The Pension Coverage Problem in the Private Sector

IB#12-16

The brief’s key findings are:

  • Only 42 percent of private sector workers age 25-64 have any type of pension coverage in their current job.
  • This coverage gap creates two types of problems:
    • More than a third of households end up at retirement with only Social Security.
    • Workers who move in and out of coverage accumulate only modest amounts in their 401(k)s.
  • Simplifying pension plans has not solved the coverage problem.
  • Recently, both federal and state policymakers have put forth proposals to cover the uncovered.
  • But given the low level of Social Security benefits and modest 401(k) balances, any new tier should be universal.