Older Employees More Likely to Participate in Retirement Plans

January 30, 2008 (PLANSPONSOR.com) - The likelihood of being a retirement plan participant increases with age, according to the Employee Benefit Research Institute (EBRI).

Just over 60% of all full-time, full-year wage and salary workers ages 54 – 64 were participants in 2006, compared with just over 29% for those ages 21 – 24, EBRI said in a news release. Forty-five percent of all workers age 25 – 34 participated in a retirement plan in 2006, as did 54% of workers age 35 – 44, and just under 60% of workers age 45 – 54.

The same was true for workers in either the public or private sectors, though the fraction of public-sector workers participating in a retirement plan was significantly higher than that of private-sector workers in the same age group, according to the release. EBRI found just over 78% of public sector workers age 45 – 54 participated in a retirement plan in 2006, versus 48% of workers in the private sector of the same age.

As for all workers, the number of workers in each sector participating in a retirement plan decreased with age: 76% and 43%, respectively, for age 35 – 44; 67% and 35%, respectively, for age 25 – 34; and 41% and 18%, respectively, for age 21 – 24.

When looking at workers by age and earnings levels, younger workers are less likely to participate in a retirement plan than older workers with the same earnings. Even for the highest earners ($50,000 or more), EBRI found 49.7% of those ages 21-24 participated in a plan, compared with 71.3% of those ages 45-54.

The full Issue Brief is available online at www.ebri.org .