PRELIMINARYANDINCOMPLETEPLEASEDONOTCITEWITHOUTAUTHORPERMISSION

Whichemployerssponsordefinedcontributionplans?

Evidencefromlinkedemployer-employeeadministrativerecords*

MichaelGideon,Ph.D.U.S.CensusBureau

JoshuaMitchell,Ph.D.U.S.CensusBureau

November7,2016

________________________________________

* Thispaperisreleasedtoinforminterestedpartiesofongoingresearchandtoencouragediscussionofworkinprogress.TheanalysisandconclusionssetfortharethoseoftheauthorsanddonotindicateconcurrencewithothermembersoftheresearchstaffoftheU.S.CensusBureau,nordoesitrepresentanyofficialpositionoftheU.S.CensusBureau..Anyerrorsareourown.

ABSTRACTThis paper explores an innovative approach to measuring defined contribution (DC) retirement plan sponsorship using tax administrative records. Using this measure, we estimate lower employer sponsorship rates yet higher worker coverage than estimates from establishment and household surveys. We examine characteristics of this measure by linking it to employer-level data from the Census Bureau’s Business Register, plan-level data from Form 5500s filed annually with the Internal Revenue Service (IRS), and household-level data from the Current Population Survey Annual Social and Economic Supplement (CPS ASEC) and the American Community Survey (ACS).

Using universe administrative records we find that in 2012, 79 percent of all wage and salary employees work for an employer who sponsors a defined contribution (D.C.) plan. Of these workers, we observe that 41 percent made a contribution to a D.C. plan. This works out to an overall measured participation rate in D.C. plans of 32 percent. We also document considerable heterogeneity in sponsorship across employer size, average annual salaries, and industry sector.

Using linked survey-administrative record data we find that among private sector wage and salary workers age 25-64, only 53 percent report that they work for an employer that offers any retirement plan (Defined Benefit or D.C.), while the administrative records indicate a D.C. offer rate of 75 percent. Among these workers, 44 percent report that they participated in a retirement plan, while the administrative records indicate a participation rate of 39 percent.

However, we emphasize that the currently available administrative records (1) cannot be usedto measure defined benefit participation, (2) can only be used to measure contributions totraditional (non-Roth) accounts and (3) do not measure D.C. plans where employers make contributions on behalf of employees even in the absence of an employee contribution. Thus, actual participation rates in any retirement plan are likely larger than we are able to observe at this time. Actual sponsorship rates may also be somewhat higher. In addition, some employeeswho work for an employer who offers retirement benefits may not themselves be eligible toparticipate in the plan. We also emphasize that more information about individual circumstances is required to draw firm conclusions about savings adequacy and retirement preparation. DRAFT

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1. IntroductionAccuratemeasurementofemployer-providedpensioncoverageiscriticallyimportant

forunderstandinghowwellAmericansarepreparedforretirementandforconsidering

potentialpolicyreformstotheretirementsystem.YetresearchintheU.S.hasbeen

constrainedbydatalimitations.Inthispaper,wedevelopaninnovativeapproachtomeasuring

definedcontribution(DC)pensionplancoverageandparticipationusingtaxadministrative

records.Weexaminecharacteristicsofthismeasurebylinkingittoemployer-leveldatafrom

theCensusBureau’sBusinessRegister,plan-leveldatafromForm5500sfiledannuallywiththe

InternalRevenueService(IRS),andhousehold-leveldatafromtheCurrentPopulationSurvey

AnnualSocialandEconomicSupplement(CPSASEC)andtheAmericanCommunitySurvey

(ACS).Wepresentourmethodologyandresultsusingdatafrom2012.

UsingW-2taxrecordsfortheU.S.workforce,weidentifyfirmsthatsponsorDCplans

throughtheexistenceoftax-deferredretirementcontributionsbyanyemployeeofthefirmina

givenyear.Accordingtothismeasure,13.7percentofemployerssponsorplansand71.2

percentofjobsareatfirmssponsoringplans.Thesesponsorshipratesvarysubstantiallybyfirm

sizeandaverageemployeewages.Wealsolinkthenewemployer-levelmeasuretothe

BusinessRegister,allowingustoidentifyheterogeneityinsponsorshipandparticipationrates

andrelateittoarichsetoffirmcharacteristicsincludingindustryandlegalformof

organization.

Apotentiallimitationofthismethodologyisthatitdoesnotaddressdefinedbenefit

(DB)pensionsandprovideslittleinformationaboutcharacteristicsofplansidentifiedintheW-2

records.Toinvestigatethisissue,wefurtherlinktheW-2recordstotheForm5500dataand

estimatecoverageratesacrossbothDCandDBpensionplans,aswellasthepresenceofaDC

autoenrollmentplan.

BecausefewfirmsofferonlyDBplans,ourmeasureofDCcoverageusingW-2sbased

measureofDCsponsorshiproughlyapproximatesoverall(DBandDC)retirementplan

coverage.ThisanalysisalsoillustratestheimportanceofusingtheBusinessRegisterforfirms

thatusemultipleEINs.

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Tounderscoretheimportanceofourmethodology,weusetheCPSASEClinkedtoW-2

recordstodocumentsubstantialdifferencesbetweentheW-2basedmeasureandsurveyself-

reportedpensionplancoverageandparticipation.Workersunderreportemployersponsorship

ofDCplansbyroughly20percent.Theseworkersareeitherunawarethattheiremployersoffer

pensionplans,ormisunderstandthesurveyquestion.This,inturn,leadstoestimatesoftake-

upratesthataresubstantiallylargerthanwhatwefindbasedonW-2coverageand

participation.

Wewerealsointerestedinexaminingcoverageratesacrossvariousdemographic

groupswithintheU.S.Todothis,weuseindividual-leveldatafromtheAmericanCommunity

Survey(ACS)linkedtotheW-2records,andweproducenationwideestimatesofretirement

plancoverageandparticipationratesforvariousdemographicsub-groups.Wefindlarge

differencesinparticipationandcontributionsacrosseducationandracegroups,evenafter

controllingforincome.

2. Background

2.1 PriorStudiesofPensionPlans

ThereisnowconvincingevidencethatDCplansponsorscanchangeparticipant

behaviorusingautomaticenrollment,defaultcontributionsandmatchrates(Papke,1995).

Chettyetal.(2014)arguethatroughly15percentofDanishworkersare“active”ratherthan

“passive”savers,meaningtheychangetheirDCcontributionswhenthereisadefault

contributionlevelthatdivergesfromtheiroptimallevel.

Inlightofthesefindings,policymakersareincreasinglyfocusedonincentivizingfirmsto

sponsorplansandprovidemoregenerousplancharacteristics.Forexample,theWhiteHouse

budgetfor2017includesprovisionsdesignedto“makeiteasierforemployerstocreatepooled

401(k)planstolowercostandburden.”Othercomponentsofthebudgetaimtoincrease

savingsratesatfirmsalreadyofferingDCplans,specificallyto“providetaxcutsforbusinesses

thatchoosetooffermoregenerousemployerplansorswitchtoautoenrollment”(TheWhite

House,2016).

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Despitefirmsplayingacriticalroleinshapinghouseholdretirementsavings,andthe

increasingfocusinpolicydiscussions,littleisknownaboutfirm-leveldecisionsregarding

sponsorshipandplandesign.Researchershaveofferedexplanationsforwhyemployersoffer

pensionstotheirworkers,butthereisnoconsensusaboutwhichfactorsaremostimportant.

Previousliteraturefocusesonhowtheprimaryfunctionofpensionsistobondworkerstotheir

employers(Allen,Clark,andMcDermed1993;Ippolito1991).Someresearchfocusesonsupply-

sidefactorsinfluencingwhetherafirmoffersaplan,orwhethertoofferaDCordefined-

benefit(DB)plan(AaronsonandCoronado,2005;Dummann,2008),andmorerecentworkhas

investigatedwhetherDanishfirmstailorpensionplanstotheiremployees’savingpreferences

(Fadlonetal.(2016).

2.2 Dataondefinedcontributionsponsorshipandparticipation

IntheU.S.,themostcredibleresearchonworkerparticipationdecisionscomesfrom

responsestoexperimentalandquasi-experimentalvariationinplancharacteristics.These

studiesuseproprietaryplan-leveldatafromplansponsors(Nessmith,UtkusandYoung,2007;

VanDerhei,2010)anddatafromindividualfirms(Choietal.2004;MadrianandShea2001)to

exploitwithin-firmvariationovertime.Generalizingthesefindingstoaheterogeneous

populationisnotpossible.Thatwouldrequireeitherpopulation-leveldataorarepresentative

setoffirmsandworkers.

Plan-leveldatafromForm5500filingsprovidesinformationaboutspecificplans,buthas

severalshortcomingswhenstudyingfirmsponsorship,individualcoverageandindividual

participation.Form5500datadoesnothaveinformationaboutnon-sponsors.Second,some

sponsors—namely,publicsectorandsomesmallerSEPandSIMPLEplansponsors—arenot

requiredtofileForm5500.Anotherlimitationisthatpriorto2015,Form5500didnotcollect

informationonwhichemployersparticipatedinMultiemployerandMultipleEmployerplans.

TheNationalCompensationSurvey(NCS)fromtheBureauofLaborStatistics(BLS)

containsinformationaboutestablishmentsandtheirspecificplans,butlacksinformationabout

thecharacteristicsofworkerscoveredbytheseplans.Therelativelysmallsamplesizealso

limitsresearchers’abilitytostudysmallfirms,aswediscusslaterinthispaper.

