Retirement plans and the sexes

By Rosemary Wright

In 2011, the oldest Baby Boom workers reached the age of 65 — an age that more than 60 million Baby Boomers will reach by 2030. The issue of retirement weighs particularly on women, who are likely to outlive men and therefore have a longer period of retirement to finance.

In the study “Paying for Retirement: Sex Differences in Inclusion in Employer-Provided Retirement Plans,” I turned to the Baby Boomers to determine whether this new generation of women were well-prepared with retirement benefits. Is the retirement gap between Baby Boom men and women narrower than for older retirees? Are women still dependent on a husband’s retirement income for security in old age? To look at these differences, I examined a large sample obtained from the 2009 Current Population Survey for the differences between Baby Boom men and women’s inclusion in retirement plans, as well as predictors of inclusion in these plans.

The results of the new study showed a significantly higher percentage of women than men (68.4% vs. 65.2%) worked for an employer who offered retirement benefits. A slightly higher percentage of men than women (92.4% vs. 91.1%) were included in their employers’ retirement programs. Overall, significant positive predictors of working for an employer with a retirement plan were sex (women more likely than men), employment in a core industry or in a primary occupational sector, educational attainment, and government worker status (government workers more likely than non-government workers). On the other hand, significant negative predictors were minority status (minorities less likely than non-minorities), age (older workers less likely than younger workers), having children younger than age 18 (those with children under the age of 18 less likely than those with no children under 18), and immigrant status (immigrants less likely than non-immigrants).

Minority status and educational level were the only two predictors for which there was a significant sex difference. Minority women were less likely than minority men to work for an employer with retirement benefits. As educational attainment increased, men were more likely than women to work for an employer providing retirement benefits.

Significant positive predictors of a worker actually being included in an employer’s retirement program were age (older workers more likely to be included than younger workers), employment in a core industry or in a primary occupational sector, educational attainment, marriage (married workers more likely than non-married workers), and government worker status. Minority status was the only significant negative predictor of inclusion (minority workers less likely than non-minority workers to be included).

There was only one variable with a significant difference between men and women: government employment. Female public employees were more likely than male public employees to be included in their employers’ retirement programs.

Two major good-news stories emerge from this study. First, a much larger group of workers is included in an employer’s retirement plan in this study than received pension benefits in earlier studies. This reflects the expansion of the types and availability of retirement benefits available to workers today, and is a good sign for retirement security as Baby Boom workers begin to retire. Second, there was only one predictor for which the likelihood of being included in a retirement plan differed significantly by sex — and in this case, women had an advantage. It is hoped that this reflects a general shift toward women being less dependent on a husband’s retirement income for security in old age.

However, the high likelihood of public employees being included in a retirement plan also suggests a need for further study of the impact of the reduction of these benefits. Because many occupations into which women are traditionally sorted are in the public sector — teachers and other education occupations, health care providers, librarians, health care workers, and clerical workers — the impact of benefit reduction on women should be assessed. As a result, the economic security that is associated with public employment may be illusory and further study is important to project the effects on workers and on other retirement and safety net programs if a large number of public employees have their retirement benefits reduced.

Rosemary Wright is a student in the PhD program in Community Psychology at Wichita State University. Her interests include the economics of aging and their relationship to well-being in later life, changing attitudes toward retirement, and strategy and policy planning for an aging population. Read the entire “Paying for Retirement: Sex Differences in Inclusion in Employer-Provided Retirement Plans” from The Gerontologist, available for free for a limited time, for more information.

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