New EBRI Research: Most Ex-Workers Over 65 Receiving Employer Pensions; Largest Payments go to Public-Sector Retirees

2/12/2003

From: Jim Jaffe, 202-775-6353; e-mail: jaffe@ebri.org Craig Copeland, 202-775-6356, e-mail: copeland@ebri.org both of EBRI

WASHINGTON, Feb. 12 -- Slightly more than half (54.5 percent) of former workers over 65 are receiving pension income from the firm they or their spouse once worked for, according to the most recent government data (1998), and the median monthly payment is $549.Public-sector retirees had median monthly income of $904, largely because their coverage often included automatic annual cost-of-living adjustments that are rarely found in the private sector.

The research, by the Employee Benefit Research Institute (EBRI), is contained in the February 2003 issue of EBRI Notes, and focuses on so-called "traditional" defined benefit pension plans, typically funded entirely by employers and providing lifetime payments for a retired worker. It found that 55 percent of retired public employees are receiving automatic cost-of-living increases in their pensions, while only 17 percent of those retired from private-sector employment receive a similar benefit.

Among the report's other findings: -- Slightly more than a quarter (26.8 percent) of retirees over 54 with pension income opted to reduce their potential benefit in order to guarantee payments to a survivor after their death. The highest such election rate, 39 percent, was found among married men.

-- Among former working Americans older than 64, 5.3 percent received pension payments not from a defined benefit plan, such as 401(k)-type plans. None of the figures in the study include Social Security payments.

"This data confirms that retirees in the late 1990s had many sources of pension income," said EBRI President and CEO Dallas Salisbury, "but that employer-based retirement income is still reserved for slightly more than half of the American workforce."

EBRI is a private, nonprofit, nonpartisan public policy research organization based in Washington, DC (http://www.ebri.org). Founded in 1978, its mission is to contribute to, to encourage, and to enhance the development of sound employee benefit programs and sound public policy through objective research and education. EBRI does not lobby and does not take positions on legislative proposals. EBRI receives funding from individuals, employers of all types, unions, foundations, and government.