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HouseholdsurveyssuchastheCurrentPopulationSurvey(CPS),SurveyofIncomeand

ProgramParticipation(SIPP),andtheHealthandRetirementStudy(HRS)collectdatafrom

individualsincludingdemographiccharacteristicsandworkerself-reportsabouttheiremployer-

sponsoredretirementplans.However,workers’imperfectknowledgeabouttheirplans

(Mitchell,1988;Gustman,Steinmeier,andTabatabai,2009),highratesofsurveymisreporting

(DushiandIams,2010),andincreasingsurveynon-responserates(MeyerandSullivan,2015)

presentchallengeswhenanalyzingcoverageandtake-up.Inparticular,itseemsplausiblethat

workersunderreportcoverageinplansforwhichtheydonotparticipateandunobservable

characteristicsaffectingplanknowledgeaboutcoveragecouldbiasresultsconcerningtake-up.

WorkersmightnotknowaboutEmployeeRetirementIncomeSecurityAct(ERISA)rules

concerningnon-discrimination,and,therefore,donotparticipatebecausetheyassumethey

arenotcoveredundertheiremployer’splan.Ontheotherhand,workerswhodonotwantto

participateinapensionhavelittleincentivetoknowabouttheiremployer’splansponsorship.

Estimatesofnationwidepensioncoveragevarysubstantiallydependingonthesourceof

data,particularlywhethertheunitofanalysisistheworkerorthefirm.Additionally,high-

qualityworker-leveldataareneededtounderstandparticipation.Intherestofthispaper,we

showhowemployer-employeelinkeddataimproveourabilitytounderstandsponsorship,

participation,andthepotentialimpactofpoliciesincentivizingfirmsponsorship.

3. DataandmethodologyInordertounderstandthedeterminantsandconsequencesofemployer-sponsorship,

wedrawuponanarrayofadministrativerecordsanddevelopanewapproachtomeasuring

firmsponsorshipofDCplans.Inthissection,wedescribeindetailthedatausedforourstudy.

3.1 W-2Records

OurprimarydatasourceistheuniverseofW-2taxrecordsobtainedfromtheIRS.Each

year,employersissueaW-2toeachoftheiremployees.TheW-2scontaininformationon

annualearningsandemployeecontributionstoemployer-sponsoredtax-deferredDCplans

(e.g.,401(k)s,403(b)s.).ContributionsarebasedonamountsincludedinBox12oftheW-2.

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WedefineannualearningsforeachjobasthesumofBox1(wages,salaries,bonuses,etc.)and

Box12amounts.

Wemeasureparticipation,sponsorshipandtake-upusingthisinformationfromtheW-

2s.Wedefineindividualparticipationashavingpositivetax-deferredDCcontributionsinthe

givenyear.Afirmsponsorsoroffersaplanifanyemployeeofthefirmparticipatesinagiven

year.Thetake-uprateistheshareofemployeesatthefirmwhoparticipate(amongfirmsthat

offeraplan).

Throughoutthispaper,thebasicunitofanalysisisthejob,whichisdefinedasan

employer-employeepair.Insomecases,weaggregateuptotheEmployerIdentification

Number(EIN)toproduceemployer-levelstatistics.Inothercases,weaggregateupfromthe

jobleveltotheworkerleveltomeasureretirementplanaccessratesofindividuals.Ineach,we

clearlyidentifytheunitofanalysisforourresults.WeusetheEINlistedontheW-2tolinkto

otherCensusemployerdatasources.EmployeesaretrackedbasedontheirProtected

IdentificationKey(PIK),whichisauniqueidentifierdevelopedbytheCensusBureauthat

facilitateslinkingindividualstootherindividual-leveldatasets.1

ThereareafewcaveatswithusingW-2recordstodefineDCsponsorshipand

participation.Whileitwouldbeworthwhiletoexaminedifferencesbetweenemployer-

sponsoredplansandothersponsors—suchasunions—wecannotdistinguishbetweenthetwo

inW-2records.Nevertheless,ourgoalistomeasureDCplancoverage,and,therefore,itdoes

notmatterwhethertheplanistechnicallysponsored(andmanaged)bytheemployerversus

otherarrangements.2AnotherchallengeisthatwemightnotobserveallDCplancontributions.

Itispossible(althoughuncommon)forafirmtoofferDCplanswithoutitshowinguponanyof

theiremployee’sW-2returns.Thiswouldhappenifemployerscontributetoplanswithoutany

employeecontributions.After-taxcontributionstoRoth-designatedaccountsarealsoabsent

fromourmeasureofcontributions.WhileparticipationinRoth-designatedemployer-sponsored

1SeeWagnerandLayne(2014)formoreinformationonthePIKassignmentprocess.2Thisdistinctionbetweenemployer-sponsoredandunion-sponsoredplansiscrucialwhenmergingW2recordstoinformationonplansinForm5500.WeaddresstheseissuesinthesectionabouttheForm5500data.

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planshasgrownsincetheirintroductionin2006,firmsofferingtheRothoptiontypicallydoso

inadditionto(ratherthaninsteadof)tax-deferredaccounts.Infact,theemployercontribution

totheseaccountsmustbefrompre-taxearnings,requiringemployerandemployee

contributionstobemaintainedseparatelybyplansponsors.3IgnoringRothcontributionscould

leadtounderestimatingparticipationrates.Wedonotexpectthistoimpactoursponsorship

ratesforlargefirms,butcouldforsmallfirmsifallworkersmakeafter-taxratherthanbefore-

taxcontributions.

3.2 BusinessRegister

Weexploredifferencesinsponsorshipandparticipationratesacrossfirmcharacteristics

bylinkingfirmsintheW-2stotheU.S.CensusBureau’sBusinessRegister(BR)usingEINs.4This

databaseisdesignedtoincludeallactiveestablishmentsintheU.S.;itgeneratesthesampling

frameforestablishmentandfirm-levelsurveysfieldedbytheCensusBureau.WefocusonEINs

thatareintheBRrecordsin2012.EINsassociatedwithnon-employerfirmsaretypically

removedfromtheBRrecords.Single-unitfirmstypicallyhaveoneEIN,whereasmulti-unitfirms

mayhavemorethanoneEIN.TheBRhasinformationaboutwhichEINscorrespondtothesame

firm.ForsomeanalyseswecombineEINstoconstructafirmlevelmeasure.

3.3 Form5500

EmployersthatsponsoremployeebenefitsmustfileForm5500AnnualReturn/Report

ofEmployeeBenefitPlan(“Form5500”)formostbenefitplans.5Form5500helpscompanies

satisfyannualreportingrequirementsunderthe1974EmployeeRetirementIncomeSecurity

Act(ERISA)andundertheInternalRevenueCode.Becauseemployeesareentitledto

informationabouttheirpensionbenefits,thesefilingsaregenerallypublicrecords.The

3WearestillinvestigatingwhetherForm5500datahasinformationtoidentifyplanswithaRothoption.Sincetheemployerandemployeecontributionsmustbekeptseparate,it’spossibletheyshowupseparatelyinForm5500records.4TheBusinessRegister(BR)containsallEINswhoreportpayrollonIRSForm941or943inthecurrentyear.AlmostallEINsintheW-2recordsarealsointheBR.NewlyestablishedandsmallerfirmsarelesslikelytobeintheBR.SeeJarminandMiranda(2003)formoreinformationontheBR.5SmallerplansthatsatisfycertaincriteriamayinsteadfileaForm5500-SF,ShortFormAnnualReturn/ReportofEmployeeBenefitPlan(“Form5500-SF”).

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return/reportmustbefiledwhetherornottheplanis“tax-qualified,”benefitsnolonger

accrue,contributionswerenotmadethisplanyear,orcontributionsarenolongermade.

SponsorsofbothDCandDBplansarerequiredtofile.Certainemployersandtypesofplansare

exemptfromForm5500filingrequirements.Thisincludesallgovernmentplans,andsomevery

smallprivatesectorplans,includingcertainSimplifiedEmployeePensions(SEPs),Savings

IncentiveMatchPlanforEmployeesofSmallEmployers(SIMPLEs),andone-participantplans

thatfile5500-EZ(whichisnottreatedaspublicinfo).

WeuseForm5500datafromthe2012ResearchFiletoenhanceourunderstandingof

estimatesofDCplansponsorshipusingW-2records.WhileW-2recordsmeasureDCcoverage,

wecannotmeasureoverallpensioncoveragewithoutinformationonDefinedBenefit(DB)

plans.TheForm5500dataalsoincludeplancharacteristicsthatareabsentintheW-2s.

4.ResultsTable1showsDCplancoverageandtake-upratesusingourEIN-levelmeasures

constructedfromtheuniverseofW-2recordsin2012.Overall,thereare6.2millionfirmsinthe

2012W-2records,andatleast13.7percentofthemsponsoredDCplans.Therewere218.9

millionuniquejobs,andatleast71.2percentwereatfirmssponsoringDCplans.Amongjobsat

thesefirms,33.6percentmadeDCcontributions.

[InsertTable1]

Sincepeoplecanhavemultiplejobs,wealsocalculateindividual-levelcoverageand

take-uprates.Amongthe154.8millionuniqueindividualswithaW-2,roughly78.5percent

haveoneormorejobswithDCcoverage.Thetake-uprateamongtheseworkersis41.4

percent.Restrictingtothe135.1millionworkerswithearningsequivalenttoparttime

employmentforhalftheyearatthefederalminimumwage($3,770totalannualearnings),

coverageis80.8percentandtake-upis45.7percent.6

6ThisrestrictionisthesameastheoneusedbySongetal.(2015).Itexcludesindividualswhodidnothaveareasonablystronglabormarketattachment.Weconsideranindividualtobefull-timeinagivenyearifsumming

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3.3.1 DCsponsorshipandparticipation

Table2summarizessponsorshipratesandaverageparticipationratesacrossEINsize,

whereEINsizeisdefinedasthetotalnumberofjobsoccurringatsometimeduring2012.This

measureofEINsizeprovidesanupperboundonthenumberofemployeesattheEINata

particularpointintime.7PanelAreportsEIN-levelestimates,whereasPanelBreportsjob-level

estimates.InbothpanelsthefirstcolumnisthepercentageofEINs(jobs)ineachEINsize

category.Mostfirmsemployasmallnumberofemployees,yetmostemployeesworkatlarge

firms.In2012,over70percentoffirmshadfewerthan10employees,andover85percenthad

fewerthan25employees.Whileonlyone-thirdofonepercentoffirmshad1,000ormore

employees,theyaccountedforapproximately50percentofalljobs.

