The Pension Coverage Problem in the Private Sector
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.