Higher paid workers more likely to have access to retirement benefits than lower paid workers

June 23, 2017

Sixty-six percent of private industry workers had access to employer-provided retirement plans in March 2016. Having access means employers offered the benefit, regardless of whether employees chose to participate. Forty-nine percent of private industry workers participated in retirement plans in March 2016. That results in a take-up rate—the percentage of workers with access to a plan who participate in the plan—of 75 percent. Access, participation, and take-up rates were all higher for workers in higher wage groups than for workers in lower wage groups.

 

 

Percent of private industry workers with access to retirement benefits, by type of retirement plan and wage category, March 2016
Type of retirement plan and wage category Access Participation Take-up rate

All retirement benefits

     

All workers

66% 49% 75%

Lowest 10 percent

33 14 42

Lowest 25 percent

42 22 52

Second 25 percent

65 45 69

Third 25 percent

78 64 82

Highest 25 percent

87 76 88

Highest 10 percent

88 79 90

Defined benefit plans

     

All workers

18 15 83

Lowest 10 percent

4 2 52

Lowest 25 percent

6 4 63

Second 25 percent

13 10 80

Third 25 percent

23 20 86

Highest 25 percent

34 29 86

Highest 10 percent

35 29 84

Defined contribution plans

     

All workers

62 44 72

Lowest 10 percent

30 12 40

Lowest 25 percent

39 19 49

Second 25 percent

61 40 66

Third 25 percent

72 56 78

Highest 25 percent

82 69 84

Highest 10 percent

84 73 87

Among workers with an average wage in the highest 10 percent, 88 percent had access to employer-provided retirement plans in March 2016. That compares with 33 percent of workers who had access to retirement plans if their average wage was in the lowest 10 percent. Participation followed a similar pattern, with 79 percent of workers in the highest wage group and 14 percent of workers in the lowest wage group participating in retirement plans.

There were also large differences in take-up rates between the highest and lowest wage groups. Even when workers have access to retirement benefits, they may choose not to participate if they have to contribute part of their pay to participate.

Some defined benefit retirement plans require employees to contribute part of their pay to participate. Among employees with access to these types of plans, the take-up rate for workers in the highest wage group was 84 percent, compared with 52 percent for workers in the lowest wage group.

Required contributions are common with defined contribution retirement plans. Among employees with access to these types of plans, the take-up rate for workers in the highest wage group was 87 percent, compared with 40 percent for workers in the lowest wage group.

These data are from the National Compensation Survey — Benefits program. For more information, see National Compensation Survey: Employee Benefits in the United States, March 2016. For more information about terms related to employee benefits, see our glossary.

SUGGESTED CITATION

Bureau of Labor Statistics, U.S. Department of Labor, The Economics Daily, Higher paid workers more likely to have access to retirement benefits than lower paid workers on the Internet at https://www.bls.gov/opub/ted/2017/higher-paid-workers-more-likely-to-have-access-to-retirement-benefits-than-lower-paid-workers.htm (visited July 20, 2017).

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