While coverage by some sort of retirement plan is holding fairly steady in recent years, defined benefit plans are increasingly falling by the wayside and giving way to defined contribution plans.
That's according to a Towers Watson report that analyzed statistics on both coverage by and contributions to retirement plans from 2001–2013.
While there's been a slight drop in overall retirement plan coverage from 70 percent in 2001 to 68 percent in 2013, the analysis says that particular difference is "more likely due to sampling errors than to a drop in participation."
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However, the decline in DB plans is all too real, falling from 16 percent of workers in 2001 to 9 percent in 2013. The percentage of workers covered by both DB and DC plans dropped from 13 percent to 11 percent, while the percentage of workers covered solely by DC plans rose from around 41 percent to 48 percent. The fact that DC plans have expanded, the study said, is the reason retirement plan coverage hasn't fallen along with DB plans.
Older workers saved more in 2013, with contributions growing among those in their 40s and 50s, according to data from the Survey of Consumer Finances.
Not only do more of them contribute (61.2 percent of those in their 40s; 63.7 percent of those in their 50s), but they also save more at those ages than earlier in their careers—both because they're likely earning more at that stage, and because they are feeling the pressure to put away enough money to retire.
Employer contributions, on the other hand, have fallen from 2001 to 2013, although employer match rates have stayed fairly constant. The analysis posits that many workers can't contribute enough to receive the full employer match, "[p]erhaps [due to] the financial squeeze following the 2008 crisis and stagnant wage growth [that] have left many workers with less discretionary income for saving."
The study concluded that there's more research to be done on the "more critical question" of "whether the shift away from DB plans and the expansion of DC plans will do a good job of securing retirement."
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