Explaining the Decline in the Offer Rate of Employer Retirement Plans Between 2001-2012

Workplace retirement plans (DC and DBs) help workers save for retirement conveniently, consistently, and automatically. But retirement account offer rates are steadily declining. Between 2001-2003 and 2010-2012, the retirement plan offer rate dropped from 63% to 55%. The drop is driven by a decline in both DB and DC plans. Using a probit model and an Oaxaca-Blinder threefold decomposition technique applied to data from the CPS for 2001-2003 and 2010-2012, and using longitudinal analysis of the SIPP 2008 panel waves 3 and 11, the authors find that the labor-contracting environment dominates individual and firm level variables among factors determining whether employers offer a retirement account to their workers. Therefore, attempts to raise retirement account offer rates must address the decline in workers’ bargaining power and the changes in norms relating to benefits provision. This study contributes to the important discussion about the trends in DB and DC coverage and the decline in retirement security.