Order Code RL30122
CRS Report for Congress
Received through the CRS Web
Pensions and Retirement Savings Plans:
Sponsorship and Participation
October 7, 2002
Patrick J. Purcell
Specialist in Social Legislation
Domestic Social Policy Division
Congressional Research Service ˜ The Library of Congress ˜ Washington DC, 20540

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Pensions and Retirement Savings Plans:
Sponsorship and Participation
Summary
According to the Bureau of Labor Statistics (BLS), 65% of employees in medium and
large private establishments participated in an employer-sponsored pension or retirement
savings plan in 2000. Access to retirement plans in small businesses was substantially
lower. In 2000, only 33% of employees in businesses with fewer than 100 employees
participated in an employer-sponsored pension or retirement savings plan. The BLS data
also indicate that, among firms of all sizes, 55% of full-time employees participated in an
employer-sponsored retirement plan in 2000, compared to just 18% of part-time workers.
The low rates of sponsorship and participation in retirement plans among small
businesses have prompted Congress to seek to reduce the number of obstacles that impede
retirement plan sponsorship in these firms. For example, Congress has authorized retirement
plans for small employers with fewer reporting requirements and less stringent contribution
rules than are imposed on larger employers. Evaluating the effect of these laws on retirement
plan participation is complicated by the many other variables that affect a firm’s decision to
sponsor a retirement plan and a worker’s decision to participate in the plan. Nevertheless,
data on retirement plan sponsorship and participation collected in recent national surveys of
employers and households can be used to establish a baseline against which future changes
can be measured. Data recently released by the Census Bureau reveal that, among workers
25 to 64 years old who were employed in the private sector and worked year-round, full-time:
! Retirement plan participation fell to 55.8% in 2001 from 57.7% in 2000.
! Only 29.1% of workers at firms with fewer than 25 employees participated in an
employer-sponsored retirement plan in 2001, compared to 48.4% of workers at firms
with 25 to 99 employees and 68.6% of workers at firms with more than 100
employees.
! In 2001, there was relatively little difference in retirement plan participation among
men and women in the private sector between the ages of 25 and 64 who worked year-
round, full-time; 56.5% of men and 54.8% of women were included in a company-
sponsored retirement plan.
! In 2001, only 48% of private-sector workers age 25 to 34 who were employed year-
round, full-time participated in an employer-sponsored retirement plan, versus 59%
of workers 35 or older.
! Black and other non-white workers are less likely to work for an employer that
sponsored a retirement plan, and therefore to be included in a plan. Fifty-seven
percent of white workers in the private sector who were employed year-round, full
time in 2001 were included in a company-sponsored retirement plan, compared to
50% of black and other non-white workers.
! Workers who earned less than $20,000 in 2001 were one-third as likely to have a
retirement plan at work than those who earned $60,000 or more
! Part-year or part-time workers in the private sector were half as likely as workers
employed year-round, full-time to be participants in an employer-sponsored pension
or retirement savings plan in 2001 (27.5% vs. 55.8%).

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Contents
Background: Demographic Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Congress and Retirement Income Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Two Kinds of Retirement Plans: Defined Benefit
and Defined Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Recent Trends in Retirement Plan Sponsorship and Participation . . . . . . . . . . 5
Surveys of Employer-provided Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Surveys of Households . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Retirement Plans and Employer Size . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Plan Participation Among Men and Women . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Plan Participation by Employee Age . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Plan Participation by Employee Race . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Plan Participation by Employee Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Plan Participation by Full-Time vs. Part-Time Employment . . . . . . . . . . . . . . 16
Appendix: Sources of Data on Retirement Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
The IRS Form 5500 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Surveys of Employers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Surveys of Households . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
List of Tables
Table 1. Labor Force Participation Rates in 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Table 2. Participation in Employer-sponsored Retirement Plans
by Employees in the Private Sector, 1999 and 2000 . . . . . . . . . . . . . . . . . . . . . 7
Table 3. Participation in Retirement Plans by Size of Firm . . . . . . . . . . . . . . . . . . . . . . . 9
Table 4. Employee Participation in Retirement Plans, by Sex . . . . . . . . . . . . . . . . . . . . 10
Table 5. Employee Participation in Retirement Plans, by Age . . . . . . . . . . . . . . . . . . . . 12
Table 6. Employee Participation in Retirement Plans, by Race . . . . . . . . . . . . . . . . . . . . 13
Table 7. Participation in Retirement Plans by Annual Earnings . . . . . . . . . . . . . . . . . . . 15
Table 8. Participation in Retirement Plans

by Full-Time vs. Part-Time Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

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Pensions and Retirement Savings Plans:
Sponsorship and Participation
Background: Demographic Trends
The aging of the American population has made retirement income an issue of
increasing concern to the Congress and the public. Although Americans are living longer
than ever before, most retire before age 65. Moreover, while the nation’s population
continues to grow, the decline in birth rates that followed the post-World War II “baby
boom” coupled with longer life spans will result in fewer workers relative to the number of
retirees. All of these trends will affect the economic well-being of future retirees. Pensions
and Social Security benefits will be paid over longer periods of time; savings will have to be
stretched over longer retirements; and Social Security payments benefits will have to be
financed by a working population that is shrinking relative to the number of retirees.
Americans are living longer then ever before. The average life expectancy of
Americans born in 1960 was 69.7 years. It has been estimated that those who were born in
2000 will live for an average of 76.4 years.1 A man who reached age 65 in 1960 could
expect to live another 13 years, while a woman who turned 65 had a remaining life
expectancy of 16 years. A man who reached age 65 in 2000 could expect to live another 15.6
years, while a woman who turned 65 in 2000 had a remaining life expectancy of 19.4 years.
As more people live into old age, the age-profile of the population will shift. In 1960, 16.7
million people in the United States — 9.2% of the population — were age 65 or older. In
2000, there were 35.0 million Americans age 65 or older, representing 12.4% of the
population. By 2025, according to projections made by the Bureau of the Census, there will
be 62 million people age 65 or older, comprising 18.5% of the U.S. population.
Families are smaller than they were in the 1950s and 1960s. The decline in
birth rates that followed the post-World War II “baby boom” may have an impact on the
income of retirees in the first decades of the 21st century.2 Birth rates fell sharply between
1960 and 1975 and have remained low since then. In 1960, there were 118 births per 1,000
women between the ages of 15 and 44. By 1975, the birth rate had fallen to 66 per 1,000
women of child-bearing age, and from that year through 1999 it never exceeded 70 births per
1,000 women.3 Social Security faces long-term financial difficulties in part because of the
declining ratio of workers to retirees. In 1960, there were 5.7 working-age people (20-64)
1U.S. National Center for Health Statistics, Vital Statistics of the United States.
2The Census Bureau defines the baby boom to include the years from 1946 to 1964.
3In 1999, there were 66 live births per 1,000 women 15 to 44 years old. U.S. National
Center for Health Statistics, Vital Statistics of the United States.

