Taking a few steps back

Taking a few steps back

A new report from the Congressional Research Service shows that we still have a long way to go when it comes to ensuring that American workers are covered by workplace retirement plans.

In fact, we’ve taken a few steps back.

According to the report:

1. Fewer private-sector workers were offered a workplace retirement plan in 2006 than in 1998.
2. There has been no net increase in the number of workers participating in a workplace retirement plan between 1998 and 2006.
3. Fewer workers were offered a defined contribution plan, such as a 401(k) plan in 2006 than in2003.
4. Fewer workers participated in a defined contribution plan in 2006 than in 2003.

The statistics in this report show that, even before the current economic crisis, retirement plan coverage and participation rates have remained relatively stagnant since 1998.

The report also shows that the amounts people are saving remain low. In 2006, half of all people putting money into 401(k) and other private-sector defined contribution plans have account balances of less than $25,000. Fewer than 5% of participants contributed the maximum permissible amount, $15,000 in 2006.

Now with workers having even less money to put away for retirement, it is more imperative than ever that we find a solution to the retirement income crisis.  What do you think?

For more information on trends in pension coverage, check out our Reports page.