Pension Participation and Uncovered Workers

Nadia S. Karamcheva Geoffrey T. Sanzenbacher

IB#10-13

The brief’s key findings are:

  • The Obama Administration has proposed “Auto-IRAs” to boost pension coverage among those not currently offered a plan.
  • Such a policy is seen to offer great potential, given that 60 percent of low-income workers currently offered a 401(k) choose to participate.
  • However, these low-income workers with 401(k)s are different from their counterparts at firms that do not offer 401(k)s.
  • Taking this difference into account, take-up among low-income workers could be as low as one third.