There's a lot of talk about the adequacy of the current 401(k) system. Naysayers complain it's not broadly accessible, and in a sense, that's true. According to the latest data from the Bureau of Labor Statistics' National Compensation Survey, 40 percent of all workers don't have access to a defined contribution benefit. (The BLS is talking only about company-sponsored benefits, not IRAs.)
In lamenting the lack of 401(k) availability, some suggest we'd all be better off with defined benefit plans. Unfortunately, the BLS indicates 72 percent of all workers do not have access to defined benefit plans. Pensions don't appear to be as realistic an alternative as some may think.
The BLS statistics include both government and private workers. This may skew the results more favorably to pensions (which most government workers have) and less favorably to 401(k) plans (which most government workers do not have). The best example is the breakdown on “public administration” workers (not including education and health services) offered by the BLS. While 87 percent of those workers have access to a defined benefit plan, only 36 percent have access to a defined contribution plan.
Continue Reading for Free
Register and gain access to:
- Breaking benefits news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Christopher Carosa
Chris Carosa has been writing a weekly article and monthly column for BenefitsPRO online and BenefitsPRO Magazine since 2011 and is a nationally recognized award-winning writer, researcher and speaker. He’s written seven books, including From Cradle to Retire: The Child IRA; Hey! What’s My Number? – How to Increase the Odds You Will Retire in Comfort; A Pizza The Action: Everything I Ever Learned About Business I Learned By Working in a Pizza Stand at the Erie County Fair; and the widely acclaimed 401(k) Fiduciary Solutions. Carosa is also Chief Contributing Editor of the authoritative trade journal FiduciaryNews.com and publisher of the Mendon-Honeoye Falls-Lima Sentinel, a weekly community newspaper he founded in 1989. Currently serving as President of the National Society of Newspaper Columnists and with more than 1,000 articles published in various publications, he appears regularly in the national media. A “parallel” entrepreneur, he actively runs a handful of businesses, including a small boutique investment adviser, providing hands-on experience for his writing. A trained astrophysicist, he also holds an MBA and has been designated a Certified Trust and Financial Advisor. Share your thoughts and story ideas with him through Facebook (https://www.facebook.com/christophercarosa/)and Twitter (https://twitter.com/ChrisCarosa).
