Participation Rates See Broad Increases

October 9, 2008 ( - Workplace retirement plans enjoyed an across-the-board participation hike in 2007 - the first such increase since 1998.

An Employee Benefit Research Institute (EBRI) news release said its study of participation trends found41.5% of employees took part in an employer-based retirement plan in 2007, up from 39.7% of employees the year before. The percentage of full-time, full-year wage and salary workers ages 21 to 64 increased from 52.7% in 2006 to 55.3% in 2007, according to the EBRI data.

The study notes that retirement plan participation trends shot up significantly in the late 1990s, and then dropped in 2001 and 2002.

In 2003 and 2004, the participation trend flattened out. The level of participation subsequently declined in 2005 and 2006 before increasing in 2007.

According to the news release, EBRI found:

  • Participation increases with age (63.9% for wage and salary workers ages 55 - 64, compared to 28% for those ages 21 - 24).
  • Among all workers, men had a higher participation level than women, but among full-time, full-year workers , women had a higher participation level than men (57% for women, compared with 54% for men). Female workers' lower probability of participation in the aggregate results from their overall lower earnings and lower rates of full-time work compared to males.
  • Hispanic wage and salary workers were significantly less likely than both white and black workers to participate in a retirement plan. The gap between the percentages of black and white plan participants narrows when compared across earnings levels.
  • ?Wage and salary workers in the South, West, and Southwest had the lowest participation levels in 2007 (Florida was the lowest at 42%) while the upper Midwest and Northeast had the highest levels (Wisconsin had the highest participation rate, at approximately 68%).
  • Higher-educated, higher-income, and married workers are more likely to participate in a plan than their counterparts.
  • The study also reported that in 2007 about 58% of all working-age (21 - 64) wage and salary employees worked for an employer or union that sponsored a retirement plan, up from about 56% in 2006.
  • Among full-time, full-year wage and salary workers ages 21 - 64, just over 63% worked for an employer or union that sponsored a plan in 2007, up from 60.5% in 2006.

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