Report: Plan Coverage, Participation Dropping

October 22, 2003 ( - Fewer private sector Americans worked for a company sponsoring a retirement plan in 2002, while a likewise smaller number covered by a retirement program actually participated in it, a new study found.

The Congressional Research Service (CRS) of the Library of Congress, based on an analysis of US Census Bureau data, found that the number of full-time private-sector employees between 25 and 64 years old covered by a retirement plan dropped to 42.8 million in 2002 from 45.1 million the year before.

Of those, the number actually using the plans to save for retirement also declined to 37 million in 2002, down from 38.7 million in 2001. On a percentage basis, participation among 25 to 64-year-old private sector workers dipped to 53.5% in 2002.

In further studying the 25 to 64-year-old full-time private-sector worker segment, the CRS also found that:

  • The smaller the firm, the lower was the percentage of participants. Only 27.3% of workers at firms with fewer than 25 employers participated in an employer-sponsored retirement plan in 2002 (down from 29.1% in 2001), compared to 47.8% of workers at firms with 25 to 99 employees (down from 48.4% in 2001) and 66.6% of workers at firms with more than 100 employees (down from 68.6% in 2001).
  • In 2002, participation rates were lower among the younger set. Only 44.6% of private-sector 25 to 34 year olds were in their plan (down from 47.7% in 2001) versus 54.4% of workers 35 to 44 years old who participated (down from 57.4% in 2001).
  • In 2002, there was relatively little difference in participation among men and women – 53.9% of men (down from 56.5% in 2001) and 52.9% of women (down from 54.8% in 2001) participated in a company-sponsored retirement plan.
  • From a racial perspective, black, Hispanic, and other non-white workers were less likely to have worked for an employer sponsoring a plan. Some 59% of white workers in 2002 were included in a company-sponsored retirement plan, compared to 47.5% of black non-Hispanic workers, 31.1% of Hispanic workers, and 49.2% of other non-white workers.
  • Lower earners were less likely to be plan participants in 2002. Some 24% of workers who earned less than $20,000 were plan participants (down from 25.6% in 2001), while 48.7% of those earning $20,000 to $39,999 were in their plan (down from 51.6% in 2001). Workers pulling in $60,000 or more had a 71.1% participation rate, (down from 73.1% in 2001).
  • Part-year or part-time workers in the private sector were half as likely as workers employed year-round, full-time to have participated in an employer-sponsored retirement plan in 2002 (25.7% v. 53.5%).