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CRS-2
for every person age 65 or older. By 1999, the ratio of working-age people to those age 65
or older had fallen to 4.6. According to the U.S. Bureau of the Census, by 2025 the ratio of
working-age people to people age 65 or older will have fallen to 3.0. As Social Security is
currently financed, fewer workers paying taxes will mean that tax rates must be increased or
benefits must be reduced.
Labor force participation begins to drop at age 55. The proportion of the
population that is either working or looking for work is called the “labor force participation
rate.” As indicated by the data in Table 1, the labor force participation rate starts to drop
significantly at about age 55. When income is no longer derived from earnings, individuals
depend more on pensions, interest and dividends, withdrawals from their savings, and –
when they become eligible through age or disability – Social Security.
Table 1. Labor Force Participation Rates in 2001
Total number of
Number in the
Labor force
Men
people (000s)
labor force (000s) participation rate
Age 25 to 54
58,728
53,613
91.3%
Age 45 to 54
18,718
16,574
88.5%
Age 55 to 64
11,544
7,866
68.1%
Age 65 and up
14,022
2,482
17.7%
Women
Age 25 to 54
61,059
46,678
76.4%
Age 45 to 54
19,624
14,990
76.4%
Age 55 to 64
12,660
6,713
53.0%
Age 65 and up
18,828
1,821
9.7%
Source: U.S . Dep artme nt of La bor , Bur eau o f Labo r Statistics, Employment and Earnings,
Janua ry 2002.)
Congress and Retirement Income Policies. The demographic trends described
above will place strains on the components of the traditional “three-legged stool” of
retirement income: Social Security, pensions, and personal saving. The Internal Revenue
Code was first amended to provide favorable tax treatment for qualifying pension and
retirement plans in the 1920s. These provisions have been expanded and modified many
times since then. Among the tax exemptions that apply to traditional “defined benefit”
pension plans are the deduction of pension contributions from employer income, exclusion
of employer contributions to pension plans from employee income, and tax exemption of the
earnings of pension trusts.4 In “defined contribution” plans such as those authorized under
4Defined benefit pensions are taxed when the employee receives benefits during retirement.

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CRS-3
section 401(k) of the tax code, income taxes are deferred until retirement on employer and
employee contributions to the plan and on the investment earnings of the plan.
By establishing the tax-favored status of pension programs and defining the terms under
which tax exemptions and deductions are granted, federal tax law has both encouraged the
growth of retirement plan coverage among workers and shaped the development of pension
and retirement savings plans. Congress also has sought to protect the pension benefits earned
by workers through direct regulation of pension plans, most notably through the Employee
Retirement Income Security Act of 1974 (P.L. 93-406). ERISA, too, may have influenced
the development of employer-sponsored retirement plans. Since its enactment, defined
contribution (DC) plans have proliferated while the number of defined benefit (DB) plans
has been falling.
Two Kinds of Retirement Plans: Defined Benefit and Defined Contribution.

Retirement programs are legally classified as either defined benefit plans or defined
contribution plans. In defined benefit or “DB” plans, the retirement benefit usually is based
on an employee’s salary and number of years of service. With each year of service, a worker
accrues a benefit equal to either a fixed dollar amount per month or year of service or a
percentage of his or her final pay or average pay.
A defined contribution or “DC” plan is much like a savings account maintained by the
employer on behalf of each participating employee. The employer contributes a specific
dollar amount or percentage of pay into the account, which is usually invested in stocks and
bonds. In some plans, the size of the employer’s contribution depends on the amount the
employee contributes to the plan. When the worker retires, the amount of retirement benefits
that he or she receives will depend on the balance in the account, which is the sum of all the
contributions that have been made plus interest, dividends, and capital gains (or losses). The
worker usually has the choice of receiving these funds in the form of a life-long annuity,5 as
a series of fixed payments over a period of years, or as a lump sum.
In recent years, many employers have converted their traditional pensions to hybrid
plans that have characteristics of both DB and DC plans. The most popular of these hybrids
has been the cash balance plan. A cash balance plan looks like a DC plan in that the accrued
benefit is defined in terms of an account balance. The employer makes contributions to the
plan and pays interest on the accumulated balance. However, in a cash balance plan, the
account balances are merely bookkeeping devices. They are not individual accounts that are
owned by the participants. Legally, therefore, a cash balance plan is a defined benefit plan.
The Locus of Risk in DB and DC Plans. In a defined benefit plan, it is the
employer who bears the financial risk of the plan, while in a defined contribution plan it is
the employee who bears the financial risk. In a defined benefit plan, the employer promises
to provide retirement benefits equal to a certain dollar amount or a specific percentage of the
employee’s pay. The employer contributes money to a pension trust that is invested in
5Retirees can also choose a joint and survivor annuity in which a surviving spouse continues
to receive an annuity after the retired worker’s death.

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CRS-4
stocks, bonds, real estate, or other assets. Retirement benefits are paid from this trust fund.
The employer is at risk for the amount of retirement benefits that have been promised to
employees and their survivors. If there are insufficient funds in the pension trust to pay the
accrued benefits, the firm that sponsors the pension plan is legally obligated to make up the
difference by paying more money into the pension fund.
In a defined contribution plan, the employer bears no risk beyond its obligation to make
contributions to each employee’s retirement account from the firm’s current revenue. In
these plans, it is the employee who bears the risk that his or her retirement account will
increase in value by an amount sufficient to provide adequate income during retirement. If
the contributions made to the account by the employer and the employee are insufficient, or
if the securities in which the account is invested lose value or increase in value too slowly,
the employee risks having an income in retirement that is not sufficient to maintain his or her
desired standard of living. If this situation occurs, the worker might choose to delay
retirement.
Many factors affect a firm’s decision to sponsor a retirement plan and a worker’s
decision to participate in the plan. In any given year, changes in the business climate —
inflation, interest rates, wage increases, the cost of other benefits (such as health insurance),
trends in business revenues and profits — could weigh more heavily in a firm’s decision to
sponsor an employee retirement plan than the potential tax advantages it could gain by
establishing a plan. Likewise, an employee’s decisions to participate or not to participate in
a retirement plan may be affected by such variables as the rate of growth of wages, the rising
cost of employee health insurance premiums, his or her confidence in the financial status of
Social Security, and whether another family member already participates in a retirement
plan.
In a recent survey, small employers most frequently cited uncertainty about future
revenues and the expense of employer contributions as the reasons that they did not offer
either a traditional pension or other employer-sponsored retirement plan. Small employers
also cited a preference among employees for higher wages and large numbers of part-time
or temporary workers as reasons that they chose not to sponsor a retirement plan.6 In the
2001 Small Employer Retirement Survey, jointly sponsored by the Employee Benefit
Research Institute and the American Savings Education Council, 48% of small employers
that did not offer a pension plan said that uncertainty of revenue was a major reason, and
46% cited the cost of employer contributions. Forty-three percent of small employers cited
their employees’ preference for higher wages or other benefits, while 32% said that high
employee turnover was a major reason for having no retirement plan. In contrast, 34% cited
the administrative burden of providing a pension as a major reason for not offering a
retirement plan, and only 22% said that government regulations were a significant reason that
they did not offer a retirement plan.
6 Dallas Salisbury, Teresa Turyn, and Ruth Helman, EBRI 2001 Retirement Surveys,
Employee Benefit Research Institute Issue Brief 234, Washington, DC, June 2001.

