For additional assistance on 

benefits, contact one of our 

information offices:

NATIONAL: WASHINGTON, DC

(202) 691-6199 TDD: (800) 877-8339

NCSinfo@bls.gov www.bls.gov/ebs

REGIONAL:

ATLANTA

(404) 893-4222

BOSTON

(617) 565-2327

CHICAGO

(312) 353-1880

DALLAS

(972) 850-4800

KANSAS CITY

(816) 285-7000

NEW YORK

(646) 264-3600

PHILADELPHIA

(215) 597-3282

SAN FRANCISCO

(415) 625-2270

BUREAU OF LABOR STATISTICS

U.S. DEPARTMENT OF LABOR

www.bls.gov/ebs 

GLOSSARY

The next Program Perspectives will feature high deductible health plans.

Defined contribution plan. A defined 

contribution retirement plan specifies 

the level of employer and employee 

contributions and places those contributions into individual employee 

accounts. Retirement benefits are based 

on the level of contributions, plus 

earnings, that have accumulated in the 

account at the time of retirement. 

Access to a plan. An employee has 

access to a plan if the employee is in 

an occupation that is offered the plan. 

By definition, either all employees in 

an occupation have access to a plan or 

none have access.

Participation. Participation is the 

percentage of employees who actually 

enroll in a benefit plan. A plan may be 

a contributory plan, which requires employees to contribute to the plan’s cost, 

or a noncontributory plan, in which the 

employer pays 100 percent of the cost 

of the benefit. 

Individual retirement accounts 

(IRAs). An IRA is a retirement savings plan. There are several types of 

IRAs: traditional IRAs, Roth IRAs, 

savings incentive match plans for 

employees (SIMPLE) IRAs, and 

simplified employee pension (SEP) 

IRAs. Traditional and Roth IRAs are 

established by individuals who are 

allowed to contribute earnings up to a 

set maximum dollar amount. SIMPLE 

and SEPs plans are retirement plans 

established by employers. 

Employer matching contribution. The 

employer matches a specified percentage of employee contributions. The 

matching percentage can vary by length 

of service, amount of employee contribution, or other factors. 

TABLE 2

Private industry workers’ method of contribution to defined contribution plans, by selected worker and establishment characteristics, 2009, in percent

ings are not subject to income tax 

upon distribution.

Of all private sector workers who 

participated in defined contribution 

plans in 2009, 82 percent participated in plans that made pretax contributions and 22 percent participated 

in plans that made posttax (Roth 

401(k)) contributions, with the method of contribution varying by worker 

and establishment characteristics. 

For example, 17 percent of workers 

in small establishments participated 

in a plan that made posttax contributions, and 26 percent of workers in 

large establishments participated in 

such plans. (See table 2.) ●

Characteristic Pretax 

contribution

Roth 401(k) (posttax) contribution

Worker characteristic

All workers 82 22

Management, professional, and related 87 24

Service 77 24

Sales and office 81 22

Natural resources, contruction, and maintenance 73 15

Production, transportation, and material moving 80 18

Union 77 24

Nonunion 82 22

Establishment characteristic

Goods-producing industries 76 16

Service-providing industries 84 23

1 to 99 workers 76 17

100 or more workers 86 26

Note: Sums of individual items may be greater than 100 because multiple methods of 

contribution are available to some employees. Sums of individual items may be less than 

100 because the contribution method is not determinable.

