Access to pension plans at work is an important factor in how workers value retirement savings, but workforce demographics are also key, according to an Investment Company Institute study.
“What it really depends on is the makeup of the workforce, in terms of age and income,” Mike McNamee, ICI spokesman, said in an interview. “As people grow older and their income rises, they are more likely to be in retirement savings plans.”
According to the study, “Who Gets Retirement Plans and Why, 2010,” older and higher-earning workers are more likely to save for retirement, to seek retirement benefits as part of their compensation, and to work for an employer that offers a retirement plan. In 2010, 74% of full-time workers ages 45 to 64 earning at least $25,000 a year had access to employer-sponsored retirement plans, and 93% of them participated.
While smaller firms are less likely than larger firms to sponsor retirement plans, the ICI found that small firms with older, higher-paid workers are just as likely to offer a retirement plan.
Differences in workforce composition “appear to be a major cause for the low rate at which small employers sponsor retirement plans,” according to the study.
Only 18% of workers at small firms (fewer than 10 employees) have an employer-sponsored plan, compared to 69% of workers at firms with 1,000 or more employees. Yet if a firm of any size does sponsor a plan, 80% of workers participate.
The updated study, first published in September 2008, uses 2010 data from the U.S. Census Bureau and the U.S. Bureau of Labor Statistics' March 2011 Current Population Survey. The study is available at ICI's website.
