Unequal Access to Retirement Benefits

Only half of workers have the opportunity to use a retirement plan at work.

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The opportunity to participate in a 401(k) or pension plan is only available for about half of the workforce. Just 49.2 percent of all workers had access to a retirement plan at work in 2010, according to a recent Employee Benefit Research Institute analysis of Census Bureau data, and just 39.8 percent of employees participated in the plan. This is virtually unchanged from the 39.6 percent of workers who utilized retirement benefits in 2009.

[See 6 Retirement Benefits in Decline.]

Among the 152.6 million Americans who were employed in 2010, only 75 million people worked for an employer or union that sponsored a pension, 401(k), or other type of retirement plan, and 60.7 million individuals participated in those plans, EBRI found. If you look only at wage and salary workers ages 21 to 64, which excludes the self employed and very young and old workers, about 54.2 percent of these employees were offered a retirement plan at work and 44.9 percent used the retirement benefit.

But some specific groups of workers were more likely than others to be offered and participate in a retirement plan. Here’s a look at who has access to retirement benefits at work.

Public sector employees. Workers in the public sector are significantly more likely to be offered and utilize their retirement benefits than their counterparts in the private sector. Some 80.3 percent of public sector workers between ages 21 and 64 were offered an employment-based retirement plan in 2010 and 71.9 percent participated. In contrast, only about half (49.1 percent) of private sector workers were even offered a retirement plan at work and 39.5 percent took advantage of the plan.

Full-time workers. Full-time, full-year workers have better access to retirement benefits than part-time, seasonal, and temporary workers. Some 61.6 percent of full-time employees were offered retirement benefits at work and 54.5 percent utilized the plan, EBRI found.

[See Traditional Pensions are Casualties of a Retirement Heist.]

Older workers. Older workers are more likely to than younger employees to take advantage of retirement benefits when they are offered. Just 17.2 percent of wage and salary workers ages 21 to 24 participated in a retirement plan in 2010, compared with 53.5 percent of employees ages 55 to 64.

Highly educated workers. Access to workplace retirement benefits increases with educational attainment. Almost 66 percent of those holding a graduate or professional degree participated in a retirement plan in 2010, compared to 17 percent of workers without a high school diploma.

Married employees. Married workers were more likely to participate in a retirement plan than never-married workers in 2010. And women who work full-time throughout the year take advantage of the retirement plan in greater numbers (55.5 percent) than similarly employed men (53.8 percent).

High earners. Retirement plan participation generally increases with earnings from about 18 percent among those earning between $10,000 and $19,999 to 70.6 percent for those whose paychecks exceed $75,000.

[See Jobs That Still Offer Traditional Pensions.]

Professionals. Individuals working in professional and related occupations had the highest probability of participating in a retirement plan (59.5 percent). Workers in farming, fishing, and forestry occupations had the lowest likelihood of using a retirement plan (15.8 percent).

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