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CRS-5
Sponsorship of retirement plans by small firms is an important issue to the Congress in
part because of the large number of people employed by small businesses. In 2000, for
example, more than 31 million people worked for firms with fewer than 25 employees.7 The
relatively low rates of employer sponsorship and employee participation in retirement plans
at small businesses have prompted Congress to look for ways to make it easier for small
employers to establish and maintain retirement plans for their employees. Because small
employers may be reluctant to take on the financial risk and administrative burden of
establishing a defined-benefit pension plan, Congress has sought to encourage greater
retirement plan sponsorship among small businesses mainly by easing the financial and
reporting requirements associated with certain types of defined contribution pension plans.
The Revenue Act of 1978 (P.L. 95-600) authorized a defined contribution plan called the
Simplified Employee Pension (SEP).8 More recently, the Small Business Job Protection Act
of 1996 (P.L. 104-188) authorized another type of defined contribution plan called the
Savings Incentive Match Plan for Employees (SIMPLE).9
Recent Trends in Retirement Plan Sponsorship and Participation
The number of defined benefit plans is declining. According to the Pension
and Welfare Benefits Administration (PWBA) of the U.S. Department of Labor, the number
of defined benefit plans declined from 175,000 to 56,400 between 1983 and 1998.10 The
decline in the number of DB plans resulted mainly from the termination of a large number
of small plans. Between 1983 and 1998, the number of defined benefit pension plans with
fewer than 100 participants fell from 149,164 to 41,264, a decline of 72.3%. The number
of large DB plans fell, too, declining form 25,979 in 1983 to 15,141, or 41.7%. However,
while the decline in the number of plans was larger among small plans, the decline in the
number of participants was greater among large plans. The number of active participants in
small DB plans fell from 1,861,000 in 1983 to 648,000 in 1998.11 At the same time, the
number of active participants in large DB plans fell from 28,104,000 to 22,345,000.
7 Full-time and part-time wage and salary workers. (Source: Current Population Survey.)
8P.L. 95-600 authorized tax exemption only for employer contributions to a SEP. The Tax
Reform Act of 1986 (P.L. 99-514) allowed workers in firms with fewer than 25 employees
to contribute to a SEP on a tax-deferred basis through salary reduction (SARSEP). P.L. 104-
188 authorized SIMPLE plans to replace SARSEPs. Firms may continue to establish SEPs
funded exclusively by employer contributions, but new SARSEPs were prohibited after
December 31, 1996. Previously existing SARSEPs may continue as before.
9For more information about SEP and SIMPLE, see CRS Report 96-243, Simplified
Employee Pensions: A Fact Sheet and CRS Report 96-758, Pension Reform: SIMPLE Plans
for Small Employers, both by James R. Storey.
10Private Pension Plan Bulletin, U.S. Department of Labor, Pension and Welfare Benefits
Administration, (Number 11, Winter 2001-2002).
11BLS, Private Pension Plan Bulletin, (Number 11, Winter 2001-2002). The number of
active participants is the total number of participants minus those who have retired or who
have separated from the employer with a vested benefit but are not retired.

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CRS-6
Retirement Plan Financial Trends. Financial information reported by employers
to the U.S. Department of Labor also shows the extent to which sponsorship of retirement
plans has shifted from DB plans to DC plans. In 1975, pension plans held total assets of
$260 billion, of which 72% ($186 billion) was held by defined benefit plans. By 1998,
pension plans held total assets of $4.0 trillion, but the share held by DB plans had fallen to
48% ($1.9 trillion). Contributions to pension plans shifted even more dramatically during
this period. In 1975, employer and employee contributions to pension plans totaled $37
billion. Of this amount, 65% ($24 billion) was contributed to DB plans. In 1998, employers
and employees contributed $202 billion to pension plans, but 83% of the total ($167 billion)
was contributed to defined contribution plans. Benefit payments, too, reflected the impact
of the increasing prevalence of DC plans. In 1975, 68% of all benefits paid by private-sector
pension plans ($13 billion out of $19 billion) were paid by defined benefit pensions. In
1998, 59% of the $273 billion in benefit payments were disbursed from DC plans. In that
year, DC plans paid $162 billion in benefits, while DB plans paid out $111 billion in
benefits.
Surveys of Employer-provided Benefits. The Bureau of Labor Statistics collects
data from employers about paid leave, health insurance, retirement plan participation,
flexible spending accounts, and other employee benefits as part of the National
Compensation Survey. The National Compensation Survey is conducted among a nationally
representative sample of business establishments. The term establishment usually refers to
a single place of business at a particular location or all branches of a business in a particular
metropolitan area or county. An establishment might be a branch or small operating unit of
a larger firm. In contrast, a firm comprises all of the establishments that together form a
corporation, partnership, or other business entity.12
According to the data collected from employers through the National Compensation
Survey, 65% of employees in medium and large private establishments participated in an
employer-sponsored pension or retirement savings plan in 2000. (See Table 2). Access to
a company-sponsored retirement plan was substantially lower in small businesses. In 2000,
only 33% of employees in businesses with fewer than 100 employees participated in an
employer-sponsored pension or retirement savings plan. The data from the NCS also
indicate that, among firms of all sizes, 55% of full-time employees participated in an
employer-sponsored retirement plan in 2000, compared to just 18% of part-time workers.
12 In the Current Population Survey, employer characteristics are reported at the level of
the firm, which may include more than one establishment.

