Most Have Retirement Program Coverage: Study

August 23, 2002 ( - Nearly two-thirds (64.3%) of American workers work for an employer or union that sponsors a retirement program, and nearly three out of four workers over age 50 have enjoyed that coverage, according to a new report.

The report from the Employee Benefit Research Institute also noted that 56% of all workers had participated in some type of retirement plan during their career (as of 1998).  At that same point nearly 47% of wage and salaried workers were actively participating in such a plan, with a similar 43.2% eligible to receive a benefit from that plan if employment terminated at that date. 

The most predominant reason given for not participating was an inability to afford it.

However, the eligible participation rate for salary reduction plans was 81.4%, according to EBRI, with a median account balance of $14,000 in 1998.  However, while EBRI noted that balances increased with age, tenure, and education, participant balances do not increase appreciably until annual earnings reach $30,000 – and then demonstrate a significant jump for those earning $50,000 a year or more.

In 1998, 38.7% of those taking a lump-sum distribution from their retirement fund used at least some portion for tax-qualified savings, which EBRI defined as another employment-based plan, individual retirement account, or annuity.  However, 26.6% spent at least some of it.