As of March 2022, 69% of private industry employees had access to an employer-provided retirement plan according to new data released recently by the U.S. Bureau of Labor Statistics.
Fifty-two percent of private industry workers chose to participate in a retirement plan, for a take-up rate of 75%.
Among state and local government workers, 92% had access to a retirement plan and 82% chose to participate, for a take-up rate of 90%. It’s no surprise that defined benefit plans were more prevalent for state and local government workers in 2022. Only 15% of private industry workers had access to a DB plan, compared with 86% of state and local government workers.
Also no surprise, defined contribution plans including 401(k)s were more prevalent for private industry workers. Sixty-six percent of private industry workers had access to a DC plan. Of those workers, 48% participated, resulting in a take-up rate of 73%.
That 48% of private workers participating in a DC plan figure was also cited by the Employee Benefit Research Institute in its recent “Workplace Retirement Plans: By the Numbers” report, which also revealed that there were 85.3 million private-sector workers who were active participants in a DC plan in 2020. This includes 72.2 million private-sector workers who were active participants in 401(k) plans.
In a study released in July 2022, AARP reported that nearly 57 million people—48% of American private sector employees ages 18 to 64—work for an employer that does not offer either a traditional pension or a retirement savings plan.
AARP’s research found that employees at small businesses are less likely to have access to a retirement plan than those at larger workplaces. About 78% of workers at companies with fewer than 10 employees and 65% who work in companies with 10 to 24 employees lack access to a plan. Even among employers with more than 1,000 workers, one-third of employees do not have access to an employer-sponsored retirement plan.
Getting back to the new BLS data, it also found 39% of state and local government workers had access to a DC plan and 19% participated, resulting in a take-up rate of 49%.
For workers with access to retirement plans, 12% of private industry workers and 34% of state and local government workers had access to both defined benefit and defined contribution plans.
SEE ALSO:
• Nearly Half of Private Workers Participate in DC Plans: EBRI
• Roughly Half of Americans Lack Access to Workplace Retirement Plans
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