from page 3►
2 PROGRAM PERSPECTIVES • MARCH 2011 U.S. BUREAU OF LABOR STATISTICS 

from cover page►

CHART

Percent of private industry workers participating in defined contribution retirement 

plans, selected occupational groups, March 2010 

Types of Defined 

Contribution Plans

A savings and thrift plan requires 

an employee to contribute a predetermined amount of earnings into 

an individual account, all or part 

of which may be matched by the 

employer. Generally, there are no 

minimum amounts that an employee 

may contribute; there are, however, 

annual maximum limits that are set 

by the Internal Revenue Code. Both 

the employee and employer contributions can be either a flat amount 

or a percentage of the employee’s 

pay, although the latter is more 

prevalent. In 2009, 62 percent of 

savings and thrift plan participants 

in private industry were in plans 

where the employer matched up to 

a specified percentage of employee 

earnings, with one-half of the plans 

matching employee contributions 

up to 6 percent of earnings and the 

remaining half of plans matching 

lower contribution ceilings, typically 

3 or 4 percent of earnings. Alternatively, matching contributions varied, 

including an amount based on the 

level of employee contribution. 

A deferred profit-sharing plan is 

a plan under which the company 

contributes a fixed or discretionary 

amount to employee accounts, based 

on the amount of company profits. 

The contributions may be spread 

equally among all employees or may 

be based on the employee’s salary. 

A money purchase pension plan 

provides fixed employer contributions, typically calculated as a percentage of employee earnings. The 

contributions are allocated to individual employee accounts each year. 

Some plans may allow employee 

contributions, but employees are not 

required to make contributions. 

A savings incentive match plan 

(SIMPLE) is limited to employers 

with 100 or fewer employees who 

do not have any other qualified 

retirement plan. SIMPLE plans can 

be either part of a 401(k) plan or 

established as individual retirement 

accounts (IRAs).

An employee stock ownership 

plan (ESOP) is a plan under which 

the employer pays a designated 

amount into a fund that is typically 

invested in company-related stock. 

Upon retirement, funds in the plan 

are distributed to employees according to a formula. 

A simplified employee pension 

(SEP) is a defined contribution plan 

whereby employers of any size business establish individual accounts for 

employees at a financial institution. 

Only the employer contributes to a 

SEP. Employer contributions to the 

accounts must be made for all eli

All workers

Management, professional, and related

Production, transportation, and material moving

Natural resources, construction, and maintenance

Sales and office

Service

0 10 20 30 40 50 60 70

Percent

Occupational group
2 PROGRAM PERSPECTIVES • MARCH 2011 U.S. BUREAU OF LABOR STATISTICS 

from cover page►

CHART

Percent of private industry workers participating in defined contribution retirement 

plans, selected occupational groups, March 2010 

Types of Defined 

Contribution Plans

A savings and thrift plan requires 

an employee to contribute a predetermined amount of earnings into 

an individual account, all or part 

of which may be matched by the 

employer. Generally, there are no 

minimum amounts that an employee 

may contribute; there are, however, 

annual maximum limits that are set 

by the Internal Revenue Code. Both 

the employee and employer contributions can be either a flat amount 

or a percentage of the employee’s 

pay, although the latter is more 

prevalent. In 2009, 62 percent of 

savings and thrift plan participants 

in private industry were in plans 

where the employer matched up to 

a specified percentage of employee 

earnings, with one-half of the plans 

matching employee contributions 

up to 6 percent of earnings and the 

remaining half of plans matching 

lower contribution ceilings, typically 

3 or 4 percent of earnings. Alternatively, matching contributions varied, 

including an amount based on the 

level of employee contribution. 

A deferred profit-sharing plan is 

a plan under which the company 

contributes a fixed or discretionary 

amount to employee accounts, based 

on the amount of company profits. 

The contributions may be spread 

equally among all employees or may 

be based on the employee’s salary. 

A money purchase pension plan 

provides fixed employer contributions, typically calculated as a percentage of employee earnings. The 

contributions are allocated to individual employee accounts each year. 

Some plans may allow employee 

contributions, but employees are not 

required to make contributions. 

A savings incentive match plan 

(SIMPLE) is limited to employers 

with 100 or fewer employees who 

do not have any other qualified 

retirement plan. SIMPLE plans can 

be either part of a 401(k) plan or 

established as individual retirement 

accounts (IRAs).

An employee stock ownership 

plan (ESOP) is a plan under which 

the employer pays a designated 

amount into a fund that is typically 

invested in company-related stock. 

