The study found that in 2009, 34% of retirees received income either directly or through a spouse from private-sector retirement plans, compared with 21% in 1975. The median income received by those with private-sector pension income increased to $6,000 in 2009, from about $4,500 in 1975 (adjusted for inflation).
“Looking at the entire period from 1975 to 2009, the data show that, contrary to conventional wisdom, private-sector pension income has become more prevalent, not less prevalent, over time,” said Peter Brady, ICI senior economist and co-author of the report, in a news release.
Access to private-sector retirement plans for U.S. workers has remained consistent since the 1970s. In 1975, 87% of active participants in private-sector retirement plans had primary coverage through DB plans, dropping steadily to below 50% by the 1990s. By 1998, 56% of active participants in private-sector retirement plans were covered by a primary DC plan, and 39% had a supplemental DC plan, the ICI data showed.
“The good news is private-sector retirement income has increased over time and, to date, the shift from DB pensions to DC pensions has not led to a decline in private-sector pension income,” said Brady. “Furthermore, the typical amount of private-sector pension income that we observe in the historical data can be generated by relatively modest accumulations in DC plans or IRAs.”
ICI also said Social Security benefits continue to serve as the foundation for retirement security in the U.S. Social Security represents the largest component of retiree income and the predominant income source for lower-income retirees. In 2009, Social Security benefits were 58% of total retiree income and more than 85% of income for retirees in the lowest 40% of the income distribution. Even for retirees in the highest income quintile, Social Security benefits represented more than one-third of income in 2009.