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Employee benefits systems show a decline in pension plan participants according to the Employee Benefit Research Institute. Yet, there is improvement over the 1970s.
The following is based on analysis from the Employee Benefit Research Institute (EBRI) released in October 2010:
54.4% of full-time, full-year wage and salary workers participated in retirement employee benefits systems in 2009. In 1999, that figure was higher, closer to 60%.
The rate of employer sponsorship of plans also dropped during that same timeframe between 1999 and 2009 from 69.4% to 61.8%.
It seems that employee benefits systems continue to feel the pressure of the recent economic downturn--so much so that the number of American workers participating in a retirement plan continued to decrease in 2009, reaching its lowest level in a decade. The EBRI analysis shows that among all workers 39.6% participated in a retirement plan in 2009, about a percentage point less than 2008 and down almost 5 percentage points from the high of 44.4% registered in 2000.
As of February 2010, approximately 75 million American workers, one-half of the labor force, did not have the opportunity to participate in employer pension plans. These workers are concentrated in agricultural, construction, and retail industries, all of which sectors have many small businesses.
In fact, one-fourth of companies employing 100 or more workers were not offering employer pension plans in 2009 and likely aren't today.
Workers in small firms with fewer than 100 employees are much less likely than larger businesses to have a retirement plan available to them, according to a study released in 2010 by the Small Business Administration. The study used nationally representative employee benefits systems data from the Census Bureau's Survey of Income and Program Participation.
Nearly 72 percent of workers in small companies have no retirement plan available. One reason smaller firms may not offer employee benefits systems for retirement is the cost of setting up and running a retirement plan.
The U.S. Department of Labor and the American Institute of Certified Public Accountants have launched an interactive website to help small businesses select a retirement plan as part of employee benefits systems suitable for their employees.
The website, "Choosing A Retirement Solution for Your Small Business," is available at www.choosingaretirementsolution.org.
Small Business Retirement Plan Availability and Worker Participation, by Kathryn Kobe of Economic Consulting Services, finds that the number of companies offering a traditional defined benefits pension plan has been declining steadily, and almost half of all workers-about 58 million of them - don't have access to any type of retirement plan through their place of work. Moreover, another 20 million workers have employer plans available but have not enrolled in them.
Yet, thats an improvement over the 1970s.
The Investment Company Institute has found that across all income groups, retirement income from employee benefits systems is flowing better today than in the mid-1970s, when sweeping new ERISA retirement plan regulations were enacted. The study, A Look at Private-Sector Retirement Plan Income after ERISA, discovered that in 2009, 34% of retirees received income from private-sector retirement plans, compared with 21% in 1975. Relative to 2009 dollars, the median income received as private-sector pension income from employee benefits systems increased to $6,000 in 2009 from about $4,500 in 1975.
Topic: Employer Pension Plans