Private Sector Retirement Coverage Could Be Better

According to a new report from Boston College's Center for Retirement Research (CRR), improvements are needed in terms of covering more private sector employees with retirement plans. According to the CRR, while virtually all state and local workers are covered by a retirement plan, only 42% of private sector employees between ages 25 and 64 have any coverage in their current jobs. The challenge, according to the CRR, is that one-third of households lack any sort of coverage during their careers, and another large segment that moves in and out of coverage hold inadequate 401(k) balances. Regardless of how one defines coverage and participation, pension coverage was lower in 2010 than it was three decades before. The CRR is concerned that a substantial group of households will rely totally on Social Security in retirement. The problem appears to be more acute for smaller firms. The CRR recommends a new, comprehensive tier of retirement income. The full CRR brief is available on its website at http://crr.bc.edu/wp-content/uploads/2012/09/IB_12-16.pdf.