Benefits June 22, 2006

Just Over Half of 30-Somethings Participate in Co. Retirement Plans

June 22, 2006 (PLANSPONSOR.com) - In its second report in a series that tracks retirement savings practices for workers age 21 - 65, the Employee Benefit Research Institute (EBRI) reports that employer-sponsored retirement plan participation rates are not impressive for those in the first half of their career.
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Using 2003 survey respondent data, the EBRI study found that 70% of workers age 31 -40 were employed at a firm sponsoring some type of retirement plan, according to an EBRI Issue Brief. Of those offered a plan by their employer, 56% said they participate, compared to 53% in 1998.

Almost 26% of 30-something participants were in a defined benefit plan only, while 56% reported being in a defined contribution plan only, the brief says. Sixteen percent of participants were in both kinds of plans.

Additionally, 59% of respondents said they have an account in a retirement plan from either a current or former job, compared to 55% who said so in 1998.

For DC plans specifically, 53% of 30-somethings said their firm sponsors a 401(k) or other DC plan. Of those, 38% said they were participating in their employer’s plan. For those who were not participating, 43% said they were ineligible and almost 22% said they could not afford to contribute to the plan.

EBRI Issue Briefs can be viewed at www.ebri.org .

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