Employer-Provided Pensions: Less to Count On

This report by Sandy Mackenzie and Kebin Wu uses the 2007 Survey of Consumer Finances to assess the extent and type of pension coverage for workers and families, in 2007 and over time.  The authors find that the coverage of the employer-provided pension system is limited, and there are marked disparities in coverage between rich and poor, Hispanic and white, well- and less well-educated and other social groups.  The Automatic IRA would broaden coverage substantially, and improving the Saver’s Credit would provide incentives for low- and moderate-income workers to save for retirement.  In addition, defined contribution (DC) plans are now much more prevalent than traditional defined benefit (DB) plans.  Given the dominant role now played by 401(k)-type plans, it is important to broaden their coverage and to encourage workers to contribute as much as they can.