The Pension Coverage Problem in the Private Sector

Source: Alicia H. Munnell, Rebecca Cannon Fraenkel and Joshua Hurwitz, Center for Retirement Research at Boston College, IB#2012-16, September 2012

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.

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