An Investment Company Institute (ICI) study has determined underreporting of retirement plan participation in the US Census Bureau’s Current Population Survey (CPS).
ICI officials said participation underreporting rose substantially following a recent revision to the household survey’s questionnaire.
The ICI probed showed 63 percent of workers aged 26 to 64 in 2014 participated in an employer plan or had a spouse who participated.
“More American workers are benefiting from employer plans than the conventional wisdom would suggest,” Peter J. Brady, an ICI senior economist who co-authored the paper with ICI associate economist Steven Bass, said. “This is for two reasons. First, the most widely cited statistics undercount retirement plan participation. Second, many only look at the headline statistic, which provides a snapshot of participation at a single point in time. But preparing for retirement is more like a movie than a snapshot, and what matters are the resources that accumulate throughout a career. Many of the younger and lower-income workers who are not participating today will do so later in their careers, and as a result, will reach retirement having accumulated employer plan resources.”
The study referenced retirement plan participation increases with age, noting among working taxpayers aged 26 to 34 in 2014, 52 percent were active participants in a retirement plan or had a spouse who was an active participant.
Among those aged 55 to 64, 68 percent participated or had a spouse who participated.