[InsertTable2]

Columnstwoandthreesummarizesponsorshipratesandaverageparticipationrates

acrossfirmsize.WefirstlookatthepercentageoffirmsofferingDCplans.Mostfirmsdonot

offerDCplans,butmostjobsareat(large)firmsthatofferplans.Thatis,only13.7percentof

firmsofferDCplans,buttheyaccountsfor71.2percentofthe218.9milliontotaljobs.While72

percentofEINswith100ormoreemployeesofferDCplans,only12percentofEINswith1-99

employeesofferthem.

Next,wecompareaveragetake-upratesamongemployeesatfirmsthatofferDCplans.

Theaverageparticipationrateacrossallfirmsis45percent.Take-upis100percentatsingle-

employeefirms,byconstruction.Take-upisover50percentforfirmswith2-9employees,and

41percentforfirmswith10-24employees.Theratethenplateausasfirmsizeincreases,

rangingfrom32and37percentforfirmswithatleast25employees.

Wealsogroupfirmsbynumberofemployees—1to9,10to99,and100ormore—and

computeanEIN-levelaverageofemployeeearnings.Firmsarethengroupedintoventilesby

acrossalljobs,heorsheearnsatleasttheequivalentof40hoursperweekfor13weeksatthefederalminimumwage($3,770in2012).7Thismeasureofsizeisdifferentfromthemeasureusedinmostbusinessstatistics,whichistypicallybasedonemployerreportsofnumberofemployeesatapointintime.

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theaverageoftheiremployee’searnings.TheseventilesareconstructedwithinEINsize

categories.8

Figure1(A)plotsthemeanofferratesbyfirmsizecategoriesandacrossaverage

earningsventiles.Sponsorshipratesarehighestforlargefirmswithhighwages.The

sponsorshiprateisover98percentforthetopventileofemployeeearningsamonglargefirms.

SmallfirmsrarelyofferDCplans,andsponsorshipisconcentratedamongthoseinthetop

ventilesofaverageearnings.Thefigureshowsheterogeneityinsponsorshipwithinfirmsize

categories.Therearetwointerestingpatterns.Sponsorshipratesarehigherforsmallfirmsin

thetopventileofearnings(27percent)thanforlargefirmsinthelowestventileofearnings(14

percent).Withineachcategoryoffirmsize,sponsorshipratesincreasewithmeanemployee

earnings.Thesechangesinsponsorshipratesareatlowermeanearningsamonglargefirms

thanamongsmallfirms.

[InsertFigure1]

Afirm’slikelihoodofofferingDCplansdependsonthedemandfortheseretirement

benefits.Itisonlyworthwhileforanemployertosponsorplansiftheyexpectadequate

participationamongcoveredemployees.Thesepatternsofsponsorshipacrossfirmsizeand

meanemployeeearningscouldbeexplainedbysponsorshipdecisionsdrivenbyexpected

numberofparticipants.Individualparticipationratesincreasewithearnings—asweexamine

laterinthepaper—andthereforeexpectedparticipationincreasesinthenumberofworkers

withhighearnings.

Figure1(B)plotsaverageparticipationratesforfirmsgroupedbysizeandaverage

employeeearnings.AsevidentinTable2,smallerfirmshavehigherparticipationrates.ForEINs

with100ormoreemployees,averageparticipationratesaremonotonicallyincreasingin

averagetotalearnings.Averageparticipationratesincreasemonotonicallyamonglargefirms.

8ItwouldbeclearertousethesameearningsthresholdstogroupEINs,regardlessofEINsize.Resultsinvolvingothercut-offsandusingmediansinsteadofmeansaresubjecttodisclosurereview.

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Smallandmediumsizedfirmsillustrateadifferentpattern.Participationratesarehighestat

thebottomandtopendofthemeanearningsdistribution.9

3.3.2 Individualparticipationacrossincome

Theseresultssuggestthatsponsorshipandparticipationratesvaryacrossaveragefirm

earnings,particularlyatsmallandmedium-sizedfirms.Tobetterunderstandtheseresults,

Table3showshowcoverageandparticipationratesvaryacrossworkerearnings.Table3shows

jobswithlowerearningsarelesslikelytobecoveredbyDCplans,atfirmssponsoringDCplans.

Thereareevenlargerdifferencesinparticipationrates,andtake-upratesvarysubstantially

acrossincome.Amongworkersearningbetween$100,000and$150,000in2012,roughly93

percentwereatfirmssponsoringDCplansand76percentmadetax-deferredcontributions,for

atake-uprateof82percent.Incontrast,amongworkersearning$20,000to$30,000in2012,

roughly75percentwerecoveredbyDCplansyetonly31percentparticipated,foratake-up

rateof41percent.Take-uprateswereevenloweratjobsearninglessthan$20,000.

[InsertTable3here]

Therelationshipbetweentake-upandincomeisconsistentwithsponsorshiprates

acrossfirmsizeandaveragefirmearnings.Firmsneedsufficientworkerparticipationtooffset

costsassociatedwithsponsoringDCplans,andsufficientworkerparticipationonlyhappens

amonghighlypaidemployees.Inlightofthetake-upratesacrossearnings,wewouldexpect

lowsponsorshipratesatsmallandmediumfirmsthatpaylowwages,asillustratedinFigure1.

3.3.3 TenurerequirementsforDCcoverage

WehavethusfarimplicitlyassumedallworkersatfirmssponsoringDCplansareeligible

toparticipate.WhilenondiscriminationrulesunderERISAconstrainfactorsthatlimitemployee

eligibility,somerequirementsstillexist.Ourjob-levelestimatesignoretheseeligibility

requirements.Asaresult,ourjob-levelestimatesarelikelyanupper-boundoncoveragerates

andalowerboundonparticipationrates(take-up).

9Theremightbeamechanicalrelationshipamongsmallfirmswithlowermeanwages.Iffirmswithoneemployeeareinthelowestventilesofearnings,thentheparticipationrateismechanicallyhigh.Forthesefirmstheaverageparticipationrateisone,sincethisfocusesonfirmsthatofferDCplans.

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Employeesgenerallymustbeallowedtoparticipateinaqualifiedretirementplanifthey

areatleast21yearsoldandhave1yearofservice.Therearesomesituationsinwhichworkers

mightnotbeeligibleforemployercontributionsuntil2yearsofservice.However,employees

mustbeallowedtomakeelectivedeferralcontributionsafter1yearorless.10

Toinvestigatethepotentialroleoftenurerequirements,wetakethesubsetoffirmsin

2012thathave1styearemployeesand“tenured”employees.Inparticular,weanalyzeEINsthat

existfor2010,2011and2012,withatleastonefirst-yearemployee(in2012)andatleastone

“tenured”employee,whichwedefineasbeingintheW-2recordsin2010or2011inaddition

to2012.

Table4presentsDCplancoverageratesforthissubsetofEINs.While27.8percentof

thesefirmsofferDCplansin2012,only9.3percentofthemhaveplanswithfirst-year

employees.Thissuggeststhatupto18.5percentoffirmshavetenurerequirements,whichis

aroundtwo-thirdsoffirmsofferingDCplans.Forfirmswithfewerthan10employees,8.2

percentofferDCplans,andonly1.1havefirstyearemployeesmakingcontributions.In

contrast,amongfirmswith100ormoreemployees,74.2percentofferplans,with45.2offering

planstofirst-yearemployees.Thedifference39.9percentisanestimateoftheupperboundon

theshareoffirmsthathavetenurerequirements.Theseresultsareconsistentwithsmaller

firmsbeingmorelikelytohavetenurerequirements.Thiscouldbeexplainedbysmallerfirms

havinggreaterincentivetoretainemployeesduetohigherhiringandtrainingcostsperworker.

However,thereisalsoamechanicalrelationshipwithlargerfirmsbeingmorelikelytohave

bothtenuredandnewemployees,andalsotohavepeoplecontributingatall.

[InsertTable4]

3.4 HeterogeneityinsponsorshipbyBusinessRegisterfirmcharacteristics

Table5presentssponsorshipratesandaverageparticipationacrossfirmtypeand

primaryindustry,highlightingsubstantialheterogeneityacrossfirms.Employer-levelmeasures

10Thisrequirementdoesnotapplytocertain“leased”employees.

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ofsponsorshipandwithin-firmtake-upratesarethenlinkedtofirmcharacteristicsfromthe

BusinessRegister(BR).Categoriesoforganizationincludenon-profit,federalgovernment,

state/localgovernment,corporation,soleproprietorship,andpartnership.Wegroupfirmsby

industryusingtheNorthAmericanIndustryClassificationSystem(NAICS)Sectorcodes.

[InsertTable5]

PanelApresentsofferratesandaverageparticipationratesacrossfirmtype.Not

surprisingly,only3.3percentofsoleproprietorshaveDCplans.11

Thisnumberislargerthanthenumberofone-employeefirmswithDCplansforacouple

reasons.Peoplewhoarehiredassomeone’sloneemployeearelikelydifferentthansomeone

whoisself-employed(soleproprietor).

