Garbage in, garbage out. Any analysis is only worth the data on which it’s based, and with reports of plummeting retirement plan participation rates, it’s plain rotten.
Last week, Andrew Biggs with the uber-conservative American Enterprise Institute took Teresa Ghilarducci and The New School to task for claims the latter made about trends in retirement plan coverage.
“American workers’ access to retirement savings coverage is getting worse,” Ghilarducci and crew wrote. “New data show that employer-provided retirement coverage for all workers dropped 4 percentage points between 2014 and 2017 to 40 percent. Coverage for those nearing retirement—workers ages 55 to 64—fell 7 percentage points to 44 percent.”
From 2014 to 2017, no group of full-time workers supposedly saw a significant increase in coverage, they added.
It’s all bunk, Biggs argued in Forbes. And before claims of political bias arise, note that Biggs was principal deputy commissioner for policy at the Social Security Administration before his latest gig.
Pointing to the New School’s article titled “New Data Shows Drop in Retirement Coverage for All Income Levels,” he adds that “in reality, the article should have been titled ‘Bad Data Show Drop in Retirement Coverage for All Income Levels.’”
The New School research relied on the Current Population Survey, jointly conducted by the Bureau of Labor Statistics and the Census Bureau.
The CPS caused a bit of controversy recently, specifically with changes to how it measures certain markers of plan participation. It’s an issue the Employee Benefit Research Institute has been all over for some time.
“If nearly one-in-five employees lost their retirement plan coverage over the space of four years, that would make headlines,” Biggs writes. “We’d know of big, prominent companies that had discontinued their 401(k) or other retirement plan. Can you name one? Me, neither.”
Simply put, in 2014 the Current Population Survey redesigned how it asks households about both retirement plan coverage and the income they receive from those plans in retirement. While it’s not clearly understood why, Biggs concludes, “that redesign produced a dramatic reduction in the percentage of workers who say they’re offered a retirement plan at work.”