More than 40 per cent of full-time private sector employees in the U.S. say they lack access to either a pension or an employer-based retirement savings plan such as a 401(k), according to a new study by The Pew Charitable Trust.
The study, which analyzed Census Bureau data showing broad differences in retirement plan coverage across the U.S., also found just 49 per cent participate in a pension or 401(k) through the workplace, while 58 per cent have access to a plan through their employer.
Access to retirement plans vary more among the country’s metropolitan areas than across the states as a whole, says the report. For instance, the access rate among employees in the metropolitan areas ranges from 71 per cent in Grand Rapids, Michigan, to 23 per cent in McAllen, Texas.
Read: 88% of U.S. employees are stressed due to personal finances: survey
The metropolitan areas with the lowest rates of access are heavily concentrated in certain large states, the study found. Nearly three-fourths of the bottom 25 per cent are in California, Florida and Texas.
The study also found that employer size, employee earnings, worker race and ethnicity, and industry are some characteristics that can contribute to these patterns. For example, according to the data, 34 per cent of workers in the leisure and hospitality industry have access to a retirement plan, compared with 69 per cent of those who work in manufacturing.
The Pew Charitable Trust says the study presents challenges and opportunities for policymakers at the federal, state and even city levels, including increasing the availability of workplace retirement plans.
“As state and even city policymakers focus their attention on ways to boost private sector retirement saving, these area-level business and worker characteristics take on increasing relevance in efforts to tailor programs to local needs,” concludes the study.
“Though the nature of specific metropolitan areas can present obstacles to retirement security, these areas also offer opportunities for targeted approaches that can help more people gain access to savings plans in the workplace. Effective policies depend on understanding existing gaps in retirement savings and the nature of metropolitan areas’ businesses, workers and taxpayers.”
Read: More Canadians saving for retirement than Americans: survey