Only 42% of Private Sector Workers Have Pension Plans
Recent public policy discussions about pension plans have focused mostly on those held by public employees. But the pension plans of private sector workers are also an important consideration for policymakers, especially since the majority of these workers don’t have a retirement plan and rely solely on Social Security after they leave the workforce.
Only 42% of company employees age 25-64 participate in a pension plan in their current job, according to a study by the Center for Retirement Research at Boston College. This is a fall from 50% in 1979.
Furthermore, more than 30% of households wind up with no coverage at all during their careers, while others move in and out of coverage and end up with inadequate 401(k) balances, the center determined.
The implication that 58% of private sector workers don’t have pension plans is that this mass of people must rely entirely on Social Security once they retire. For low-wage earners retiring at 62, this can mean a significant income drop since Social Security replaces only 40% of their pre-retirement earnings.
To Learn More:
The Pension Coverage Problem in the Private Sector (by Alicia H. Munnell, Rebecca Cannon Fraenkel and Josh Hurwitz, Center for Retirement Research at Boston College) (pdf)
Why Do Taxpayers Pay $3.3 Billion a Year for Private Contractor Pension Funds? (by Noel Brinkerhoff, AllGov)
Thousands of Federal Retirees Receive $100,000 a Year Pensions…Including Newt Gingrich (by David Wallechinsky, AllGov)
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