Retirement Income View Brighter for Couples

Pension plan participation is much higher among couples when they are viewed as a unit, rather than measured separately as married men and married women.

According to an analysis by the Social Security Administration (SSA), participation rates in employer-provided pension plans were relatively constant in the time frame covered by the most recent analysis, between 1998 and 2009. Among all full-time workers, about two-thirds participated in a pension plan in both years.

Nonmarried workers, both men and women, were less likely to participate in a pension plan than were their married counterparts. About 72% of married men (with spouse present) working full-time participated in a retirement plan in 1998 and 2009. Similarly, 72% of married women (with spouse present) working full-time participated in a pension plan in 2009, an increase of about 5 percentage points from the 1998 participation level.

However, the plan participation rate was found to be higher when looking at couples as a unit of analysis instead of just looking at married workers. Both in 1998 and 2009, about 80% of couples had at least one of the spouses participating in a pension plan, an increase of about 10 percentage points compared with looking at married men and married women separately.

What this suggests, said the SSA, is that previous studies have focused on married workers without considering coverage of their spouses. The SSA concluded that therefore these studies are likely to have underestimated the participation rate in pension or retirement plans from which the couples are expectedly going to draw their retirement income.

The analysis also found:

  • While about 30% of married men with a spouse present did not participate in a plan both in 1998 and 2009, when their spouses’ participation was factored in, only in 20% of couples did neither spouse participate in a pension plan;
  • In about 10% of couples in 2009, the wife was the only one participating in a pension plan compared with about 37% of couples where the husband was the only one participating;
  • 60% of couples in 2009 had at least one of the spouses contributing to a defined contribution (DC) plan. In half of those couples, the husband was the only one contributing; and
  • Among couples where both spouses contributed to a plan, the wife’s contribution comprised around 42% of the total family contribution both in 1998 and 2009.

The SSA analysis used Survey of Income and Program Participation (SIPP) data from the Census Bureau, matched with Social Security administrative records, to examine participation in employer-provided retirement plans by plan type among couples where both spouses are present and the husband is a full-time wage and salary worker ages 25 to 60. The analysis focused on measuring participation by specific plan type for married couples, rather than married workers separately, because couples were found to share their retirement income, regardless of whether those contributions are through the husband or the wife.

More information on the analysis can be found here.