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CRS-7
Table 2. Participation in Employer-sponsored Retirement Plans by
Employees in the Private Sector, 1999 and 2000
Type of retirement plan
All types
Defined benefit Defined contribution
Establishment Size
1-99 workers
1999
34%
8%
27%
2000
33%
8%
27%
100 or more workers
1999
64%
37%
46%
2000
65%
33%
46%
Full-time workers
1999
56%
25%
42%
2000
55%
22%
42%
Part-time workers
1999
21%
9%
14%
2000
18%
6%
12%
All workers
1999
48%
21%
36%
2000
48%
19%
36%
Note: Data represent 107 million workers employed in the private sector.
Source: National Compensation Survey, U.S. Department of Labor.
Surveys of Households. The Current Population Survey (CPS) is conducted each
month by the Bureau of the Census among a nationally representative sample of 60,000 to
100,000 households, primarily for the purpose of estimating the rates of employment and
unemployment. Each March, supplemental questions are asked about employment, income,
health insurance, retirement plan participation, and receipt of government benefits during the
previous calendar year. The data from the CPS show that retirement plan participation in
small firms rose steadily throughout the 1990s. The CPS data also indicate that access to a
company-sponsored retirement plan remains lower in small firms than in firms with 100 or
more employees.
Retirement Plans and Employer Size. The data displayed in Table 3 show that
from 1992 to 2001, the number of workers between the ages of 25 and 64 who were
employed in the private sector and worked year-round, full-time increased from 54 million

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CRS-8
to 69 million. At the same time, the number of such workers whose employer offered a
pension or retirement savings plan increased from 34.2 million to 45.1 million. Thus, the
proportion of year-round, full-time workers in this age group who were employed at a firm
offering a retirement plan rose from 63.6% to 65.1% between 1992 and 2001. Most of the
increase in pension sponsorship during this period occurred among firms with fewer than 100
employees. In 2001, 33.9% of full-time workers in businesses with fewer than 25 employees
were employed at firms with pensions or retirement savings plans, compared to 26.6% in
1992. Among workers in firms with 25 to 99 employees, 58.2% were employed at firms that
sponsored retirement plans in 2001, compared to 49.3% in 1992. Nevertheless, in 2001
workers in small businesses still were much less likely than employees of large firms to work
for an employer that sponsored a pension or retirement savings plan. Among employees at
businesses with 100 or more workers, 79.6% worked for a firm that sponsored a pension or
retirement savings plan in 2001. This was a slight decline from 1992, when 80.5% of
workers in firms with 100 or more employees worked at firms that sponsored a retirement
plan.
Table 3 also shows the percentage of year-round, full-time employees in the private
sector who participated in an employer-sponsored retirement plan.13 This statistic takes into
account the impact of employers that do not sponsor a plan on overall retirement plan
participation rates. Among firms of all sizes, the proportion of year-round, full-time
employees between the ages of 25 and 64 who participated in a pension or retirement savings
plan fell from 57.7% in 2000 to 55.8% in 2001. This was almost the same as the
participation rate of 55.2% in 1992. In firms with fewer than 25 employees, participation in
pensions and retirement savings plans changed little from 2000 to 2001, but the 2001
participation rate of 29.1% was substantially higher than the participation rate of 22.6% in
1992. In firms with 25 to 99 employees, retirement plan participation fell from 49.7% in
2000 to 48.4% in 2001, but this was significantly higher than the 1992 participation rate of
42.3%. Participation in retirement plans among workers in firms with 100 or more
employees also fell between 2000 and 2001, dropping from 70.4% to 68.6%. This was
slightly lower than the participation rate of 70.1% in 1992.
13 Not all employees whose employer sponsors a retirement plan are eligible to participate.
For example, workers who have been employed for less than one year can be excluded.

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CRS-9
Table 3. Participation in Retirement Plans by Size of Firm
(Private-sector non-agricultural workers, ages 25 to 64, employed year-round, full-time)
Size of firm
Workers
Employer sponsors plan
Employees participating
(Employees)
(thousands)
Workers
Percent
Participants
Percent
All firms
1992
53,768
34,209
63.6%
29,676
55.2%
1993
54,954
34,092
62.0%
29,636
53.9%
1994
57,156
37,080
64.9%
32,043
56.1%
1995
60,687
38,348
63.2%
33,298
54.9%
1996
63,145
41,149
65.2%
35,535
56.3%
1997
64,001
41,855
65.4%
36,184
56.5%
1998
65,931
44,095
66.9%
38,092
57.8%
1999
67,065
44,794
66.8%
38,901
58.0%
2000
68,910
45,813
66.5%
39,728
57.7%
2001
69,265
45,097
65.1%
38,678
55.8%
Under 25
1992
11,942
3,181
26.6%
2,696
22.6%
1993
12,555
3,134
25.0%
2,688
21.4%
1994
13,120
3,479
26.5%
2,996
22.8%
1995
14,627
3,715
25.4%
3,109
21.3%
1996
15,343
4,365
28.5%
3,713
24.2%
1997
14,732
4,356
29.6%
3,722
25.3%
1998
15,101
4,789
31.7%
4,072
27.0%
1999
15,582
5,259
33.4%
4,522
29.0%
2000
16,213
5,575
34.4%
4,776
29.5%
2001
17,061
5,788
33.9%
4,965
29.1%
25 to 99
1992
8,416
4,146
49.3%
3,556
42.3%
1993
8,217
3,967
48.3%
3,374
41.1%
1994
8,476
4,526
53.4%
3,805
44.9%
1995
9,108
4,923
54.1%
4,188
46.0%
1996
9,421
5,378
57.1%
4,531
48.1%
1997
9,691
5,416
55.9%
4,602
47.5%
1998
9,940
5,794
58.3%
4,838
48.7%
1999
9,974
5,881
59.0%
4,933
49.5%
2000
10,289
6,053
58.8%
5,113
49.7%
2001
10,466
6,086
58.2%
5,067
48.4%
100 or more
1992
33,411
26,882
80.5%
23,424
70.1%
1993
34,182
26,990
79.0%
23,574
69.0%
1994
35,560
29,075
81.8%
25,242
71.0%
1995
36,951
29,706
80.4%
26,000
70.4%
1996
38,381
31,407
81.8%
27,291
71.1%
1997
39,578
32,083
81.1%
27,860
70.4%
1998
40,890
33,513
82.0%
29,182
71.4%
1999
41,509
33,654
81.1%
29,447
70.9%
2000
42,409
34,185
80.6%
29,839
70.4%
2002
41,739
33,223
79.6%
28,645
68.6%
Source: CRS analysis of the Current Population Survey, various years.

