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PBGC Blog: Retirement Matters

Since the end of the recession more people are working for employers that offer retirement plans, and plan participation is up, according to a new report from the nonprofit Employee Benefit Research Institute — but most workers still have no retirement plan.

The data in the report is from the U.S. Census Bureau's latest Survey of Income and Program Participation (SIPP) on retirement plan participation, covering December 2011 to March 2012.

Some key takeaways are:

  • 61 percent of all workers over age 16 had an employer that sponsored a pension or retirement plan for employees in 2012, up from 59 percent in 2009.
  • Workers participating in a plan increased to 46 percent in 2012, up slightly from 2009 (45 percent) but below 2003 (48 percent).
  • The vesting rate (the percentage of workers who say they were entitled to some pension benefit or lump-sum distribution if they left their job) stood at 43 percent in 2012, up from 24 percent in 1979.
  • This change is largely due to the increased number of workers participating in defined contribution retirement plans (such as 401(k) plans), where employee contributions are immediately vested, and faster vesting requirements in private-sector pension plans.
  • 401(k)-type plans were considered the primary plan by 78 percent of workers with a plan. Defined benefit (pension) plans were the primary plan for 21 percent of workers.

Take a look at notes from the Retirement Plan Participation: Survey of Income and Program Participation (SIPP) Data, 2012

The Wall Street Journal CFO Network Annual Meeting 2013 wrapped up last month. PBGC Director Josh Gotbaum participated in an interview session titled "The Great American Pension Crisis: Funding Past Promises and Future Retirement."

In his interview with Gabriella Stern, Deputy Managing Editor, WSJ Digital Network, Director Gotbaum focused on how U.S. companies will tackle mounting pension obligations in the coming years.

Dallas Salisbury, President and CEO, Employee Benefit Research Institute, also offered perspectives.

Take a look at the Dow Jones video recording of the interview. NOTE: The video may take a minute or two to fully load.

There isn't any doubt that the economy has taken a big hit in recent years.

As the housing market begins to rebound and the stock market hits a new high, the percentage of Americans who are confident that they will have enough money for a comfortable retirement is the lowest it has been in 23 years.

According to the latest Retirement Confidence Survey by the Employee Benefit Research Institute (EBRI) only 13 percent were very confident of having a comfortable retirement, while 38 percent were somewhat confident, 21 percent not too confident, and 28 percent not at all confident.

Some of the biggest factors influencing the drop in confidence are high debt levels, and uncertainty about employment.

Read the 2013 EBRI Retirement Confidence Survey Results.

Americans are living longer, healthier lives, and enjoying more years of retirement. That's a very good thing. But it means people will need enough money to pay for those extra years.

How much is enough for you? With so many factors to think about–health, housing, hobbies, to name a few–figuring it out can be a real challenge.

There are many tools on the internet that can help.  A good place to start is the Ballpark Estimate calculator, created by the respected nonpartisan Employee Benefit Research Institute. It's easy to use, and gives you a quick estimate of how much you'll need to save for those retirement years.

EBRI' s calculator is part of its Choose to Save program, which offers many useful tips for future retirees.  Check it out at www.choosetosave.org.

Retirement Realities, 2012

  |   March 14, 2012

Each year the folks at the Employee Benefit Research Institute gather data on retirement across the whole country. EBRI’s 2012 Retirement Confidence Survey tells the story of retirement security today.

For instance, only 14 percent of Americans feel “very confident” they will have enough money to live comfortably in retirement. Sixty percent of households have less than $25,000 in savings.

The survey also shows more people expect to work longer: 37 percent expect to retire after age 65, up from 11 percent in 1991. But those plans don’t always work out: Half the retirees surveyed had to leave work earlier than expected due to health problems or downsizing.

For the complete survey, and a lot more information on retirement issues, go to www.ebri.org.