Female Workers Participate in Retirement Plan More than Males

Considering the uncertain future of programs like Medicare and Social Security — will eligibility age increase or higher taxes or levied or benefits reduced? — retirement financing is a vital concern for all Americans.

According to a November 2013 issue brief from the Employee Benefit Research Institute (EBRI), retirement plan participation varies widely by demographics and geographic location. Full-time, full-wage and salary workers had the highest participation rate (53.5%), but overall just 39.4% of the population, or 61.6 million, participated in an employment-based retirement plan in 2012.

Not only is the overall participation down from 2011, but rates in 2009 and in 2010 were higher, according to EBRI.

Plan participation is strongly tied to macroeconomic factors and the financial crisis of 2008 and 2009 continues to affect participation “as the economy has yet to recover to the unemployment levels of the late 1990s,” wrote author Chris Copeland, PhD.

While just 39.4% of workers participated in a plan in 2012, just 48.6% of all workers actually even work for an employer that is sponsoring a plan. Far more public-sector workers had access to and participated in retirement plans with 79.3% working for an employer sponsoring a plan and 71.5% actually participating in the plan.

Interestingly, while female wage and salary workers ages 21 to 64 participated in retirement plans at a lower level than males, full-time, full-year females actually had a higher participation rate (55% for women compared to 52.3% of men).

Furthermore, geographic location also impacted the probability of a worker’s participation in an employment-based retirement plan. Workers in Iowa had the highest probability (54.1%) of participating in a plan in 2012 while New Mexico had the lowest probability (32.1%).

The South and the West had the states with the lowest levels of participation — New Mexico, Florida, Nevada, Texas and Arizona — while the states in the Mid-Atlantic and the upper Midwest had the highest participation levels — Iowa, Minnesota, the District of Columbia, Wisconsin and Maryland.

“And while participating in a retirement plan is important, it is just one step among several toward financing a comfortable retirement,” Copeland wrote. “How the money is managed to ensure it lasts throughout retirement will be an additional crucial factor for the sharply growing number of retirees who may receive only lump-sum distributions from their retirement plans — rather than annuities — outside of Social Security.”