This is a repost from Forbes. 

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The American workforce is an aging one, filled with people concerned about retirement. Still, despite the aging population, $140 billion in annual tax breaks, and relatively light regulation of defined contribution plans, retirement plan coverage at work (including defined benefit and 401(k)-type coverage) has declined over the last two decades. Just 40 percent of workers were covered by any type of retirement plan through their workplace in 2017, 4 percentage points lower than in 2014. And retirement plan coverage has fallen in 14 out of 17 years since 2000.

The lack of retirement plan coverage hits some groups more than others.  And, though employer-provided retirement plan coverage declined for every demographic group, some groups lost more than others. The coverage rate for white (down 5 points to 43 percent), black (down 5 points to 38 percent) and Asian (down 4 points to 37 percent) workers all fell significantly.  Coverage for Hispanic workers (down 1 point to 29 percent) remains lower than for other workers.

A surprising and politically important fact is that workplace retirement plan coverage fell the most for high-income workers. Coverage of workers in the top 10 percent of the income distribution (those with incomes more than $115,000) fell to 50 percent in 2017, down 10 percentage points compared to 2014. Coverage of workers in the next 40 percent of earners (between $42,000 and $115,000) fell 7 percentage points to 50 percent. Finally, just 34 percent of workers in the bottom half of the income distribution were covered by a retirement plan at work, down 4 percentage points from 2014.

Union workers’ retirement plan coverage is twice that of nonunion workers, but their 67 percent coverage rate is down 3 points and that of non-union workers is 36 percent, down 5 points. Coverage of private sector employees declined by 4 percentage points, to a low of 38 percent. The coverage rate for public sector employees was 68 percent (down 4).

Workers in information and communications jobs (42 percent, down 10) experienced the greatest decline in coverage, followed by workers in finance, insurance & real estate jobs (42 percent, down 7).

In sum, just when the labor force necessitates more retirement coverage – workers are aging, they expect to live longer, and Social Security benefits are not likely to increase – coverage falls. The 401(k) was supposed to be so popular for people and firms. The government -- relative to DB plans -- lightly regulates 401(k)-type and IRA plans and 401(k) plans are cheaper than defined benefit plans for firms.  However, the voluntary system still fails to cover most workers; only 40 percent of workers are covered.

Michael Papadopolous provide research assistance for this report.

Workplace Retirement Plan Coverage of Full-Time Workers Ages 25-64

  2014 2017
Full-Time Workers Ages 25-64 103,903,578 109,373,216
Coverage Rate 44% 40%
By Gender    
    Male 43% 39%
    Female 47% 42%
By Race/Ethnicity    
    White non-Hispanic 48% 43%
    Black non-Hispanic 43% 38%
    Asian non-Hispanic 41% 37%
    Hispanic 30% 29%
   Other 43% 40%
Income Percentile    
    Bottom 50% (less than $40,000) 33% 29%
    Middle 40% ($40,000 to $115,000) 57% 50%
    Top 10% (greater than $115,000) 60% 50%
By Age Group    
    25-34 37% 34%
    35-54 45% 42%
    55-64 51% 44%
By Education    
  Less than High School 18% 14%
  High School 38% 30%
  Some College 44% 37%
  Bachelor’s Degree 52% 44%
  Graduate Degree 59% 52%
By Classification    
    Self-employed 14% 12%
    Private Sector 42% 38%
    Public Sector 72% 68%
By Firm Size    
    1-99 Employees 24% 21%
    100-499 Employees 48% 42%
    500-999 Employees 55% 48%
    1000+ Employees 61% 55%
By Union Contract Coverage    
    Not Covered 41% 36%
    Covered 70% 67%
By Industry    
    Construction 29% 25%
    Manufacturing 49% 44%
    Wholesale and Retail Trade 37% 34%
    Transportation and Warehousing 43% 38%
    Utilities 68% 63%
    Information and Communications 52% 42%
    Finance, Insurance and Real Estate 49% 42%
    Professional, Scientific, Management & Administrative Services 38% 34%
    Educational, Healthcare, Social & Other Services 50% 45%
    Arts, Entertainment, Recreation, Accommodation & Food Services 23% 23%
    Public Administration 72% 70%
By Citizenship Status    
    Non-Citizens 32% 30%
    Citizens 47% 43%


Source and notes: Author’s calculation using the March supplement of the Current Population Survey, 2015 and 2018 and the March supplement of the Current Population Survey, 1999-2018 (survey asks about coverage in previous calendar year). Sample includes workers ages 25-64 who report having worked at least 35 hours per week. Starting in 2013, the Census Bureau changed questions related to retirement income, but not questions related to workplace retirement plan coverage. In 2013, it fielded the old questions to 5/8 of the sample and the new questions to 3/8 of the sample. We present data for retirement plan coverage in 2012 for these two samples separately. Another source found that a change in the CPS questionnaire in 2014 accounts for part the decrease seen in subsequent years (EBRI report). The direct question regarding workplace retirement plan coverage was unchanged, but other questions related to retirement income were changed. However, the trend of decreasing coverage predates the questionnaire change and alternative surveys of retirement plan coverage coverage such as the Survey of Income and Program Participation and the Survey of Consumer Finances show decreasing coverage over similar time periods. Recent data does not allow defined benefit and defined contribution plans to be analyzed separately.