The percentage of workers with access to an employer-sponsored retirement plan — 53 percent — underestimates how many actually have such access at various points in their careers, a fact that should be considered as Congress considers retirement reforms, the Investment Company Institute said Thursday.
"It's well known that about half of America's workers are covered by an employer-sponsored retirement plan, but less is known about who is in that half, and why," said Peter Brady, ICI senior economist.
"Many more workers will have access to a plan at some point in their career than is indicated by taking a snapshot of coverage at any single point in time," he said.
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In an update to its 2013 study, titled, "Who Gets Retirement Plans and Why," the ICI on Thursday released new data further clarifying the link between the savings goals of employees and the likelihood that they work for an employer that sponsors a retirement plan.
Among workers 30 or older with at least moderate levels of income, 70 percent work for an employer that sponsors a plan, while 75 percent have access to a plan through a spouse's employer.
Also, 93 percent of that group participates in their employer's plan, indicating that access to a plan greatly increases the prioritization of retirement savings.
When accounting for workers of all age 21 and over, and all income levels, 53 percent have access to an employer-provided plan.
When narrowed to those aged 30 and above, 62 percent have access, ICI said.
The ICI study also sought to assess the savings priorities of different demographics of workers.
Workers who prioritize retirement savings are much more likely to work for an employer that sponsors a retirement plan, suggesting that workplace plans encourage the prioritization for retirement savings by creating awareness of the need to save.
Younger and lower income workers typically save for reasons other than retirement — education, housing, or for emergency cash funds.
By contrast, older and higher-earning workers are much more likely to prioritize retirement savings.
They are also more likely to work for an employer that sponsors a plan.
As part of the update to the 2013 study, the ICI released historical data on plan coverage from 1979 to 2013.
The portion of private sector workers with access to employer-sponsored plans was 50 percent in 2012. Since 1979, access has ranged from 50 to 60 percent, averaging 54 percent over the period.
Access dropped to 50 percent in wake of the financial crisis, where it stayed until 2012 before rising again.
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Nick Thornton
Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.