ThehighestratesofsponsorshipareamongState/localgovernments,withoverhalfofferingDC

plans,followedbynon-profitorganizationsat28percent.Amongfor-profitbusinesses,12.7

percentofS-corporations(S-corps)and14.2percentofPartnershipsofferDCplans,compared

to19percentofC-corporations(C-corps).12ComparedtoS-corps,C-corpstendtobeolderfirms

employingoldertenuredworkers.S-corpsandpartnershipsarebothpassthroughentities—the

company’sprofitsshowupasincomeontheindividualreturns.

Thesecondcolumnshowstheaverageparticipationratesacrossfirms.Theaverageis

overthepercentparticipatingateachfirm.Thelowestaverageparticipationrateisamongnon-

profitsandstate/localgovernments,around30percent.State/localgovernmentworkersare

morelikelytohaveaccesstodefinedbenefit(DB)plans,aswell,whichcouldexplainthelower

averageDCparticipationrates.ThehighestaverageparticipationratesareforSandC-corps,

botharound49percent.Theaverageparticipationrateforsoleproprietorsislessthan100

11SoleproprieterreferstoabusinessthatfiledScheduleC,soitisnotanincorporatedbusiness.Whilemostdonothaveemployees,theycan.Businesseswithemployeeshavealotofincentivetoincorporate,becauseotherwisethefaceliabilityissues.Iftheyincorporate,theymaytreatthemselvesasanemployee.12AnS-corporationisaspecialtypeofcorporationwiththeSubchapterSdesignationfromtheIRS.AnimportantdifferencebetweenC-corpsandS-corpsisthatprofitsandlossesfromS-corpsgetpassedontopersonaltaxreturnsandthebusinessesthemselvesarenottaxed.ThereisalsomorelimitedliabilityprotectionforS-corps,andshareholdersarenotnecessaryshieldedfromlitigationfromemployees.

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percentbecausesoleproprietorshipisabouttheownershipstructureratherthanthenumber

ofemployees.

PanelBpresentsthesamestatisticsbutgroupingfirmsbymajorindustrysector.

Utilities,managementandpublicadministrationhadthehighestratesofDCplansponsorship,

whereasthelowestrateswereinaccommodationandfood,andagriculture,forestryand

fishing.Construction(9.5percent)andtransportation(10.7percent)arealsoindustrieswith

manyfirmsandofferratesthatarebelowtheoverallmeanofaround14percent.Overall,

industrieswithsmallerfirmsandhigherturnoverhavehigherratesofDCsponsorship.Average

participationratesarehighestamongutilities,management,andthefinanceandinsurance

sectors,allover60percent.Participationratesarealsohighforfirmsintheprofessional

services(59percent)andmining(56percent)sectors.Theyarelowestintheaccommodation

andfoodsector(13percent),whichoftenemploysmanypart-timeandshort-termworkers.13

3.5 CoverageinpensionplansusingForm5500

Next,wecompareourestimatesofDCcoverageusingW-2swithbothDCandDB

sponsorshipinForm5500data.WefocusonprivatesectorEINsthatareintheW-2sandthe

BusinessRegister.14Publicsectorjobs(federal,stateandlocal,orIndiantribalgovernments)

areexcludedfromthesamplebecausetheyareexemptfromForm5500filingrequirements.

InTable6,eachEINiscategorizedbywhetheritofferedDCplansinW-2s(in2012),and

bywhetheritofferedDCorDBplansaccordingtoForm5500(planyearendingdateincalendar

year2012).AnEINofferedaDCplanaccordingtoF5500iftherewasoneormoreDCplans

associatedwiththeEINwithactiveparticipants.AnEINofferedaDBplaniftherewasatleast

oneDBplanwithactiveparticipants.13Thesenumbersarepurelydescriptive.Thereareknowndifferencesinfirmsizeacrossindustry,andwehaveshownsponsorshiptoincreaseinfirmsize.Therearealsodifferencesinemployeeturnoveracrossindustry,whichcouldimpactparticipationrates,particularlyatfirmswithtenurerequirementsforDCplanparticipationandvestingofemployercontributions.Certain“leased”employeesarealsoexemptfromnondiscriminationrulesunderERISA.14MostEINsintheF5500dataareassociatedwithfirmsintheBR.WealsocheckedwhetherEINsareassociatedwithnon-employerfirms.AmajorityofEINsthatareinForm5500butnotintheBRareindeednon-employerfirms.Infutureworkwemayincorporatetheseintotheanalysis,butfornowweareonlylookingatEINsthatlinktotheBR.

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14

ThefirstpanelofTable6—“UsingEIN-levelmeasures"—focusesonmeasuresof

sponsorshipinW-2recordsandForm5500attheEIN-level.ThecolumnforEINsgivesthe

distribution(inpercent)ofEINsthatdonotofferDCorDBplansinW-2orForm5500(84.4

percent),offerDCinW-2swithnocorrespondingF5500plans(6.5percent),andsoforth.15The

columnfor"Jobs"isthedistributionofjobs(inpercent)atEINsthatofferplans:e.g.,31.6

percentofjobsareatEINsthatdonotofferplans.AlittleoverhalfofthejobsatEINsthatoffer

DCintheW-2s(66.8percentofjobs=30.2+28.5+0.7+7.4)haveF5500recordsforDCplans

(35.9=28.5+7.4).ThepercentagesofjobsarecomputedbyweightingeachEINbythenumber

ofdistinctworkerswithW-2recordsin2012.

[InsertTable6]

ThereareafewreasonswhymanyEINsintheW-2sdonothaverecordsinF5500.Some

verysmallplans(SEPs,SIMPLEs,andsingle-employeeplansthatfile5500-EZ)areexemptfrom

F5500reportingrequirements.Informationonsuchsmallplansisnottreatedaspublic

informationandthereforeunavailableintheF5500researchfiles.TherecouldbemultipleEINs

thatareownedbythesamebusinessentity.Thatis,therecouldbetwoEINsusedforpayroll,

buttheF5500filingisonlyreportedusingoneofthem.Alternatively,therecouldbeaseparate

EINforpayrollandforF5500filings.Finally,multiemployerandmultipleemployerplanswere

notrequiredtoreportallEINsassociatedwiththeseplansuntil2015.

TheissueofmultipleEINscanbedealtwithbyleveragingtheCensusBureau’sBusiness

RegistertolinkEINsthatareassociatedwiththesamefirm.Wepresentnumbersbasedonthis

linkageinPanelB.—“Usingfirm-levelmeasures."Morespecifically,W-2andF5500information

collapsedtothefirmlevelusingthefirm-levelidentificationvariablestogroupEINsformulti-

unitfirms.Here,afirmoffersaDCplaninW-2sifanyEINassociatedwiththefirmoffersaDC

plan.Similarly,afirmoffersaDC(orDB)planinForm5500ifanyEINassociatedwiththefirm

sponsorsatleastoneDC(orDB)planintheForm5500.Thedistributionoffirmsacross

categoriesofDCandDBplancoverageissimilartothedistributionofEINsacrossthese

15Forexample,therow“DC(W2,5500);DB(5500)”meansanEINofferedaDCplaninbothW-2andForm5500,andofferedaDBplaninForm5500.

DRAFT

15

categories.Thedistributionofjobsacrosscategorieschangesalot.Thepercentageof“none”

decreasedslightlybecausetherewereEINsassociatedwiththesamefirmthathadDC

contributionsassociatedwithoneEINandnoDCcontributionsassociatedwithanotherEIN,

andyetneitherEINshowedupintheForm5500.ThenumberofjobsatfirmswithDCplans

accordingtobothW-2sandF5500increasedfrom28.5percentto38.1percent,andtheshare

withDCintheW-2onlydecreasedfrom30.2percentto11.4percent.Thisfindingisitself

important:mostjobswithDCplansintheW-2appearinForm5500records,aftergrouping

EINstogetherusingtheBRinfrastructure.Becauseofthis,wecanuse5500datatoassignplan

characteristicstoW-2records,aswedescribenextinthecontextofautoenrollment.

Nevertheless,thenumbersthatarefromcollapsingbytheBRidentificationvariablesshouldbe

thoughtofasanupperboundonthejobs-levelcoveragerates.

Finally,wenotethatonly0.1percentofEINsofferonlyDBplans,withroughly0.1

percentofjobsatsuchfirms.IntermsofidentifyingwhetherornotanEINofferspensionplans

(DBorDC),ourW-2basedmeasureofDCsponsorshipcloselyapproximatesoverallpension

coverage.

3.6 Autoenrollment

AnothershortcomingofmeasuringDCsponsorshipusingW-2recordsaloneisthat

importantplancharacteristicsarelacking.TheForm5500datahelpaddressthisissue,

particularlyinmeasuringemployeradoptionofautoenrollment.

WeassignplancharacteristicstofirmsusingtheForm5500andtheBusinessRegister

infrastructure.Table7presentsestimatesofDCplanautoenrollmentcoverage.EINsare

categorizedintothefollowingrows:(1)DCcoverageinW-2s,autoenrollmentaccordingto

F5500.(2)DCcoverageinW-2s,noautoenrollmentaccordingtoF5500.(3)DCcoverageinW-

2s,unknownautoenrollmentbecausenoactiveDCplansassocatedwiththisEINinF5500

records.(4)NoDCcoverageinW-2s.

[InsertTable7]

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16

ThecolumnsareconstructedsimilarlytoTable7.Thefirstcolumnisthedistributionof

EINsbywhatweknowaboutDCplanautoenrollment.Only0.4percentofEINsofferDC(inW-

2s)anduseautoenrollment(accordingtoForm5500filings),6.9percentofEINsofferDCinW-

2s(andfileForm5500)butwithoutautoenrollment,and6.5percentofEINsofferDC(inW-2s)

butwithunknownautoenrollmentstatusbecausethereisnocorrespondingForm5500record.

