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