---

CRS-10
Plan Participation Among Men and Women. Table 4 shows the rates of
participation in pension and retirement savings plans by men and women ages 25 to 64 who
were employed in the private sector and worked year-round, full-time. Between 1992 and
1999, the proportion of men whose employer sponsored a pension or retirement savings plan
rose from 64.2% to 66.9%. Since then, it has dropped to 64.8%. The proportion of women
who worked at firms that sponsored a pension or retirement savings plan increased from
62.8% in 1992 to a high of 67.2% in 1998, and then fell to 65.6% in 2001. Thus in 2001,
men and women who were employed year-round, full-time were equally likely to work for
an employer that sponsored a retirement plan of some kind. Women, however, were less
slightly likely than men to participate in these plans. In 2001, 56.5% of men who were
employed year-round, full-time participated in a company-sponsored retirement plan,
compared to 54.8% of women who worked year-round, full-time.
Table 4. Employee Participation in Retirement Plans, by Sex
(Private-sector non-agricultural workers, ages 25 to 64, employed year-round, full-time)
Workers
Employer sponsors plan
Employees participating
(thousands)
Workers
Percent
Participants
Percent
Men
1992
32,001
20,535
64.2%
18,152
56.7%
1993
32,867
20,360
62.0%
18,055
54.9%
1994
34,329
22,265
64.9%
19,617
57.1%
1995
36,504
23,008
63.0%
20,359
55.8%
1996
37,912
24,541
64.7%
21,577
56.9%
1997
38,207
24,796
64.9%
21,887
57.3%
1998
39,399
26,270
66.7%
23,160
58.8%
1999
39,757
26,596
66.9%
23,553
59.2%
2000
40,704
27,048
66.5%
23,880
58.7%
2001
40,976
26,539
64.8%
23,164
56.5%
Women
1992
21,767
13,675
62.8%
11,524
52.9%
1993
22,087
13,732
62.2%
11,581
52.4%
1994
22,827
14,815
64.9%
12,426
54.4%
1995
24,182
15,336
63.4%
12,939
53.5%
1996
25,232
16,609
65.8%
13,958
55.3%
1997
25,795
17,060
66.1%
14,297
55.4%
1998
26,532
17,825
67.2%
14,932
56.3%
1999
27,308
18,198
66.6%
15,349
56.2%
2000
28,207
18,765
66.5%
15,847
56.2%
2001
28,290
18,558
65.6%
15,513
54.8%
Source: CRS analysis of the Current Population Survey, various years.

---

CRS-11
Plan Participation by Employee Age. Table 5 displays rates of participation in
pension and retirement savings plans among workers who were employed in the private
sector and worked year-round, full-time workers, according to age. Young workers — ages
25 to 34 — are less likely than middle-aged and older workers to be employed at a firm that
sponsors a pension or retirement savings plan. They are also less likely to participate in
retirement plans than are older workers. In 2001, 60.9% of workers 25 to 34 years old
worked for an employer that sponsored a retirement plan, and 47.7% participated in a
company-sponsored plan. Thus, 78% of those who worked for a firm that sponsored a plan
participated in the plan (.477/.609 = .78). In contrast, among workers 35 to 64 years old,
66.7% worked at firms that sponsored a retirement plan, and 59.0% participated in a
company-sponsored plan. Thus, of those who worked for an employer that sponsored a
retirement plan, 88.5% participated in the plan (.590/.667 = .885)14
14 Some of the difference in participation rates is because workers under 35 are somewhat
more likely to be in their first year with an employer and can be excluded from participating
in the plan. Part-time or part year workers and those under 21 also can be excluded, but non
of these groups are represented in Table 6.

---

CRS-12
Table 5. Employee Participation in Retirement Plans, by Age
(Private-sector non-agricultural workers, ages 25 to 64, employed year-round, full-time)
Employee
Workers
Employer sponsors plan
Employees participating
age
(thousands)
Workers
Percent
Participants
Percent
25 to 34
1992
18,559
11,127
60.0%
8,848
47.7%
1993
18,748
10,862
57.9%
8,746
46.7%
1994
19,488
12,038
61.8%
9,460
48.5%
1995
19,759
11,673
59.1%
9,337
47.3%
1996
19,744
12,389
62.8%
9,865
50.0%
1997
19,829
12,508
63.1%
9,832
49.6%
1998
19,737
12,455
63.1%
9,896
50.1%
1999
19,535
12,513
64.1%
9,903
50.7%
2000
19,665
12,457
63.4%
9,906
50.4%
2001
19,542
11,908
60.9%
9,330
47.7%
35 to 44
1992
17,565
11,584
66.0%
10,234
58.3%
1993
18,203
11,614
63.8%
10,265
56.4%
1994
18,924
12,492
66.0%
11,082
58.6%
1995
20,439
13,235
64.8%
11,742
57.5%
1996
21,360
14,161
66.3%
12,337
57.8%
1997
21,528
14,120
65.6%
12,377
57.5%
1998
22,287
15,125
67.9%
13,211
59.3%
1999
22,812
15,387
67.5%
13,440
58.9%
2000
23,371
15,499
66.3%
13,575
58.1%
2001
22,445
14,841
66.1%
12,882
57.4%
45 to 54
1992
11,765
7,782
66.2%
7,175
61.0%
1993
12,497
8,146
65.2%
7,441
59.6%
1994
12,973
8,839
68.1%
8,117
62.6%
1995
14,042
9,240
65.8%
8,381
59.7%
1996
15,278
10,259
67.2%
9,290
60.8%
1997
15,576
10,638
68.3%
9,760
62.7%
1998
16,547
11,615
70.2%
10,519
63.6%
1999
17,238
12,053
69.9%
11,089
64.3%
2000
18,162
12,746
70.2%
11,606
63.9%
2001
18,625
12,650
67.9%
11,324
60.8%
55 to 64
1992
5,879
3,717
63.2%
3,419
58.2%
1993
5,506
3,470
63.0%
3,183
57.8%
1994
5,771
3,711
64.3%
3,384
58.7%
1995
6,446
4,196
65.1%
3,838
59.5%
1996
6,763
4,340
64.2%
4,043
59.8%
1997
7,069
4,588
64.9%
4,215
59.6%
1998
7,359
4,900
66.6%
4,466
60.7%
1999
7,479
4,841
64.7%
4,470
59.8%
2000
7,713
5,111
66.3%
4,640
60.2%
2001
8,653
5,698
65.9%
5,141
59.4%
Source: CRS analysis of the Current Population Survey, various years.

