Retirement Income Journal
The information forum of the decumulation industry.

The Achilles heel of the defined contribution system in the U.S. is that too few workers enjoy its coverage. At any given time, almost half of America’s private-sector workforce lacks access to an employer-sponsored retirement savings plan.

The half-empty status of our private pension system looks like this: Only 54% of full-time workers ages 21 to 64 have retirement plans at work; Hispanic workers, younger workers and people who work for small companies are less likely than average to have access to a plan, according to the EBRI, Employee Benefit Research Institute.  

In part because of this shortfall, the U.S. received a ‘C’ in the 2011 Mercer-Melbourne Global Pension Index. “In the private sector, the coverage of the American system isn’t as broad or as comprehensive as elsewhere,” David Knox, a Mercer partner and author of the index report told RIJ. “Many people in the workforce have no provision other than Social Security.” 

That’s a problem that we can’t really afford to ignore or (in the current catch phrase) “kick down the road.”