On April 8, 2014, I testified before the Washington State Senate in Olympia and presented SCEPA's recently released study, "Are Washington Workers Ready for Retirement." This study finds that employer sponsorship of retirement plans in on the decline from 2000-2012. The availability of employer-sponsored retirement plans in Washington declined by two percentage points, from 62% to 60%. Four out of ten workers in the state do not have access to a retirement plan at work.
Washington State Retirement Data Graph
While this decline is smaller than in some other states, it follows a downward trend across the country. This trend means that, upon retirement, workers without access to a retirement plan during their working years will rely solely on Social Security and Medicare to survive. The support from these federal programs can be supplemented by personal savings, but, as we document below, workers without employer-sponsored retirement plans tend to be less financially secure overall and less able to save sufficiently (if at all) for retirement.

Most workers had less access to retirement plans in 2012 than they did in 2000, but the decline has not been equal across social and economic groups. Particularly stark is the drop in the sponsorship rate for female workers, whose access decreased from 65 percent to 60 percent. Female workers in Washington experienced a decline in sponsorship at more than double the rate of workers' overall sponsorship reduction.

Washington's self-employed experienced a one-third drop in retirement plan sponsorship – falling to 14 percent from 20 percent.

Washington workers covered by a union contract experienced an increase in retirement plan coverage. One quarter of Washington's prime age workers were covered by a union contract in 2012 – an increase from 20 percent in 2000.

Overall, participation in an employer-provided retirement plan is low – only 49 percent of Washington's workers were enrolled in a retirement plan at work in 2012. In addition, nearly half (48 percent) of near-retirement households (ages 55-64) have no retirement plan at all. This is particularly worrisome since households without a retirement plan tend to be ill-prepared for retirement. Even those with employer-sponsored retirement plans may not be able to reach a comfortable replacement rate.

All workers deserve a retirement plan. Workplace retirement plans are a fundamental means to ensure retirement income security and this paints a discouraging picture of retirement readiness for Washington workers. Will this downward trend in the sponsorship and quality of retirement plans continue? If so, what can be done about it?

The leadership in Washington state can lead the nation in the effort to protect seniors against downward mobility in retirement by implementing policies to expand safe and secure retirement plans through the workplace.