---

CRS-13
Plan Participation by Employee Race. Race is classified on the CPS as white,
black, American Indian/Eskimo, or Asia/Pacific Islander. Ethnic origin (Hispanic, for
example), is identified separately from race. Between 2000 and 2001, the likelihood of being
employed at a firm that sponsored a retirement plan increased for black workers, while
falling for white workers and those of other races. (See Table 6). The proportion of black
workers who participated in a retirement plan remained largely unchanged. Among white
workers, the proportion who participated in a retirement plan fell from 59.2% in 2000 to
57.0% in 2001, while among workers whose race was classified as “other,” mainly (Native
American or Asian), participation fell from 50.8% in 2000 to 49.4% in 2001.
Table 6. Employee Participation in Retirement Plans, by Race
(Private sector non-agricultural workers, ages 25 to 64, employed year-round, full-time)
Employee
Workers
Employer sponsors plan
Employees participating
Race
(thousands)
Workers
Percent
Participants
Percent
White
1992
46,582
29,815
64.0%
26,111
56.1%
1993
47,125
29,805
63.3%
26,073
55.3%
1994
48,748
31,976
65.6%
27,864
57.2%
1995
51,745
32,953
63.7%
28,778
55.6%
1996
53,619
35,340
65.9%
30,738
57.3%
1997
53,941
35,714
66.2%
31,085
57.6%
1998
55,495
37,565
67.7%
32,720
59.0%
1999
56,082
37,954
67.7%
33,246
59.3%
2000
57,117
38,655
67.7%
33,828
59.2%
2001
57,811
38,060
65.8%
32,976
57.0%
Black
1992
5,146
3,210
62.4%
2,566
49.9%
1993
5,435
3,045
56.0%
2,478
45.6%
1994
5,890
3,699
62.8%
3,003
51.0%
1995
6,305
3,950
62.7%
3,314
52.6%
1996
6,602
4,105
62.2%
3,324
50.4%
1997
6,954
4,315
62.1%
3,535
50.8%
1998
7,258
4,565
62.9%
3,689
50.8%
1999
7,613
4,820
63.3%
3,928
51.6%
2000
8,165
4,988
61.1%
4,058
49.7%
2001
7,402
4,645
62.8%
4,000
50.0%
Other
1992
2,041
1,184
58.0%
1,000
49.0%
1993
2,394
1,242
51.9%
1,084
45.3%
1994
2,518
1,405
55.8%
1,176
46.7%
1995
2,637
1,441
54.6%
1,205
45.7%
1996
2,923
1,704
58.3%
1,473
50.4%
1997
3,107
1,827
58.8%
1,564
50.3%
1998
3,177
1,965
61.9%
1,684
53.0%
1999
3,370
2,020
59.9%
1,727
51.3%
2000
3,629
2,170
59.8%
1,843
50.8%
2001
4,053
2,393
59.0%
2,002
49.4%
Source: CRS analysis of the Current Population Survey, various years.

---

CRS-14
Plan Participation by Employee Earnings. Table 7 shows the relationship
between earnings and participation in employer-sponsored pension and retirement savings
plans. All earnings in Table 7 have been indexed to 2001 dollars based on the annual
percentage changes in the wage and salary component of the Employment Cost Index.
Between 1992 and 2001, wages and salaries rose at an average annual rate of 3.4%.
Between 2000 and 2001 the proportion of year-round, full-time workers in the private
sector with annual earnings of less than $20,000 who were employed by a firm that
sponsored a retirement plan fell from 41% to 39.5%. The percentage of workers who earned
between $20,000 and $40,000 who were employed at firms that sponsored retirement plans
fell from 64.6% in 2000 to 63.1% in 2001. Workers earning more than $40,000 per year
were more likely than those earning less than $40,000 to be employed by firms that
sponsored retirement plans, although the percentage also fell for these workers from 2000
to 2001. In 2001, 75.4% of workers with annual earnings between $40,000 and $60,000
were employed at firms that sponsored pensions or retirement savings plans, a drop of 2.2
percentage points from 2000. Among workers with earnings of more than $60,000, the
percentage employed at firms that sponsored a retirement plan fell from 79.8% in 2000 to
78.0% in 2001.
Across all firms (including those that did not sponsor any kind of retirement plan), only
26.1% of full-time workers who earned less than $20,000 participated in an employer-
sponsored retirement plan in 2001. Although participation was significantly higher among
full-time workers who earned between $20,000 and $40,000 (51.9%) than among those
earning less than $20,000, it still lagged behind the participation rates of higher-paid
employees. Among those who earned between $40,000 and 60,000, 68.5% participated in
an employer-sponsored retirement plan in 2001, as did 73.1% of those who earned more than
$60,000. In all four earnings groups, participation in company-sponsored retirement plans
fell between 2000 and 2001.
Some of the lower participation rate among low-wage workers can be explained by the
lower rate of plan sponsorship among the firms at which they are employed. For example,
in 2001 75.4% percent of workers with annual earnings of $40,000 to $60,000 were
employed at firms that sponsored a pension or retirement savings plan and 68.5% of
employees with earnings in this range participated in such plans. Thus, among employees
whose employer sponsored a plan, the participation rate was 91%. (.685/.754 = .908).
Likewise, among employees whose earnings in 2001 exceeded $60,000, 78.0% worked for
an employer that sponsored a retirement plan and 73.1% participated in a retirement plan.
Therefore, the participation rate among employees who earned $60,000 or more and whose
employer sponsored a retirement plan was 94% (.731/.780 = .937). Participation rates were
significantly lower among low-wage workers. Among workers whose 2001 earnings were
less than $20,000, only 39.5% worked for an employer that sponsored a retirement plan and
just 26.1% participated in a retirement plan. Thus, the participation rate among low-wage
employees whose employer sponsored a retirement plan was 66% (.261/.395 = .661).
Among those who earned $20,000 to $40,000, 63.1% worked for an employer that sponsored
a retirement plan and 51.9% participated in such a plan, yielding a participation rate of 82%
among those whose employer sponsored a retirement plan (.519/.631 = .822).

