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A 2-year decline in the percentage of workers participating in an employment-based retirement plan ended in 2003, rising slightly, according to a new analysis from the Employee Benefit Research Institute, Washington.

However, the percentage of people working for an employer that sponsors some kind of retirement plan continued a recent decline.

EBRI blames a stagnant U.S. economy for the decline in retirement plan participation in 2001-2002.

EBRIs study of U.S. Census Bureau data also found that a gender gap in participation in employer-sponsored retirement plans has declined significantly over the past 16 years. (See chart.)

The portion of all workers in an employment-based retirement plan in 2003 rose to 42%, up slightly over the previous year but reversing a decline since 2000, when the ratio stood at 44%. For full-time, full-year workers ages 21 to 64, participation hit 57% percent, about the same as the 2002.

EBRI reports that 81% of U.S. workers work for an employer that sponsors a plan. But that proportion declined from almost 86% in 2000. Only about 64% of workers whose company had a plan actually took part in the plan in 2003, down from about 67% 3 years earlier.

Although female workers still participated in company plans at lower rates than men, this disparity has narrowed steadily, EBRI found.

In 2003, 50% of male wage and salary workers aged 20 to 64 participated in an employer retirement plan, compared to about 47% of women. In 1987, participation rates stood at 51% male and 41% female.

“It appears women have been getting higher paying jobs and males job prospects have been stagnating,” says Craig Copeland, an EBRI analyst who wrote the study. “More women are working full time, too [than in 1987], and participation rates tend to be a little higher for full-time, full-year workers.”

Workers with the largest firms showed the largest participation outside of the public sector.

Among companies with 1,000 or more employees, 60% participated, although this was down from 62% in 1987.

Participation levels for workers at small firms, while much lower, increased from 1987 to 2003. At companies with 25 to 99 employees, participation rose from 28% to 39%, while at firms with between 100 and 500 workers, the level rose from 42% to 49%.

The percentage of workers participating at firms with fewer than 10 employees was 17% in 2003, up from 12% in 1987.

EBRI also found plan participation among workers aged 21 to 64 was significantly lower among those with the least education and actually has been falling. Among workers without a high school diploma, the rate declined steadily from 32% in 1987 to 22% in 2003. For those who completed high school but had no college education, the figure fell slightly from 44% in 1987 to 43% in 2003.

In contrast, participation levels increased among those who attended college from 52% in 1987 to 59% in 2003, while workers with an additional degree rose in participation from 66% to 70%.

Among income groups, those who made more than $50,000 had the highest participation level, and even increased from around 73% in 2002 to 75% in 2003.


Reproduced from National Underwriter Edition, October 14, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.