Employer costs for defined benefit and defined contribution retirement plans
December 26, 2012
Private industry employers now spend more per employee hour worked for defined contribution retirement plans (retirement plans that specify the level of employer contributions and place those contributions into individual employee accounts) than for defined benefit retirement plans (plans that provide employees with guaranteed retirement benefits that are based on a benefit formula). March 2012 private industry employer costs for defined contribution plans were 60 cents per employee hour worker, compared to 43 cents for defined benefit plans.
|Characteristics||Employer costs per employee hour worked|
|Defined benefit||Defined contribution|
|$ 0.43||$ 0.60|
Management, professional, and related
Sales and office
Natural resources, construction, and maintenance
Production, transportation, and material moving
1 to 99 workers
100 to 499 workers
500 workers or more
Employer costs for defined benefit plans were higher for natural resource, construction, and maintenance employees ($1.10) than for workers in other major occupational categories.
Employer cost of defined benefit plans for union workers ($2.00) is approximately 7 times higher than the cost for nonunion workers (26 cents).
Employers with 500 or more workers have defined benefit costs (99 cents) that are approximately four times higher than the defined benefit cost for employers that have 1 to 99 employees (23 cents).
These data are from the National Compensation Survey - Benefits program. To learn more, see "Retirement costs for defined benefit plans higher than for defined contribution plans" (HTML) (PDF), Beyond the Numbers, December 2012.
Bureau of Labor Statistics, U.S. Department of Labor, The Economics Daily, Employer costs for defined benefit and defined contribution retirement plans on the Internet at https://www.bls.gov/opub/ted/2012/ted_20121226.htm (visited April 04, 2020).
Recent editions of Spotlight on Statistics
- Job Flexibilities and Work Schedules in 2017–18
Examines data on job flexibilities, such as working at home, flexible schedules, and shift work.
- Labor Market Activity of Blacks in the United States
Examines data on the labor market and related topics for the Black or African American population.
- Workers’ Access to and Use of Leave from Their Jobs in 2017–18
Examines the reasons for which workers can take leave, their use of leave, and the reasons they did not take available leave even when they needed to.
- A look at employment and wages in U.S. establishments with foreign ownership
Examines employment and wages in U.S. establishments that have at least one foreign owner with at least 10 percent ownership.