AsinTable1,86.2percentofEINsdoNOTofferDCplansinW-2s.(NOTE:tocomparethiswith

thepreceedingtable,thisincludes84.4+1.6+0.1+0.1=86.2).Thecolumnfor"Jobs"isthe

distributionofjobs(inpercent)atEINsthathaveautoenrollment(6.3percent),donothave

autoenrollment(29.5percent),haveunknownautoenrollment(30.9percent)orhavenoDC

coverage(33.2percent).

Thesecondpanel—“Usingfirm-levelmeasures”—usesallW-2informationfromthe

EINsandForm5500informationassociatedwiththefirm.IftherearenoForm5500records

associatedwiththeEIN,weappendinformationontheactiveDCplanssponsoredbyotherEINs

associatedwiththesamefirm.Here,anEINhasDCautoenrollmentif(a)aForm5500record

existsfortheEIN,withautoenrollment,(b)noForm5500recordexistsfortheEIN,butthereis

leastoneactiveDCplanwithautoenrollmentatotherEINsassociatedwiththesamefirm.

ThereisDCcoveragewithunknownautoenrollmentiftheEINoffersDCplaninW-2,butthere

isnoactiveDCplanassociatedwiththefirminForm5500records.Therearestill86.2percent

ofEINswithnoDCcoveragebecausethisfocusesonEINsofferingDCinW-2s,ratherthan

changingtofirmsofferingDCinW-2s.Thejobs-leveldistributionchangesmorethantheEIN-

leveldistribution.13.4percentofjobsareatfirmswithautoenrollment,and41.8percentareat

firmsthathavehavenoplanswithautoenrollment.

4. Comparingnewmeasurestoself-reportedratesfromCPSTobetterunderstandthestrengthsandweaknessesofmeasuringDCplansponsorship

andindividualparticipationusingW-2records,wedirectlycomparethesenewmeasuresto

self-reportedinformationfromtheCurrentPopulationSurveyAnnualSocialandEconomic

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17

Supplement(CPSASEC).16Eachyear,betweenFebruaryandApril,theCPSASECsurveys

approximately75,000householdsabouttheirincomesandcharacteristicsoftheirjobsheldin

previouscalendaryear,includingtwoquestionsaboutemployment-basedretirementplans.

First,thosewhoworkedinthepreviouscalendaryearareasked:

OtherthanSocialSecuritydid(ANY)employerorunionthat(name/you)workedforin(thepreviouscalendaryear)haveapensionorothertypeofretirementplanforanyofitsemployees?

Iftheyanswer“yes,”theyarethenasked:

(Were/Was)(name/you)includedinthatplan?

Anaffirmativeresponsetothefirstquestionindicatesworkingatanemployerthat

sponsoredaretirementplanandanaffirmativeresponsetoboththefirstandsecondquestions

indicatesparticipatingintheplan.Whilethesemeasuresareregularlyusedtomonitor

retirementplancoverageandparticipation,Copeland(2015)showsthatCPSASECcoverage

andparticipationratesdivergefrompatternsintheNationalCompensationSurvey(NCS)and

elsewhere,raisingconcernsabouttheefficacyofusingCPStostudyretirementplancoverage.17

ThefirstCPSquestionisdesignedtoidentifycoveragebyDCorDBplansatanyjob

duringtheyear.18IntheW-2records,theequivalentforDCcoveragemeanshavinganyjobin

theyearatafirmthatoffersaplan.Similarly,intheW-2recordsaworkerparticipatesifshe

makesDCcontributionsatanyjobinagivencalendaryear.Conceptually,thiscorrespondswell

withaffirmativeresponsestobothCPSquestions,exceptDBisabsentintheW-2s.Throughout,

theCPSASECsampleisrestrictedtoindividualsage25to64whoreportworkingatawageand

16InthisversionweareonlycomparingCPSresponsestomeasuresofDCcoveragefromtheW-2records.WeplantobringinForm5500informationonDBcoverage,butourabilitytodosoislimitedbyexistingdatauseagreements.17WhileCopelandfocusesmainlyonchangesthatoccurfollowingtheCPSASECredesignin2014(about2013,heraiseesconcernsabouttheefficacyofthequestionsoverall.18ThereareconsiderableadvantagestotheCPSASECapproachtomeasuringretirementplancoverage.Evenifrespondentsdonotknowthespecifictypeofplansoffered,theycanstillanswerthatthereexistssometypeofretirementplanconnectedtoatleastoneoftheirjobs.

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18

salaryjobinthepreviouscalendaryear(2012).Werestrictouranalysestopersonswhoweare

abletolinktoadministrativerecordsviathePIK.19

Table8summarizestheagreementof2013CPS-ASECand2012W-2retirementplan

information,forpensioncoverageandparticipation.Lookingfirstatpensioncoverage,roughly

47percentofrespondentssaidtheywerecoveredbyaplanandworkedatfirmsofferingplans

accordingtotheW-2s.Another27.7percentreportthattheiremployerdoesnotofferany

pensionplanseventhoughtheW-2recordsindicateotherwise.AllCPSrespondentsatfirms

thatofferDCplansintheW-2recordsshouldhaveanswered“yes”tothefirstquestion.Only

5.7percentofrespondentshaveaCPSmeasureindicatingDCsponsorship,butwithout

evidenceofDCsponsorshipaccordingtotheW-2s.Errorratesareslightlylargerforcaseswith

imputedresponses,althoughtheyaregenerallysimilartothenon-imputedcases.

[InsertTable8]

ComparingparticipationratesinCPSandW-2sprovidesevidenceoferrorsinCPSaswell

aslimitationsofusingW-2records.Overall,72.6percentofworkersareconsistentacrossthe

twomeasures—27.7percentparticipateinbothCPSandW-2,and44.9percentofworkers

participateinneither.Thereisalsoevidenceofdisagreementbetweenparticipationreportedin

CPSandwhatisobservedinW-2records.Thisincludes11.6percentofworkerswhohaveDC

contributionsintheirW-2sbutreportinCPSthattheydonotparticipate.

Therearealso15.8percentofworkerswhoreportparticipatinginCPSanddonothave

DCcontributionsintheirW-2s.Inthesecases,wecannotconcludethatCPSrespondents

misreportpensionparticipation.First,usingCPSwecannotdistinguishbetweenDBandDC

sponsorshipandparticipation.SinceonlyemployeeDCcontributionsarerecordedintheW-2

records,ouradministrativerecordmeasuremayfalselylabelworkersasnotparticipatingornot

beingofferedaplaneventhoughtheyhaveaDBplan,DCplanwithonlyemployer

contributions,and/oraplanrelatedtoaunionthatisnotrecordedontheW-2.Thereisalso

19Throughout,weobserveaclosecorrespondencebetweenthefullCPSASECandthePIKSamplesuggestingnotmuchislostbyexaminingonlyresponsesforthosethatwereassignedaPIK.OurdiscussionoftheCPSASECwillthereforefocusonthePIKSample.

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19

ambiguityintheCPSwording,asitisunclearwhatitmeanstobe“included”inaretirement

plan.Aworkercouldhavea401(k),butmakenocontributiontoitinaparticularyear.Some

CPSrespondentsmaystillconsiderthemselvesincludedinthat401(k)planeveniftheyarenot

currentlycontributing.Again,thisshouldmaketheCPSmeasurelargerthanourW-2measure.

ThesediscrepanciesinthedatacouldbeexplainedbydifferencesinwhatwemeasureinCPS

andW-2s,andillustratesomelimitationsofusingW-2stomeasureparticipation.

Despitetheseconceptualdifferencesthatshouldleadtohigherreportedsponsorship

andparticipationinCPS,ourW-2measureofsponsorshipisconsiderablyhigherthantheCPS

measure,andourparticipationmeasureisonlyslightlylowerthantheCPSmeasureforprivate-

sectorworkers.Thissuggeststhat“true”coveragemightbeevenhigherthanourW-2measure

indicates.Ifwewereabletoincluderetirementplaninformationthatwecannotobserveinthe

W-2s,trueparticipationratesmightalsobehigherthantheCPSsuggests.

Table9comparesCPSresponsesandW-2measuresofretirementplancoverage,

participation,andtake-upratesfor2012.Weseeimportantdifferencesacrossdemographic

sub-groups,whichareattributablesolelytodifferencesbetweenthesurveyandadministrative

retirementplanmeasures.

Forworkerswhoreportedthattheirlongestjoblastyearwasaprivatesector,wageand

salaryposition,theCPSsponsorshipratewas53percent,whileitwas75percentintheW-2s.

Therewasalsoadifferenceinofferratesforpublicsectorworkers--81percentintheCPSASEC

versus94percentintheW-2s.Theseresultsareconsistentwiththeideathatsurvey

respondentsarefrequentlyunawareofwhattheiremployeroffersparticularlyiftheyarenot

themselvesparticipatingintheplan.

Turningtoparticipationrates,weobserveadifferentpattern.Forprivate-sector

workers,theW-2participationrateisabitlowerat39percentthantheCPSrateof44percent.

BecauseourW-2offerratesaremuchhigherandtheparticipationrateissomewhatlowerfor

theprivatesector,take-upratesasmeasuredbytheW-2sarealsomuchlower—53percent

versus83percent.

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20

Forpublic-sectorworkers,theparticipationdifferencesaremorestarkat43percentin

theW-2sversus74percentintheCPS.Thiscouldbeattributabletothelackofdefinedbenefit

informationavailableintheW-2records.TheNCSdemonstratesthatalmostallstateandlocal

workershavearetirementplanandthattheCPSunderstatesbothofferandparticipationrates

inthepublicsector.Therefore,wefocusonlyontheprivatesectorworkersfortherestofthe

results.

