Access and Participation


About 50 percent of workers have access to a workplace-based retirement savings plan. The participation rate of workers in those plans varies by demographic group and sector: Older, better-paid workers are more likely to be plan members than are younger, lower-wage workers. Racial and ethnic groups that have experienced discrimination, including nearly two-thirds of Latinos, are more likely than non-Hispanic whites to work for an employer that does not offer a retirement plan. Small-business and service employees, the self-employed, contingent workers, and those who work less than full time or less than year round are among the least likely to be offered a retirement savings plan. Employees of larger firms are much more likely than those in smaller firms to be offered a retirement savings plan.

A variety of strategies exist for increasing access and participation. Some approaches focus on making it easier for employers to establish and administer plans or even requiring employers to offer a retirement plan. Other approaches include incorporating features such as automatically enrolling workers in the plan and automatically escalating each year the percentage of earnings going into retirement plans.


Increasing participation

Employers should be required to automatically enroll employees in their retirement plan at an adequate minimum contribution rate and appropriate initial investment choice.  Retirement plan sponsors should also offer automatic escalation of employee contributions to encourage employees to save appropriate amounts and to re-enroll nonparticipating employees at appropriate intervals.

Policymakers should encourage employers to make matching contributions to each employee’s account.

In addition to the above, employers should give attention to educating workers about the importance of saving early, contributing regularly, and investing prudently in any retirement accounts available to them. Such education should be easy to understand and culturally and linguistically appropriate.

Multiple employer plans

Unrelated small employers should be permitted to jointly offer retirement savings vehicles to their employees through trained fiduciary administrators who offer appropriate low-cost diversified retirement investments with adequate consumer protections including understandable information, participant assistance, and reasonable claims and appeals processes.


Policymakers should simplify and strengthen retirement plan rules in ways that encourage all employers to offer some type of pension to their employees while retaining employee protections.  

Retirement plan coverage of part-time employees, employees of small firms, the self-employed, contingent workers, and lower-paid workers needs to be increased. New retirement plan vehicles and incentives, including tax incentives or small subsidies, should be created for this purpose.

The Department of Labor, the Small Business Administration, the Administration on Aging, and other agencies should develop programs to publicize retirement plan options for small-business employers and employees.

See also this chapter's section on Employer-Facilitated Retirement Saving for more information about expanding access to retirement savings plans.