BOSTON — The percentage of workers eligible to participate in a 401(k) plan who actually do so rose to 79.1% at year-end 2004 from 74.4% in 2001, according to new analysis of data from the 2004 Survey of Consumer Finances, a triennial survey conducted by the Federal Reserve Board.
The analysis from the Center for Retirement Research at Boston College found that 401(k) plan participation rose in most age groups during the three-year period. The biggest increase — nearly 10 percentage points, to 83.3% — occurred among eligible workers between 50 and 59 years old.
For eligible workers 60 to 64, participation grew to 87.6% in 2004, from 80.2% in 2001; for workers 40 to 49, participation rose to 83.4% from 76.7%; and for those 30 to 40, 77.7% in 2004 vs. 75.6% in 2001. The only drop in eligible participation — to 62% from 66.7% — came for the youngest eligible workers, those 20 to 29.
Viewed more broadly, of all workers (eligible and ineligible) surveyed by the Fed, the percentage enrolled in a 401(k) plan was essentially flat during the three years, at 38.7% in 2004 and 38.5% in 2001.
The March 2006 CRR issue brief — "401(k) Plans are Still Coming Up Short" — was based on a detailed survey of household assets, liabilities and demographic information of representative U.S households, commissioned by the Federal Reserve.
The authors are Alicia H. Munnell, director of Boston-based CRR and the Peter F. Drucker Professor in Management Sciences at Boston College, and Annika Sunden, a CRR research associate and a senior economist with the Swedish National Social Insurance Board, Stockholm.