Employment-Based Plan Participation Steady in 2010

The portion of full-time workers ages 21‒64 who participated in an employment-based retirement plan remained stable at 54.5% in 2010, according to the Employee Benefit Research Institute (EBRI).

This makes 2010 the second year in the last six years without a decrease in participation, EBRI said.

In general, workers in Midwestern, Mid-Atlantic, and Northeastern states had the highest levels of participation in employment-based retirement plans, while those in Southern and Western states had the lowest levels.

Among all 152.6 million Americans who worked in 2010 (including part-time workers), 75 million worked for an employer or union that sponsored a retirement plan and 60.7 million participated in the plan. This translates into a sponsorship rate (the percentage of workers working for an employer or union that sponsored a plan) of 49.2% and a participation level of 39.8%. Phrased another way, slightly less than half of all workers were offered a retirement plan, and roughly 40% participated in one.

Among wage and salary workers ages 21-64, the sponsorship rate increased to 61.6% and the portion participating increased to 54.5%.

Public-sector workers are far more likely than their counterparts in the private sector to be in a retirement plan. About 72% of public-sector wage and salary workers ages 21-64 participated in an employment-based retirement plan, compared with 39.5% of private-sector workers.

“Retirement plan participation by workers is strongly tied to macroeconomic factors such as stock market returns and the labor market,” said Craig Copeland of EBRI, author of the report. “Better conditions of the late 1990s resulted in higher levels of participation, while worse conditions of the 2000s led to lower levels of participation. The economic crisis of 2008 and 2009 clearly had an impact on the most recent participation data.”

The percentage of wage and salary workers ages 21–64 participating in a retirement plan in 2010 increased with age. For those ages 21–24, 17.2% participated in a plan, compared with 53.5% of those ages 55–64.

Hispanic employees were significantly less likely than both white and black employees to participate in a retirement plan. The gap between the percentages of black and white plan participants narrows when compared across earnings levels, with blacks surpassing whites at incomes of $75,000 or more. In contrast, the gap between Hispanics and whites persisted across all earnings groups, although it showed some narrowing in the higher earnings groups.

Among workers without a high school diploma, 17% participated in a retirement plan, compared with 65.8% for those with a graduate or professional degree.

The states with the lowest levels of participation were Florida, Nevada, Louisiana, Mississippi, South Carolina, and Georgia. States with the highest participation rates were West Virginia and North Dakota.

More findings from the EBRI report, "Employment-Based Retirement Plan Participation: Geographic Differences and Trends, 2010,” are available at http://www.ebri.org.