CRR Brief Challenges Pension Participation Claim
A new brief by the Center for Retirement Research at Boston College questions a long-held claim that only half of the private sector worker population contributes to an employer-sponsored retirement plan.
The number, first derived from the federal government’s Current Population Survey, has been used by the CRR in the past to raise attention to U.S. participation rates. As the CPS no longer provides such information on retirement plans, readers have turned to using data available in the National Compensation Survey (NCS), despite this being provided by employers instead of workers themselves.
In the brief, the CRR aims to expose whether the private sector has improved its participation rates overtime by using data from the U.S. Bureau of Labor Statistics (BLS), the Survey of Income and Program Participation (SIPP), the Survey of Consumer Finances (SCF), and the Panel Study of Income Dynamics (PSID), along with the employer-based NCS and the household-based CPS.
According to the brief, the NCS reported that in 2024, 72% of full-time workers, including private sector and part-time employees, had access to an employer-sponsored plan. Of those 72%, nearly three-quarters of private sector workers choose to participate. This drops the percentage down to 53% of private sector workers (including both full-time and part-time) who participate in an employer plan.
The SCF saw a recent uptick in coverage and participation post-COVID, but otherwise participation in private sector retirement plans has only changed slightly over the decades, the CRR reports.
While the CRR concludes that 50% of workers today continue to participate in retirement plans, it also notes that studies can skew this finding to paint a brighter picture. This can be done by adding data that highlights plan coverage only or including government workers (who are enrolled into DB plans) into the mix.
Although it’s true that most workers will find retirement coverage during their careers, the CRR adds that workers who switch employers (and thus move in and out of participating and contributing to a retirement plan), could end up retiring without enough savings. It states that roughly one-third of households reach their 60s without a retirement plan to their name.
“So, yes, the lack of continuous participation in an employer-sponsored retirement plan remains a serious problem,” the CRR concluded.
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Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with nearly a decade of experience and a passion for telling stories and reporting news. She is originally from Queens, New York, but now resides in Denver, Colorado.
