Retirement plan participation drops |
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Thu, 08 Feb 2007 19:24
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NEW YORK (AFX) - Participation in employer-sponsored retirement plans dropped about 2 percentage points between 2001 and 2004, according to a study released Thursday by the Employee Benefit Research Institute.The nonprofit research group, based in Washington, D.C., said that 46.1 percent of working heads of families participated in an employment-based retirement plan in 2004, down from 48.7 percent in 2001.The study looked at participation in both traditional pensions and employer-sponsored defined contribution plans like 401(k) and 403(b) accounts.Analyst Craig Copeland, who prepared the study, said some of the decline could be the result of the shift from traditional pensions to defined contribution plans, which require workers to make periodic contributions.Employees may not be able to participate immediately in defined contribution plans because of waiting periods for eligibility, Copeland said. 'And even when they are offered, just 70 percent participate,' he added.The study, based on the Federal Reserve's Survey of Consumer Finances, looked at participation rates among working heads of families, which can include married spouses, single parents or individuals, he said.The shift to defined contribution plans could be seen in a comparison of plan offerings two decades apart.In 2004, some 56 percent of families who participated in an employment-based retirement plan had only a defined contribution plan, up from 41 percent in 1992, the study said.Meanwhile, 26 percent had only a traditional pension in 2004, down from 42 percent in 1992.Those with both plans represented 18 percent in 2004 and 17 percent in 1992.Copyright 2006 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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