The percentage of retirees who receive private-sector retirement plan income has grown by more than 10 percent since 1975, new research shows.
The Investment Company Institute arrives at this conclusion in a new report, “A Look at Private-Sector Retirement Income after ERISA, 2012.”
The report reveals that 32 percent of retirees received private-sector retirement plan income, either directly or through a spouse, compared to 21 percent in 1975. Among retirees with private sector retirement plan income, the median received per person in 2012 was about $6,300, compared to $4,800 in 1975 (in 2012 dollars).
The report adds that while 90 percent of private-sector workers with retirement plans were covered by defined benefit pension plans in 1975, only about one in five retirees received any income from private-sector plans.
The survey notes also that Social Security benefits have consistently been the largest component of retiree income and the predominant income source for lower-income retirees. In 2012, Social Security benefits accounted for 58 percent of total retiree income and more than 85 percent of income for retirees in the lowest 40 percent of the income distribution.
“Even for retirees in the highest income quintile, Social Security benefits represented one-third of income in 2012,” the report states. “Over the past 37 years, the share of retiree income from Social Security has averaged 53 percent.”
Turning to workers covered by private-sector defined benefit pensions, the research shows that the proportion of private-sector employees who worked for employers that sponsored DB plans averaged 54 percent and ranged between 50 percent and 60 percent between 1979 and 2012.
Last year, the report adds, retirement income by source (on a per capital basis) broke down as follows:
● Social Security (58 percent)
● Private pensions and annuities (14 percent)
● Government pension (13 percent)
● Asset income (10 percent)
● Other (4 percent)
● Public assistance (1 percent)