Upon retirement, funds in the plan 

are distributed to employees according to a formula. 

A simplified employee pension 

(SEP) is a defined contribution plan 

whereby employers of any size business establish individual accounts for 

employees at a financial institution. 

Only the employer contributes to a 

SEP. Employer contributions to the 

accounts must be made for all eli

All workers

Management, professional, and related

Production, transportation, and material moving

Natural resources, construction, and maintenance

Sales and office

Service

0 10 20 30 40 50 60 70

Percent

Occupational group
For additional assistance on 

benefits, contact one of our 

information offices:

NATIONAL: WASHINGTON, DC

(202) 691-6199 TDD: (800) 877-8339

NCSinfo@bls.gov www.bls.gov/ebs

REGIONAL:

ATLANTA

(404) 893-4222

BOSTON

(617) 565-2327

CHICAGO

(312) 353-1880

DALLAS

(972) 850-4800

KANSAS CITY

(816) 285-7000

NEW YORK

(646) 264-3600

PHILADELPHIA

(215) 597-3282

SAN FRANCISCO

(415) 625-2270

BUREAU OF LABOR STATISTICS

U.S. DEPARTMENT OF LABOR

www.bls.gov/ebs 

GLOSSARY

The next Program Perspectives will feature high deductible health plans.

Defined contribution plan. A defined 

contribution retirement plan specifies 

the level of employer and employee 

contributions and places those contributions into individual employee 

accounts. Retirement benefits are based 

on the level of contributions, plus 

earnings, that have accumulated in the 

account at the time of retirement. 

Access to a plan. An employee has 

access to a plan if the employee is in 

an occupation that is offered the plan. 

By definition, either all employees in 

an occupation have access to a plan or 

none have access.

Participation. Participation is the 

percentage of employees who actually 

enroll in a benefit plan. A plan may be 

a contributory plan, which requires employees to contribute to the plan’s cost, 

or a noncontributory plan, in which the 

employer pays 100 percent of the cost 

of the benefit. 

Individual retirement accounts 

(IRAs). An IRA is a retirement savings plan. There are several types of 

IRAs: traditional IRAs, Roth IRAs, 

savings incentive match plans for 

employees (SIMPLE) IRAs, and 

simplified employee pension (SEP) 

IRAs. Traditional and Roth IRAs are 

established by individuals who are 

allowed to contribute earnings up to a 

set maximum dollar amount. SIMPLE 

and SEPs plans are retirement plans 

established by employers. 

Employer matching contribution. The 

employer matches a specified percentage of employee contributions. The 

matching percentage can vary by length 

of service, amount of employee contribution, or other factors. 

TABLE 2

Private industry workers’ method of contribution to defined contribution plans, by selected worker and establishment characteristics, 2009, in percent

ings are not subject to income tax 

upon distribution.

Of all private sector workers who 

participated in defined contribution 

plans in 2009, 82 percent participated in plans that made pretax contributions and 22 percent participated 

in plans that made posttax (Roth 

401(k)) contributions, with the method of contribution varying by worker 

and establishment characteristics. 

For example, 17 percent of workers 

in small establishments participated 

in a plan that made posttax contributions, and 26 percent of workers in 

large establishments participated in 

such plans. (See table 2.) ●

Characteristic Pretax 

contribution

Roth 401(k) (posttax) contribution

Worker characteristic

All workers 82 22

Management, professional, and related 87 24

Service 77 24

Sales and office 81 22

Natural resources, contruction, and maintenance 73 15

Production, transportation, and material moving 80 18

Union 77 24

Nonunion 82 22

Establishment characteristic

Goods-producing industries 76 16

Service-providing industries 84 23

1 to 99 workers 76 17

100 or more workers 86 26

Note: Sums of individual items may be greater than 100 because multiple methods of 

contribution are available to some employees. Sums of individual items may be less than 

100 because the contribution method is not determinable.

from page 3►