TheCPSsuggestsprivatesectorsponsorshipratesrisewithage,from47percent,for

thoseage25to34,to56percentforthoseage55to64.Incontrast,theW-2sshowthat

sponsorshipratesaremuchhigherandflatteracrossagegroups,withaconsistentrateof

approximately75percent.Thereismoreagreementbetweenthetwosourceswhenitcomes

toparticipationrates.Theyrisefrom35percentto48percentintheCPSASECand32percent

to44percentintheW-2s.

Sponsorshipratesdovaryinbothdatasourcesbyeducationalattainment.Theyrange

from26percentforthosewithlessthanahighschooldegreeto64percentforthosewitha

collegedegreeormoreintheCPS.IntheW-2sthecorrespondingrangeisfrom55percentto

82percent.Onceagain,theparticipationratesmorecloselycorrespondbetweenthetwodata

sourcesrangingfrom17percentto56percentintheCPSandfrom16percentto53percentin

theW-2s.

Retirementplanpatternsbyracearealsonoteworthy.Inparticular,theCPSsuggests

sponsorshipratesarethelowestforblacksat48percentwhiletheW-2ssuggesttheyare

actuallythehighestat79percent.Intermsofparticipationrates,blackparticipationislower

thannon-HispanicwhiteparticipationinboththeCPSandtheW-2s.Hispanicsofanyracehave

thelowestparticipationrateat25percentandalsosomewhatlowersponsorshipratesat64

percent.

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21

Resultsbyfirmsizeshowthatsurveyrespondentsatboththesmallestfirmsandlargest

firmsunderestimatefirmsponsorshipbyroughly20percent.20Becausesmallerfirmsareless

likelytoofferretirementplans,sponsorshipunderreportingislargerinproportionaltermsfor

thesmallestfirms.Participationratesareapproximatelythreetofivepercentagepointslower

intheW-2sthanintheCPSregardlessoffirmsize.

ForapproximatelyonequarteroftheCPSsample,unioncoveragestatuscanbe

determined.21Asisthecaseforthefullsampleofprivatesectorwageandsalaryworkers,

sponsorshipratesareunderestimatedregardlessofunionstatus.However,discrepanciesin

participationratessuggesttheCPSdoesabetterjobinmeasuringretirementplanparticipation

forunionworkersthantheW-2.Specifically,forunionworkers,theparticipationrateis66

percentusingtheCPSbutonly43percentintheW-2;theanalogousnumbersfornon-union

workersare43percentand42percent,respectivelyTheremainingprivatesectorprevalence

ofDBplansforunionworkersexplainswhywecannotreliablymeasuretheirretirementplan

participationintheW-2salone,giventhatonlyDCcontributionsarerecordedinthoserecords.

Giventhatprivatesectorunionizationratesarenowbelowsevenpercent,theunderstatement

ofoverallparticipationratesduetoDBpensionsislikelylimited.

Wehavesofarcomparedsurveyandadministrativerecordestimatesforasingle

calendaryear.BylinkingseveralyearsofCPSandW-2srecords,wecanalsoexaminehowthe

twodatasourcescompareovertime.Figure2(A)showsthatbetween2005and2012,

sponsorshipratesremainroughlysteadyintheW-2swhiletheyactuallyshowadeclineof

nearly5percentagepointsintheCPS.Intermsofparticipation,Figure2(B)showsthat

participationrateshavetrendedupwardintheW-2sfrom36.9percentto39.3percentwhile

theyhavedeclinedfrom46.3percentto43.5percentintheCPS.Figure2(C)showssimilar

patternsfortake-uprates,althoughthesechangesaresmallerthanforcoverageand

participationrates.BecauseparticipationratesforCPSincludebotherDBandDCplans,andfor

20TheCPSASECasksindividualstoreportthetotalsizeoftheiremployeracrossalllocationsfortheirlongestjobheldinthepreviouscalendaryear.21Thosehouseholdswhicharepartofthe“outgoingrotations”areaskedadditionalquestionsafterthebasicCPSinterviewincludingwhetherornotaworkerisaunionmemberorcoveredbyaunioncontract.

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22

W-2sitisonlyDCplans,itcouldbethatDBparticipation(andcoverage)isdecreasingeven

morethanDCisincreasing.Wethereforecannotconcludethaterrorsareincreasingovertime.

Inshort,theaboveanalysishasshownthattheW-2shavemanyadvantagesin

measuringretirementplansponsorshipratesoversurveys.Whenitcomestoparticipation,

however,theresultsaremoremixed.Thepoint-in-timeestimatesareslightlylowerintheW-

2sthantheCPSASECin2012(withtheexceptionofunionandpublicsectorworkers)butthe

trendsaremovinginoppositedirections.

5. IndividualcoverageandparticipationWecanalsoexplorecoverageandtake-upacrossdemographicgroupsusingAmerican

CommunitySurvey(ACS)datalinkedtoW-2records.22Weusetheemployersponsorshipand

individualparticipationmeasuresderivedfromW-2records,andinformationoneducational

attainmentandraceandethnicityfromtheACS.ACSdataarematchedtoW-2recordsatthe

person-levelusingPIKs.

DatafromACSalsoallowsustobettermeasurecoverageamongthepopulationoffull-

timeemployeeswhoshouldbecoveredbyERISAnon-discriminationrules.Theanalysissample

includes2012ACSrespondentswithvalidPIKswhosatisfythefollowingsamplerestrictions:(i)

haveatleast1W-2recordwithstrictlypositiveearningsin2012,andhaveaggregateearnings

under250,00023;(ii)ages25through64;(iii)reportworking27ormoreweekstheprevious

year,andworkedanaverageof20ormorehoursperweek;and,(iv)haveamainjobinthe

privatesector.24

22FormoreinformationabouttheACSsampledesignandothertopics,visit<www.census.gov/acs>.Formoreinformationondataaccuracyandsamplingerror,pleasesee<https://www.census.gov/programs-surveys/acs/technical-documentation/code-lists.html>.23Wealsoremovedcaseswithover5W-2recordsfrom2012becauseitisdifficulttoidentifyamainemployer;thesecouldbecontingent/leasedemployeeswhoarenotprotectedunderERISAnon-discriminationrules.24Weidentifya“mainjob”usingtheW-2recordsonly,anddeterminewhetheritisprivateorpublic-sectorusinginformationfromtheBR.WerestrictfirmsusingthesamecriteriaweusedtoanalyzeW-2andForm5500coveragerates.

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23

Table10presentscoverage,participation,take-upandcontributionratesforourACS

sampleofover1.3milliontenuredfull-timeprivate-sectorworkerswhoareeligibleto

participateinDCplansofferedbytheirmainemployer.AmongthissampleofACSrespondents,

75.4percentwerecoveredbyaDCplanattheirmainemployerand43.4percentparticipated

intheplan,foratake-uprateof57.7percent(43.4/75.4).Amongthosewhocontributedto

theseplans,employeecontributionswereanaverageof6.9percentofearnings(atthemain

job).WithinoursampleofACSrespondents,coverageandparticipationratesdifferacross

educationalattainmentandrace/ethnicity.

5.1 Heterogeneityacrossworkercharacteristics

Differencesbyraceandeducationalattainmentcouldstemfromdifferencesinthe

earningsdistributionacrossgroups,sincecoverageandparticipationvarybyincome(Table3).

Wenowexploredifferencesacrosseducationandraceafterholdingincomeconstant.We

measureraceusingfivecategories:(i)White,non-Hispanic.(ii)Black(Hispanicandnon-

Hispanic);(iii)Asian(HispanicandNon-Hispanic);(iv)Hispanic(notBlackorAsian);(v)Other

(whichincludesACScategoriesforAlaskanandAmericanNative,NH/OPI,andOther).

Educationalattainmentreferstoself-reportedhighestdegreeattainedatthetimeofthe

survey:(i)lessthanahighschooldiploma;(ii)highschooldiplomaorGED;(iii)somecollege;(iv)

four-yearcollegegraduate;(v)graduatedegree.

Forillustrativepurposes,wepresentgraphicalanalyses.ACSrespondentsarefirst

placedintodecilesofincome,usingthesumoftotalearningsacrossalljobsintheW-2

records.25Weplotestimatesofcoverage,participation,take-upandcontributionratesacross

incomedecilesseparatelybyraceandeducation.26Thefiguresillustratewithinandacross-

incomedifferencesbyraceandeducation.Whilethesamplesizesarequitelarge(hundredsto

thousandsforeverysub-sample),thedifferencesacrossdemographicgroupsareforillustrative

25Themeanincomeforthetwogroupsarenotnecessarilyequal,asisapparentforthetopbininsomeofthefigures.26Wefocusonraceandeducationbecausetheyaredemographic/socioeconomicvariablesthatarenotavailableinadministrativerecordsandareimportantvariablesthattheCensusBureaucollectsdataon.

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24

purposesonlyandhavenotundergoneformalstatisticaltesting.Fortransparency,weuse

unweighteddata.Otheranalystsmaydisagreewithourassessmentofthevisualevidence.

Figures3through6showdifferencesinoursamplebyeducationalattainment,starting

withoverallparticipationratesandthenexploringdifferencesincoverage,take-upandaverage

contributions.Figure3showsthatforeverygroup,participationratesincreaseacrossincome

deciles.Thedifferencebetweenparticipationratesbyeducationalattainmentappearlargerat

highincomedecilesrelativetolowerincomedeciles.Turningtoofferrates,Figure4shows

workerswithoutaHSdiplomaarelesslikelytoworkatfirmsthatofferDCplansthanare

workerswithaHSdiploma,acrosstheincomedistribution.Also,foralleducationlevels,lower

incomeworkersarelesslikelytobeatfirmsofferingDCthanarehigherincomeworkers.