---

CRS-15
Table 7. Participation in Retirement Plans by Annual Earnings
(Private-sector non-agricultural workers, ages 25 to 64, employed year-round, full-time)
Employee
Number of
Employer sponsors plan
Employees
Annual Earnings
workers
Workers
Percent
Participants
Percent
Under $20,000
1992
10,148
3,761
37.1%
2,558
25.2%
1993
10,657
3,772
35.4%
2,567
24.1%
1994
11,539
4,814
41.7%
3,176
27.5%
1995
12,002
4,666
38.9%
3.232
26.9%
1996
12,336
5,058
41.0%
3,461
28.1%
1997
11,552
4,659
40.3%
3,124
27.1%
1998
12,641
5,418
42.9%
3,644
28.8%
1999
10,440
4,110
39.4%
2,700
25.9%
2000
11,915
4,890
41.0%
3,330
28.0%
2001
11,257
4,444
39.5%
2,933
26.1%
$20,000-$39,999
1992
22,298
13,908
62.4%
11,721
52.6%
1993
22,527
13,836
61.4%
11,798
52.4%
1994
23,039
14,780
64.2%
12,533
54.4%
1995
24,758
15,568
62.9%
13,146
53.1%
1996
25,407
16,353
64.4%
13,625
53.6%
1997
27,378
17,670
64.5%
14,917
54.5%
1998
27,535
18,490
67.2%
15,606
56.7%
1999
27,116
17,487
64.5%
14,657
54.1%
2000
27,971
18,071
64.6%
15,167
54.2%
2001
28,205
17,800
63.1%
14,650
51.9%
$40,000-$59,999
1992
11,923
9,184
77.0%
8,445
70.8%
1993
12,069
9,058
75.1%
8,283
68.6%
1994
11,921
9,146
76.7%
8,412
70.6%
1995
12,434
9,246
74.4%
8,507
68.4%
1996
14,250
10,869
76.3%
10,073
70.7%
1997
13,486
10,347
76.7%
9,465
70.2%
1998
13,887
10,727
77.2%
9,910
71.4%
1999
14,862
11,439
77.0%
10,390
69.9%
2000
14,512
11,267
77.6%
10,322
71.1%
2001
14,824
11,172
75.4%
10,148
68.5%
$60,000 or more
1992
9,400
7,357
78.3%
6,952
74.0%
1993
9,701
7,426
76.6%
6,988
72.0%
1994
10,656
8,340
78.3%
7,922
74.3%
1995
11,493
8,864
77.1%
8,413
73.2%
1996
11,151
8,869
79.5%
8,377
75.1%
1997
11,442
9,149
80.0%
8,663
75.7%
1998
11,898
9,460
79.7%
8,933
75.3%
1999
14,647
11,757
80.3%
11,154
76.2%
2000
14,514
11,585
79.8%
10,909
75.2%
2001
14,979
11,681
78.0%
10,947
73.1%
Source: CRS analysis of the Current Population Survey, various years.
Note: Annu al earn ings hav e bee n adj usted to 2001 dollars based on the wage component of the
Employment Co st Index.

---

CRS-16
Plan Participation by Full-Time vs. Part-Time Employment. Table 8
compares retirement plan participation for year-round, full-time workers in the private sector
to those who were employed part-year or part-time. Workers with part-year or part-time
employment are much less likely to be employed by a firm that sponsors a retirement plan.
Part-time and part-year workers also are less likely to participate if their employer sponsors
a plan.
Between 1992 and 2001, the proportion of part-time or part-year workers employed by
firms that sponsored a pension or retirement savings plan rose from 37.3% to 44.9%. The
rate of participation among part-year and part-time workers whose employer sponsored a
retirement plan increased from 21.4% to 27.5%. The proportion of year-round, full-time
workers employed at firms that sponsored a pension or retirement savings plan rose from
63.6% in 1992 to 65.1% in 2001. The participation rate among year-round, full-time workers
whose employer sponsored a retirement plan was 55.2% in 1992 and 55.8% in 2001;
however, this represents a drop in participation from 2000 when the participation rate was
57.7%.
The lower rate of retirement plan participation among part-year and part-time workers
is one of the reasons that women are less likely than men to participate in a company-
sponsored retirement plan. As was shown in Table 4, there is little difference in retirement
plan participation between men and women who work year-round, full-time. Women,
however, are more likely than men to work part-year or part-time. Data from the Current
Population Survey show that in 2001, 83% of working men between the ages of 25 and 64
were employed year-round, full-time compared to 67% of working women in this age-group.
Consequently, while women who worked full-time in 2001 were almost as likely as their
male counterparts to have participated in a retirement plan (55% vs. 57%), the retirement
plan participation rate among all women 25 to 64 years old who worked in the private sector
in 2001 was significantly lower (46.8%) than the participation rate among all working men
in that age group (55.1%).15
15CRS estimates based on the March 2002 CPS. (Not shown in accompanying tables).

---

CRS-17
Table 8. Participation in Retirement Plans
by Full-Tim e vs. Part-Time Em ployment
(Private-sector non-agricultural workers, ages 25 to 64)
Workers
Employer sponsors plan
Employees participating
(thousands)
Workers
Percent
Participants
Percent
Full-time
1992
53,768
34,209
63.6%
29,676
55.2%
1993
54,954
34,092
62.0%
29,636
54.0%
1994
57,156
37,080
64.9%
32,043
56.1%
1995
60,687
38,344
63.2%
33,298
54.9%
1996
63,144
41,149
65.2%
35,535
56.3%
1997
64,002
41,855
65.4%
36,184
56.5%
1998
65,934
44,095
66.9%
38,092
57.8%
1999
67,065
44,794
66.8%
38,901
58.0%
2000
68,911
45,813
66.5%
39,728
57.7%
2001
69,265
45,097
65.1%
38,678
55.8%
Part-time
1992
24,259
9,052
37.3%
5,194
21.4%
1993
23,922
8,605
36.0%
5,025
21.0%
1994
23,840
9,347
39.2%
5,261
22.1%
1995
23,790
9,348
39.3%
5,508
23.2%
1996
24,022
9,673
40.3%
5,406
22.5%
1997
23,508
9,774
41.6%
5,465
23.3%
1998
21,937
9,679
44.1%
5,615
25.6%
1999
21,815
9,166
42.0%
5,562
25.5%
2000
21,039
9,570
45.5%
5,677
27.0%
2001
23,449
10,535
44.9%
6,444
27.5%
Source: CRS analysis of the Current Population Survey, various years.

