Is Pension Inequality Growing?
Employer-sponsored pensions are an important source of retirement income and often make the difference between having a comfortable retirement and just scraping by. Over the past two decades, pension sponsorship and participation have remained relatively constant. At any given point in time, roughly half of private sector workers age 25-64 are covered by pension plans. This constancy, however, masks a growing inequality in pension participation by income that has become more pronounced with the shift from traditional defined benefit plans to defined contribution plans. This brief documents and explores trends in pension participation by income. The first section discusses the relative importance of private pensions as a source of retirement income. The second section examines trends in pension sponsorship and participation rates. The third section explores why some individuals choose not to participate. The final section concludes that the shift to defined contribution plans has been a significant factor in the drop in coverage for low earners.
|Date of creation:||Jan 2010|
|Date of revision:||Jan 2010|
|Contact details of provider:|| Postal: |
Phone: (617) 552-1762
Fax: (617) 552-0191
Web page: http://crr.bc.edu/Email:
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gur Huberman & Sheena Iyengar & Wei Jiang, 2007. "Defined Contribution Pension Plans: Determinants of Participation and Contributions Rates," Journal of Financial Services Research, Springer, vol. 31(1), pages 1-32, February.
- Alicia H. Munnell & Francesca Golub-Sass & Dan Muldoon, 2009. "An Update on 401(k) Plans: Insights From the 2007 SCF," Issues in Brief ib2009-9-5, Center for Retirement Research, revised Mar 2009.
When requesting a correction, please mention this item's handle: RePEc:crr:issbrf:ib2009-10-1. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Amy Grzybowski)or (Christopher F Baum)
If references are entirely missing, you can add them using this form.