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Explaining the Decline in the Offer Rate of Employer Retirement Plans between 2003 and 2012

Author

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  • Teresa Ghilarducci
  • Joelle Saad-Lessler

Abstract

Workplace retirement plans (deferred compensation plans [DCs] and deferred benefit plans [DBs]) help workers save for retirement conveniently, consistently, and automatically. But the percentage of firms offering retirement accounts is steadily declining. Between 2001 to 2003 and 2010 to 2012, the retirement plan offer rate of firms dropped from 63 to 55%. The drop is driven by a decline in both DCs and DBs. Using a probit model and an Oaxaca–Blinder threefold decomposition technique applied to data from the Current Population Survey (CPS) for 2001 to 2003 and 2010 to 2012, and using longitudinal analysis of the Survey of Income and Program Participation (SIPP) 2008 panel waves 3 and 11, the authors find that the labor-contracting environment dominates individual- and firm-level variables in explaining whether employers offer a retirement account to their workers. Therefore, attempts to raise retirement account offer rates must address the decline in workers’ bargaining power and the changes in norms relating to provision of benefits. This study contributes to the important discussion about trends in DC and DB coverage and the decline in retirement security.

Suggested Citation

  • Teresa Ghilarducci & Joelle Saad-Lessler, 2015. "Explaining the Decline in the Offer Rate of Employer Retirement Plans between 2003 and 2012," ILR Review, Cornell University, ILR School, vol. 68(4), pages 807-832, August.
  • Handle: RePEc:sae:ilrrev:v:68:y:2015:i:4:p:807-832
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