Does This Job Come With a Retirement Plan?

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Written by Janelle Jones   
Thursday, 02 August 2012 12:30

My post yesterday showed trends over the last three decades in employer-provided health insurance coverage, based on analysis John Schmitt and I did for a recent CEPR report. We also examined trends over the same period for employer-sponsored retirement plans.

The graph below shows that share of workers with a retirement plan has zigzagged over the last 30 years, falling from 51.7 percent in 1979 to 45.5 percent in 1987 year, before rising to 50.8 percent in 2001, before falling again to 45.5 percent by 2010.

The pattern differed by gender. Since 1979, the share of men with a retirement plan has fallen about 10 percentage points, while the rate for women has remained essentially unchanged. Since the early 2000s, women have been more likely than men to have any type of retirement plan, a substantial reversal of the pattern in the 1980s and 1990s.

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The graph below from State of Working America tells part of the story. As the figure shows, the share of workers with traditional, defined-benefit, pension plans has declined almost continuously since the early 1980s. Meanwhile, the share of workers with what are typically less generous defined-contribution ("401(k)" style) plans increased sharply until the mid-1990s and has only increased slowly since. The net result, as our data show, was a decrease in employer-sponsored retirement plans.

SWA-Pension_Coverage

A retirement plan is just one component of a good job. In our report, we define a good job as one that: pays at least $37,000 per year, has employer-provided health insurance and has an employer-sponsored retirement plan. Even though the country is more than 60 percent richer today than 30 years ago, the share of good jobs, using these criteria, has declined. The fall-off in workers with retirement plans was an important contributing factor.