Next,welookattake-up,whichisparticipationconditionalonbeingofferedaplan.

Figure5showsthatforthelowestdecilesofincome,take-upislowregardlessofeducation.At

higherincomedeciles,take-upratesdivergebyeducation.However,take-upratesarehigher

forcollegegraduatesthanthosewithgraduatedegrees,particularlyatthemiddleincome

deciles.ThiscouldreflectthefactthatwedonotobserveRothcontributionsandthereforewe

underestimatetakeupamonggroupswithRothcontributions(andnobefore-taxcontributions).

Taxpayerswithtemporarilylowincomehaveincentivetocontributeafter-taxratherthan

before-taxincome,andthiscouldbethecaseforgraduatedegreeholdersinthemiddledeciles

ratherthanthetopdecilesofincome.

Figure6showstheaverageshareofearningscontributedtoaplan,conditionalon

contributing.Workersarestratifiedbytotalearningsatalljobs,whereascontributionratesare

calculatedusingdeferredcompensationandtotalearningsatthemainjob.Amongworkers

withtax-deferredcontributions,thecontributionlevelishigherforcollegeandgraduatedegree

holders,acrossincomedeciles.Thelargestdifferencesincontributionratesareatthelowest

incomedeciles.

Nextweturntowithin-incomebindifferencesbyrace,presentedinFigures7through

10.Lookingfirstatparticipationrates(Figure7),thetrajectoryofparticipationratesacross

incomeissimilaracrossrace.Thepatternsforofferrates(Figure8)aresurprising.Black

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25

workersaremorelikelytobeofferedDCplans,acrosstheincomedistribution.Atlowincome

deciles,Asianworkersarelesslikelytobeofferedplans,butthenofferratesforAsiansare

indistinguishablefromothergroupsathigherincomedeciles.Forallraces,lowerincome

workersarelesslikelytobeatfirmsofferingDCthanarehigherincomeworkers.

Figure9showsthattake-upratesarelowforallgroupsinthebottomincomedeciles,

andallgroupsthereisincreasingtake-upacrossincomedeciles.Acrossincomedecilesthereis

highertake-upamongwhitesandAsians.Amongworkerswithtax-deferredcontributions,

Figure10showsthecontributionlevelishigherforAsianandwhite(non-Hispanic)workers,

acrossincomedeciles.Largestdifferencesacrossrace/ethnicityareinthelowestincome

deciles.

TheselargedifferencesinofferratesbyracecouldbeinfluencedbyBlackworkerson

averagebeingemployedatlargerfirms.InFigure11,weplotofferratesagain,thistime

controllingforfirmsize.Theresidualizedincomesarebinnedandplotted.ThebinsareNOT

necessarilythesameasintheFigureabove,sotheexactlevelsarenotdirectlycomparable.

Nevertheless,thehigherofferratesforBlackworkersdisappearaftercontrollingforfirmsize,

asdothelowerofferratesforAsians(inlowincomedeciles).Thesechangeswhencontrolling

forfirmsizestemfromdifferencesincoverageacrossfirmsize,asillustratedearlier,andthe

compositionofthefirmsemployingworkersatdifferentincomelevelsandracegroups.

6. ConclusionInthispaper,wepresentestimatesofDCplansponsorshipandparticipationusingthe

universeofW-2records.Toourknowledge,thisisthefirsttimetaxdatahavebeenusedfor

thispurpose.OurmaincontributionisdevelopingnewmeasuresofDCplansponsorshipthat

generatebetterestimatesofDCcoverageandparticipation.

OurestimatesofDCplancoverageandtake-updivergefromestimatesusingotherdata.

UsingW-2records,weestimatefirmsponsorshipratesthataresmallerthanhasbeenfound

usingemployersurveys(NCS,2012).Atthesametime,thejobsandindividuallevelcoverage

ratesarehigherthanhasbeenfoundelsewhere(Dushietal.,2011).Weshowthatindividuals

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intheCPSunderreportretirementplancoveragerates,whichleadstoinflatedtake-uprate

estimates.Theseresultshaveimportantimplicationsforunderstandingtake-upand

heterogeneityacrossdemographicandsocioeconomicgroups.

Aswehaveshown,employer-employeelinkeddataprovideimportantinformation

neededtobetterunderstandsponsorship,participationandthepotentialimpactofpolicies

incentivizingfirmsponsorship.Estimatesofnationwidepensioncoveragevarysubstantially

dependingonthesourceofdata,particularlywhethertheunitofanalysisistheworkerorthe

firm.OurestimatesofDCsponsorshipamongsmallfirmsdivergefromtheNational

CompensationSurvey(NCS)estimates,highlightingpotentialstrengthsofusingtheuniverseof

firmsorplansratherthananationallyrepresentativefirm-levelsurvey.Withsmallfirmsatthe

heartofpolicydiscussions,additionalworkinvestigatingthesedifferencesiscriticalto

producingbetterestimatesofthepotentialeffectsofpolicychanges.

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TablesTable1:PopulationcountsandDCplancoverageinW-2records(2012)

Firms(EINs) NumberinW-2records 6.2MPercentofEINsofferingDCplans 13.7

Jobs NumberinW-2records 218.9MPercentofjobsatEINwithDC 71.2Take-upamongjobsatEINswithDC 33.6

Individuals NumberinW-2records 154.8MPercentofworkersatEINswithDC 78.5Take-upamongworkersatEINswithDC 41.4

Individualswithover$3,770totalearnings NumberinW-2records 135.1MPercentofworkersatEINswithDC 80.8Take-upamongworkersatEINswithDC 45.7

NOTE:AjobisatanEINthatsponsorsaDCplaniftherearedeferredearningsfromatleastonejobattheEIN.AworkerisofferedaplanifemployedatanyfirmofferingDCplansandparticipatesiftheyhavedeferredcompensationatanyoftheirjobs.SOURCE:U.S.CensusBureau,TY2012FormW-2

Table2:DCCoverageandparticipation,byfirmsize(2012W-2s)

PanelA:EINs-level PanelB:Jobslevel

EINsize(numberofemployees)

PercentofEINs Offered

Averagetake-up

Percentofjobs Coverage

1 23.61 3.4 100.0 0.67 3.42–9 46.91 7.3 55.2 5.72 8.910–24 16.04 20.2 41.1 6.89 21.125–49 6.45 32.6 36.9 6.32 33.350–99 3.48 46.5 33.6 6.82 47.4100–499 2.84 68.5 32.5 16.13 72.1500-1,000 0.35 83.5 34.7 6.82 83.81,000-10,000 0.3 88.4 35.1 21.23 89.710,000+ 0.03 92.9 32.3 29.4 93.5TotalCount 6.2M 13.7 45.1 218.9M 71.2NOTE:Firmsaregroupedbythenumberofemployees,whichisdeterminedfromthenumberofuniquePIKsintheW2recordsassociatedwiththeEINin2012.SOURCE:U.S.CensusBureau,TY2012FormW-2

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Table3:Jobs-levelcoverageandparticipationacrossearnings

Earningscategories

AtfirmofferingDCplan(percent)

ParticipatinginDCplan(percent)

Take-uprate(percent)

$1-10k 63.6 5.6 8.8$10-20k 65.1 15.9 24.4$20-30k 75.2 31.0 41.2$30-50k 82.8 45.1 54.5$50-75k 89.3 59.3 66.4$75-100k 92.0 69.4 75.4$100-150k 92.7 76.4 82.4$150-200k 91.9 78.2 85.1$200-300k 90.4 77.2 85.4$300-500k 90.8 76.9 84.7$500k+ 91.2 75.3 82.5NOTE:Thesenumbersarebasedonjob-levelannualearningsfromthepopulationofW-2recordsin2012.Jobsareplacedintoearningscategories.Individualsmaythereforeshowupmorethanonce,butfordifferentfirms.SOURCE:U.S.CensusBureau,TY2012FormW-2Table4:PercentofEINswithDCplansforuntenuredemployees,byfirmsizeEINsize(numberofemployees) AllEmployees 1st-YearEmployeesTotal 27.8 9.3Fewerthan10 8.2 1.110–24 20.0 3.225-49 34.4 8.550-99 49.4 17.6100ormore 74.2 45.2NOTE:ThesampleisrestrictedtoEINsthatexistfor2010,2011and2012,withatleastonefirst-yearemployee(in2012only)andatleastonewhowasnot.SOURCE:U.S.CensusBureau,TY2012FormW-2

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Table5:HeterogeneityinDCPlanSponsorshipandParticipationRatesacrossEINs(in2012)

PercentoffirmsofferingDC

plans

AvgParticipationRateacrossfirmsofferingplans

PanelA:Typeoffirm SoleProprietors 3.3 47.7

S-Corporation 12.7 48.8Partnership 14.2 41.3C-Corporation 19.2 48.8Tax-exempt 19.4 46.1Non-profit 28.3 30.8State/LocalGov't 51.1 29.3

PanelB:ByNAICSsector Agr,Forest,Fish 3.0 41.0Accommodation&Food 3.6 13.0RetailTrade 8.3 34.7Construction 9.5 36.8RealEstate 9.8 51.6Arts,Entertainment 10.5 32.0Transportation 10.7 40.1Administration 10.9 41.1OtherServices 11.5 34.7Professional 18.4 59.3Mining 19.4 55.8Finance&Insurance 20.5 61.2WholesaleTrade 20.7 52.0HealthCare 23.1 43.5Information 24.1 51.7Manufacturing 26.5 46.9EducationServices 30.6 26.6Utilities 36.7 61.1Management 39.3 62.1PublicAdmin 40.4 32.9

