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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.
United States Department of Labor
