employers have 500 or more employees do.