NOTE:Firmsaregroupedbythenumberofemployees,whichisdeterminedfromthenumberofuniquePIKsintheW2recordsassociatedwiththeEINin2012.Categoriesfornon-profit,federalgovt,state/localgovernmentaredeterminedbytheEmployerCode,whilecategorizationsforthedetailedcategoriesarefromLegalFormofOrganization(LFO).EINsassociatedwiththefederalgovernmenthavebeenremoved,accordingtoCensuspolicy.FortheNAICSsector,thecategoryfor"other"isnotreportedduetosmallcellsize.Theaverageparticipationisatfirmsthatofferplans.SOURCE:U.S.CensusBureau,EIN-linkedTY2012FormW-2and2012BusinessRegister

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Table6:PensioncoverageusingW-2andForm5500(2012)

UsingEIN-levelmeasures

UsingFirm-levelmeasures

EINs Jobs EINs JobsNone 84.4 31.6 84.2 30.1DC(W2) 6.5 30.2 5.5 11.4DC(5500) 1.6 1.5 1.6 1.5DC(W2,5500) 7.0 28.5 7.8 38.1DB(5500) 0.1 0.1 0.1 0.1DC(W2);DB(5500) 0.0 0.7 0.0 0.2DC(5500);DB(5500) 0.1 0.1 0.1 0.1DC(W2,5500);DB(5500) 0.3 7.4 0.7 18.5TOTALOBS 5.9M 182.5M 5.9M 182.5MNOTES:PublicsectorjobsareexcludedfromthesamplebecausetheyareexemptfromForm5500filingrequirements.SOURCE:U.S.CensusBureau,EIN-linkedTY2012FormW-2and2012Form5500ResearchFile

Table7:AutoenrollmentinDCplanscoverage(2012)

UsingEIN-level

measuresUsingFirm-level

measuresDCcoveragecategorization(percent) EINs Jobs EINs JobsDCcoverage-autoenrollment 0.4 6.3 0.7 13.4DCcoverage-noautoenrollment 6.9 29.5 7.6 41.8DCcoverage-unknownautoenrollment 6.5 30.9 5.5 11.5NoDCcoverage 86.2 33.2 86.2 33.2Totalcount 5.9M 182.5M 5.9M 182.5MNOTE:PublicsectorjobsareexcludedfromthesamplebecausetheyareexemptfromForm5500filingrequirements.WeuseForm5500informationassociatedwiththeEIN.IftherearenoactiveDCplansassociatedwiththeEIN,weappendinforrnationontheactiveDCplansassociatedwithotherEINsassociatedwiththesamefirm.SOURCE:U.S.CensusBureau,EIN-linkedTY2012FormW-2and2012Form5500ResearchFile

Table8:Agreementof2013CPS-ASECandW-2RetirementPlanInformationforPrivateSectorWorkersAge25-64

Coverage Participation

All Non-Imputed Imputed All Non-

Imputed Imputed

W-2:yes;CPS:yes 0.469 0.481 0.42 0.277 0.297 0.195W-2:yes;CPS:no 0.277 0.27 0.306 0.116 0.105 0.158W-2:no;CPS:yes 0.057 0.042 0.118 0.158 0.137 0.248W-2:no;CPS:no 0.196 0.206 0.156 0.449 0.461 0.399SOURCE:U.S.CensusBureau,PIK-linked2013CPSASECpersonrecordsandTY2012FormW-2

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Table9:Comparisonof2013CPS-ASECandW-2RetirementPlanInformationforWageandSalaryWorkersAge25-64byDemographicGroup

OfferRate Participation

Rate Take-UpRate

CPS W-2

CPS W-2

CPS W-2

PublicSector 0.81 0.94

0.74 0.43

0.91 0.46PrivateSector 0.53 0.75

0.44 0.39

0.83 0.53

PrivateSubgroups

Age25to34 0.47 0.75

0.35 0.32

0.74 0.43Age35to44 0.53 0.74

0.45 0.41

0.84 0.55

Age45to54 0.56 0.75

0.49 0.43

0.87 0.57Age55to64 0.56 0.75

0.48 0.44

0.86 0.58

<HSGrad 0.26 0.55

0.17 0.16

0.67 0.29HSGrad 0.46 0.70

0.36 0.31

0.79 0.45

SomeCollege 0.54 0.76

0.44 0.39

0.81 0.51CollegeGrad 0.64 0.82

0.56 0.53

0.88 0.64

White 0.54 0.74

0.45 0.40

0.84 0.54WhiteNon-Hispanic 0.58 0.77

0.49 0.43

0.84 0.57

Black 0.48 0.79

0.37 0.34

0.76 0.43Asian 0.50 0.70

0.43 0.41

0.86 0.59

HispanicAnyRace 0.35 0.64

0.27 0.25

0.77 0.40

Full-timeFull-Year 0.59 0.79

0.52 0.47

0.87 0.60NotFull-timeFull-Year 0.35 0.64

0.21 0.19

0.62 0.30

FirmSize1-10 0.18 0.36

0.15 0.12

0.79 0.35Firmsize10-24 0.34 0.59

0.27 0.24

0.80 0.42

FirmSize25-99 0.48 0.74

0.39 0.33

0.82 0.45FirmSize100-499 0.58 0.84

0.48 0.43

0.82 0.51

FirmSize500-999 0.63 0.89

0.53 0.48

0.84 0.54FirmSize1000+ 0.71 0.90

0.59 0.54

0.84 0.60

Union 0.74 0.90

0.66 0.43

0.90 0.47NotUnion 0.52 0.75 0.43 0.42 0.82 0.56SOURCE:U.S.CensusBureau,PIK-linked2013CPSASECpersonrecordsandTY2012FormW-2

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Table10:IndividualcoverageandparticipationbyACSdemographiccharacteristics

Shareof

sample Coverage ParticipationTake-up

Contributionrate

All

75.4 43.4 57.7 6.9Education

NoHSdiploma 6.8 61.4 22.9 37.3 5.2HSdiploma/GED 26.3 71.5 36.6 51.2 5.9Somecollege 33.4 75.5 42.7 56.6 6.3Collegegraduate 22.4 80.5 53.4 66.3 7.6Graduatedegree 11.1 82.3 54.3 66.0 8.7

Race/ethnicity White,non-

hispanic 75.1 75.6 45.6 60.4 7.0Black 8.4 80.8 36.7 45.5 5.1Asian 5.4 74.1 46.6 62.9 8.9Hispanic 9.8 70.2 32.1 45.6 5.5Other 1.2 71.5 32.9 46.1 5.9

NOTE:Thereareroughly1,320,000observationsfromACS2012.Theshareofpopulationistheunweightedcountoverthetotalnumberofobservations.SOURCE:U.S.CensusBureau,PIK-linked2012ACSpersonrecordsandTY2012FormW-2

Table11:Comparingestimatestopreviouswork PanelA:Firms'offerratesusingW-2sandNCS(inpercent) Allfirms 1-99employees 100+employeesW-2s 14 12* 72*W-2s–restricted** 28

74

NCS(2012) 43 42 74PanelB:Workersofferandparticipationrates

Offered Participation W-2s:job-level 71 24

W-2s:PIK-level^ 79 32W-2s:PIK-level,restricted^^ 81 37NCS(2012) 55 37SIPP(2006) 57 39

SOURCE:SIPP(2006)fromDushietal.(2011),Table2:SIPPrespondentsage21-64withmainjoborbusinessin2006.NationalCompensationSurvey(NCS),2012:allworkers.^workerisofferedaplanifemployedatanyfirmofferingDC;participatesifDCcontributionatanyjob.**Restrictedtofirmsin2010-2012withatleastonetenuredandone1st-yearemployee.^^Excludesworkerswith<$3,770totalearnings.

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FiguresFigure1:Firmsponsorshipandparticipationrates:ByFirmSize&VentilesofMeanEarnings(byEINSize)(A.)PercentofEINsofferingDCplans

(B.)AverageShareofWorkersParticipating(amongFirmsOfferingDCPlans):

SOURCE:U.S.CensusBureau,TY2012FormW-2

0

20

40

60

80

100

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20Venblesofmeanearnings(byEINsize)

100ormore

Fewerthan10

10–99

0

20

40

60

80

100

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Venblesofmeanearnings(byEINsize)

100ormore

Fewerthan10

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Figure 2: CPS-ASEC and W-2 Pension Plan Information Over Time (A.)Coverage

(B.)Participation

(C.)Take-Up

NOTE:Samplerestrictedtoprivatesectorworkersage25-64SOURCE:U.S.CensusBureau,PIK-linked2013CPSASECpersonrecordsandTY2012FormW-2

0.570.53

0.76 0.75

2005 2006 2007 2008 2009 2010 2011 2012

CPS

W-2

0.47

0.44

0.370.39

2005 2006 2007 2008 2009 2010 2011 2012

CPS

W-2

0.82 0.83

0.490.53

2005 2006 2007 2008 2009 2010 2011 2012

CPS

W-2

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Figure3:Participationratesacrossearningsandeducation

Figure4:Coverageratesacrossearningsandeducation

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Figure5:Takeupratesacrossearningsandeducation

Figure6:Averagecontributionamongparticipantsbyearningsandeducation

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Figure7:Participationratesacrossearningsandrace

Figure8:Coverageratesacrossearningsandrace

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Figure9:Takeupratesacrossearningsandeducation

Figure10:Averagecontributionamongparticipantsbyearningsandrace

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Figure11:Coverageratesacrossearningsandrace,conditionalonfirmsize

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