Employment-Based Retirement Plan Participation: Geographic Differences and Trends, 2012

44 Pages Posted: 17 Nov 2013

See all articles by Craig Copeland

Craig Copeland

Employee Benefit Research Institute (EBRI)

Date Written: November 2013

Abstract

This paper examines the level of participation by workers in public- and private-sector, employment-based pension or retirement plans, based on the U.S. Census Bureau’s March 2013 Current Population Survey (CPS), the most recent data currently available. It begins with an overview of retirement plan types and participation in these types of plans and describes the data used in this study, along with their relative strengths and weaknesses. Results on participation in employment-based retirement plans are analyzed for 2012 across various worker and employer characteristics. The report then explores retirement plan participation across U.S. geographical regions, including state-by-state comparisons, as well as comparisons by certain consolidated statistical areas (CSAs). In addition, trends from 1987-2012 in employment-based retirement plan participation are presented across many of the same worker and employer characteristics as used for 2012. Furthermore, an accounting of the number of individuals who worked for employers that did not sponsor a plan and of workers who did not participate in a plan in 2012 is provided by various demographic and employer characteristics.

In 2012, 39.4 percent of all workers (or 61.6 million Americans) participated in an employment-based retirement plan, compared with 39.7 percent and 61.0 million in 2011. But among full-time, full-year wage and salary workers ages 21 to 64 -- those with the strongest connection to the work force -- 53.5 percent participated. Being nonwhite, younger, female, never married; having lower educational attainment, lower earnings, poorer health status, no health insurance through one’s own employer; not working full time, full year, and working in service occupations or farming, fisheries, and forestry occupations were all associated with lower levels of participation in a retirement plan. Those working for smaller firms, private-sector firms, or firms in the “other” (not professional) services industry were also less likely to participate in a plan than their comparison groups. Geographic location also affects the likelihood of participating in a retirement plan. Workers in the South and West were less likely to participate in a plan than those in other regions of the country. 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 2010-2012 levels stabilized as the economy was experiencing stable growth. As things stand now, the current economic environment is likely to result in 2013 participation numbers that are very similar to 2012 with a potential slight increase, though many other underlying factors will continue to affect the future direction of this trend.

Keywords: Defined benefit plans, Defined contribution plans, Demographics, Employment-based benefits, Pension plan coverage, Pension plan participation, Retirement plans

JEL Classification: J1, J15, J16, J26, J33

Suggested Citation

Copeland, Craig, Employment-Based Retirement Plan Participation: Geographic Differences and Trends, 2012 (November 2013). EBRI Issue Brief, No. 392 (November 2013), Available at SSRN: https://ssrn.com/abstract=2355092

Craig Copeland (Contact Author)

Employee Benefit Research Institute (EBRI) ( email )

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