Fifty-one percent of all 

private-industry employees 

participated in a retirement 

plan in March 2008. There are 

two general types of retirement 

plans: defined-contribution plans, 

which specify the level of employer 

contributions to be placed in

individual employee accounts,

and defined-benefit plans, which

provide employees with guaranteed

benefits that are based on a predetermined formula.

The estimates in this issue are 

from the National Compensation 

Survey of Employee Benefits in 

the United States, March 2008. 

(See www.bls.gov/ebs.) Future 

issues of Program Perspectives 

will feature data from the March 

2009 survey.

Most workers had only one type

of retirement plan in March 2008,

but some had two. Forty-three percent

of private-industry workers had a 

defined-contribution plan and 20

percent had a defined-benefit plan.

Among occupational groups, 

the rate of participation in

retirement plans was highest 

among management, business, and 

financial employees—77 percent. 

The lowest rate of participation 

was that of service workers—25 

percent. (See table 1.)

The only surveyed group that 

had greater participation in

defined-benefit plans than

defined-contribution plans was 

union workers. The defined-benefit 

participation rate was 67 percent 

HEALTH

PAID LEAVE

RETIREMENT RETIREMENT

continued inside►

Defined-contribution 

plans more common than 

defined-benefit plans

M A R C H 2 0 0 9 ON RETIREMENT BENEFITS

PERSPECTIVES

ROGRAM ISSUE 3

NATIONAL

COMPENSATION

SURVEY

Benefits Series

www.bls.gov/ebs

Welcome to

the third issue of

Program Perspectives,

a new publication from

the U.S. Bureau of Labor 

Statistics in which BLS

programs showcase

their latest data.

U . S . B U R E A U O F L A B O R S T A T I S T I C S
2 PROGRAM PERSPECTIVES • MARCH 2009

from cover page►

U.S. BUREAU OF LABOR STATISTICS

for union workers, more than triple 

the average rate of all private industry

workers. Union workers’ rate of 

participation in defined-contribution 

plans, 42 percent, was about the

average for all private industry 

workers. Overall, union workers’ 

rate of participation in retirement 

plans—at 80 percent—was greater 

than that of nonunion workers, which 

was 48 percent. (See table 2.)

Take-up rates and 

trends in employee 

participation

Participation in defined-contribution plans has been growing in 

private industry over the last 10 

years—from 36 percent of

employees in 1999 to 43 percent in 

2008. The level of participation in 

defined-benefit plans has hovered 

around 20 percent throughout the 

same period. (See chart 1.)

Not all employees who are

offered retirement plans choose to 

participate. The percentage of

TABLE 1

TABLE 2

Bargaining-unit

status

Definedbenefit

plan

Definedcontribution

plan

Either plan

or both

plans

Union 67 42 80

Nonunion 15 43 48

Percent of private-industry workers who participate 

in retirement plans, by bargaining-unit status, 

March 2008

Occupational group Defined-benefit

plan

Defined-contribution

plan

Either plan or

both plans

Management, business, and financial 34 69 77

Professional and related 26 56 64

Service 8 20 25

Sales and related 13 41 46

Office and administrative support 22 52 60

Construction, extraction, farming,

fishing, and forestry 24 35 47

Installation, maintenance, and repair 26 48 58

Production 27 45 57

Transportation and material moving 24 38 51

Percent of private-industry workers who participate in retirement plans, by 

occupational group, March 2008
employees with access to a plan who

choose to participate is called the 

take-up rate. In March 2008, 95

percent of employees who had access 

to a defined-benefit plan chose to 

participate in the plan, compared 

with 70 percent of employees with

access to a defined-contribution 

plan. (See table 3.) The lower 

take-up rate of defined-contribution 

plans in part reflects the percentage 

of such plans that require employee 

contributions: about two-thirds 

of the people who participated in 

defined-contribution plans were 

required to contribute to the plans, 

compared with 1 out of 25 persons 

in defined-benefit plans. In other 

words, when a retirement plan 

requires employees to make their 

own contributions to it, employees 

are less likely to take up the plan.

Costs of plans

In March 2008, the total cost 

to employers of private-industry 

retirement plans was 96 cents per 

hour worked. The cost of definedcontribution plans, 53 cents per 

hour, was higher than the cost of 

defined-benefit plans, 43 cents. 

However, because the percentage of employees participating in 

defined-contribution plans was 

www.bls.gov/ebs MARCH 2009 • PROGRAM PERSPECTIVES 3

CHART 1

continued on back page►

TABLE 3

Type of retirement plan Access rate Participation rate Take-up rate

Defined-benefit plan 22 20 95

Defined-contribution plan 62 43 70

Either plan or both plans 67 51 77

Access, participation, and take-up rates for all private-industry workers, March 

2008 (in percent)

Rate of participation in retirement plans, private 

industry, 1999–2008

60

40

20

0

Percent

1999 2004 2008

 Defined-benefit plan

 Defined-contribution plan

 Either plan or both plans
Access to a retirement plan. The 

availability of a retirement plan 

for employees’ participation or the 

promise of availability upon the 

fulfillment of a service requirement.

An employee who is offered a 

retirement plan is considered to 

have access to the plan regardless 

of whether he or she actually

participates in it.

Participation in a retirement plan.

Employees in contributory plans 

are considered to be participants 

if they have paid all required

contributions and fulfilled all 

applicable service requirements. 

Employees in noncontributory 

plans are counted as participating 

regardless of whether they have 

fulfilled the service requirements.

Take-up rate of a retirement plan.

The percentage of workers with 

access to a plan who participate in 

the plan. Take-up rates are computed 

by dividing the number of employees

participating in the plan by the 

number of employees with access 

to the plan, multiplying by 100, and 

rounding to the nearest 1 percent.

Defined-benefit plan. A plan that 

provides employees with guaranteed 

retirement benefits that are based 

on a benefit formula. A participant’s 

retirement age, length of service, 

and preretirement earnings may 

affect the benefit received.

Defined-contribution plan. 

A plan that specifies the level 

of employer contributions and 

places those contributions into 

individual employee accounts. 

Retirement benefits are based on 

the level of funds in the account 

at the time of retirement.

GLOSSARY

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

more than double the percentage 

participating in defined-benefit 

plans, the cost per participating 

employee is higher for definedbenefit plans than for definedcontribution plans. The cost of 

defined-benefit plans has fluctuated 

during the past decade, increasing

and decreasing depending on

factors such as the interest rate 

and the rate of return on investments.

The predictability of cost is one 

reason that some employers prefer 

defined-contribution plans to 

defined-benefit plans. (See chart 2. 

For further information, also see 

www.bls.gov/ect.) ●

from page 3►

CHART 2

Cost

$0.60

$0.40

$0.20

$0.00

Employer costs per hour worked for retirement 

plans, private industry, 2000–08

Note: Data are from the National Compensation Survey, Employer Costs for

Employee Compensation, March reference month.

 Defined benefit

 Defined contribution

2000 2001 2002 2003 2004 2005 2006 2007 2008