Analysis Shows Plan Availability, Participation Dipping in 2005

August 31, 2006 (PLANSPONSOR.com) - Both the number of private-sector employers offering a plan and the roster of workers participating edged downward between 2004 and 2005, according to Census Bureau data.

An analysis of the Census Bureau’s Current Population Survey (CPS) showed that there were 52.5 million private-sector workers age 25 to 64 at companies featuring a retirement plan in 2005 – down from 53.1 million the year before. Meanwhile, the number of plan participants came in at 43.1 million in 2005 – down slightly from 2004.

According to a Congressional Research Service (CRS) analysis of the CPS focusing on private-sector workers age 25 to 64 who were employed year-round, full-time in 2005:

  • the percentage of workers whose employer sponsored a retirement plan fell from 61.8% in 2004 to 59.7% in 2005.
  • the percentage of workers who participated in an employer-sponsored retirement plan declined from 53.4% in 2004 to 51.6% in 2005.
  • only 25.3% of workers at firms with fewer than 25 employees participated in an employer-sponsored retirement plan in 2005, compared to 45.2% of workers at firms with 25 to 99 employees and 65.4% of workers at firms with 100 or more workers.

According to the CRS document, there was relatively little difference in plan participation among men and women who were employed full time: 51.4% of men and 52% of women participated in an employer-sponsored retirement plan in 2005.


Also, only 42% of private-sector workers age 25 to 34 who were employed year-round, full-time participated in an employer-sponsored retirement plan in 2005, versus 55.2% of workers over age 35.


By race, Black, Hispanic, and other non-white workers were less likely to have participated in an employer-sponsored plan. Fifty-seven percent of white workers were in a company-sponsored plan in 2005, compared to 46.5% of black non-Hispanic workers, 29% of Hispanic workers, and 48.8% of other non-white workers (mainly Asian-American and Native American workers).


Not surprisingly, participation rates among lower-paid workers were less than their higher-paid counterparts. Only 27.5% of workers whose earnings were in the lowest quartile in 2005 (those with earnings under $25,000) participated in a retirement plan at work, compared to 70.3% whose earnings were in the top quartile (those with earnings above $60,000).


The percentage of part-year or part-time workers in the private sector whose employer sponsored a retirement plan was 39.9% in 2005, down from 41.5% in 2004. The percentage of part-year or part-time workers in the private sector who participated in an employer sponsored retirement plan fell from 24.8% in 2004 to 24.4% in 2005.

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