---

CRS-18
Appendix: Sources of Data on Retirement Plans
Data on employer sponsorship and employee participation in pension and retirement
savings plans are available from several sources ways: (1) the Form 5500 must be submitted
each year to the Internal Revenue Service by employers who sponsor a retirement plan; (2)
surveys of employers are conducted by government agencies, trade associations, and others
interested in pension issues; and (3) surveys of households are conducted by government
agencies and other interested parties. The main sources of data on which this report is based
are the National Compensation Survey (NCS), conducted by the U.S. Bureau of Labor
Statistics and the Current Population Survey (CPS), administered by the Bureau of the
Census.
The IRS Form 5500. All sponsors of employee benefit plans that are subject to
ERISA must file Form 5500 annually with the Internal Revenue Service. Form 5500 must
be filed for pension plans whether or not they are “qualified” (tax-exempt), and regardless
of whether benefits continue to accrue or contributions continue to be made. Plans with
fewer than 100 participants file a slightly different form, the 5500-C/R. The Form 5500 is
a rich source of data on the financial characteristics of employer-sponsored pension plans in
the United States. Summaries of the data collected on the Form 5500 are published
periodically by the Department of Labor.16 The data collected include the number of plans
of each type, the number of participants, the number of active participants, contributions to
the plans, and the value of plan assets. Plans are categorized by number of participants, by
industry group, by method of funding, by distribution of assets among types of investment,
and other financial characteristics.
The Form 5500 has two important shortcomings with respect to identifying trends in
the prevalence of pension plan sponsorship and participation. First, data from the Form 5500
are available only for employers that sponsor a plan and are required by law to file this form
with the IRS. The data cannot be used to compare firms that sponsor pension plans with
firms that do not. Furthermore, the Form 5500 will not be useful for evaluating the impact
of Simplified Employee Pensions (SEP) and Savings Incentive Match Plans for Employees
(SIMPLE) on pension sponsorship and participation because firms sponsoring these plans
have been exempted from filing the form as an incentive for small employers to sponsor such
plans. A second drawback of the Form 5500 is the lag between data collection and the
publication of results. Because of the large volume of information processed and the need
to reject some forms because of errors or omissions, several years elapse between the date
that the forms are submitted and the time that the data become generally available.
(Abstracts from the Form 5500 for calendar year 1998 were published by the Department of
Labor in early 2002.)
Surveys of Employers. The National Compensation Survey is conducted by the
Bureau of Labor Statistics of the U.S. Department of Labor. The NCS is a survey of business
establishments. It is used to produce the Employment Cost Index (ECI), a measure of the
16The most recent of these reports is Private Pension Plan Bulletin: Abstract of 1997 Form
5500 Reports, U.S. Department of Labor, Pension and Welfare Benefits Administration,
Washington, DC (Number 10, Winter 2001).

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cost of employee compensation across industries that includes both cash and in-kind
compensation. Data from the ECI are widely used among financial analysts and economists
in both government and the private sector, and it has been designated in federal statute as the
basis for computing annual wage adjustments for civilian federal employees and military
personnel.
Prior to 1999, surveys of different sectors of the economy were conducted in alternating
years; medium and large private establishments were studied during odd years, and small
private establishments and State and local governments during even years. Separate
publications were produced for each sample. In the future, all types of establishments will
be surveyed each year, and the data will be produced by numerous characteristics, including
establishment size and sector of the economy.
The 2000 National Compensation Survey collected data from 1,436 private industry
establishments, representing over 107 million workers; of this number, nearly 86 million
were full-time workers and the remainder – nearly 22 million – were part-time workers. The
NCS uses the establishment’s definition of full- and part-time status. For purposes of this
survey, an establishment is an economic unit that produces goods or services, a central
administrative office, or an auxiliary unit providing support services to a company. For
private industries, the establishment is usually at a single physical location. The data
collected through the NCS usually are available more quickly than the information submitted
on the Form 5500, but there is a lag of about 2 years between data collection and publication
of results.
Private-sector entities such as trade associations, benefits consultants, and research
institutions also periodically conduct surveys of employers to gather information about the
structure and cost of employee benefits. One such survey cited in this report is the
Retirement Confidence Survey conducted by the Employee Benefit Research Institute in
association with the American Savings Education Council and Matthew Greenwald and
Associates. This survey was not intended to collect information about the characteristics of
retirement plans, but to gauge the views and attitudes of small employers regarding
retirement plans and related issues. The survey was conducted by telephone interview in
January and February 2001 among approximately 600 companies, of which about half
sponsored one or more retirement plans.
Surveys of Households. The Bureau of the Census conducts the Current
Population Survey each month mainly to collect information about labor force participation
needed to estimate the national unemployment rate. Each March, supplemental questions
are asked about household economic and demographic characteristics and about employment
and sources of income during the previous calendar year. The survey includes two questions
about retirement plan sponsorship and participation during the previous year. Respondents
are asked whether any employer for whom they worked had a pension or other type of
retirement plan for any of its employees. Respondents who answer “yes” to this question are
asked whether they were included in the plan. The data collected in the annual March
supplement to the CPS are especially useful for policy analysis because of the large sample
size, the breadth of topics covered, and the timeliness of the data. The March 2002 CPS was
conducted among a random sample of 99,000 households. It includes records for 217,000

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people, including 161,000 people age 15 and older of whom the labor force questions were
asked.
The large sample size of the CPS allows estimation of rates of retirement plan
participation based demographic and economic characteristics such as age, gender, full-time
or part-time status, size of firm, and annual earnings. The timeliness of the CPS data make
it useful for analyzing recent trends in retirement plan sponsorship and participation. For
example, information about retirement plan sponsorship and participation during 2001 were
collected in March 2002 and were made publicly available in September 2002. One
limitation of the pension data from the March CPS is that only two questions are asked:
whether the individual’s employer offered a retirement plan, and whether the individual was
included in that plan. Among the important questions not asked as part of the March CPS
are 1) whether a participating employee is covered by a defined benefit or defined
contribution plan and 2) why an employee who is not included in an employer-sponsored
plan is not covered by the plan.
The Census Bureau also collects information about retirement plan sponsorship and
participation in another of its household surveys, the Survey of Income and Program
Participation (SIPP)17 Households are asked to participate in the SIPP over a 32-month
period, with interviews taking place once every 4 months. Beginning with the 1984 survey,
and approximately every two years thereafter, the SIPP has included a series of questions on
retirement plan sponsorship and participation. Iams (Social Security Bulletin, 1995)
compared the information collected in the CPS pension supplements with results obtained
from the SIPP for the same years. He concluded that the two surveys produced similar
estimates of retirement plan participation in 1993 and of the trends in coverage from 1983
to 1993, and suggested that “the SIPP’s pension information can substitute for specialized
studies in the CPS.” One drawback of the SIPP is that survey results are not released as
quickly as with the CPS due to complex editing procedures required for longitudinal data
sets.
Other national surveys conducted by federal agencies also collect information about
participation in employer-sponsored pension and retirement savings plans. Two that are
widely used in public policy research are the Survey of Consumer Finances (SCF), conducted
by the Board of Governors of the Federal Reserve System, and the Health and Retirement
Study (HRS), administered by the U.S. Department of Health and Human Services. The SCF
is conducted every three years by the Federal Reserve Board in cooperation with the Internal
Revenue Service among a sample that varies in size from about 3,000 to 4,000 households.
This survey collects detailed information on household assets, liabilities, and demographic
characteristics. The HRS is an ongoing study of 12,600 individuals focusing on the
transition to retirement. It comprises a nationally representative sample of people who were
between the ages of 51 and 61 in 1992 and their spouses. These individuals are interviewed
every two years to measure factors that affect work, retirement, health and financial
decisions.
17 The Census Bureau also collects information on pension coverage in the Contingent
Work Supplements (CWS) to the CPS, conducted in February of odd-numbered years. A
summary of the February 1999 CWS can be found at [http://www.dol.gov/dol/pwba].

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