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Workers Who Get the Best Retirement Benefits

Emily Brandon

If you get retirement benefits through your job, you're part of the more fortunate half of the population. Only 49 percent of the 153.7 million employed Americans in 2011 worked for an employer or union that sponsored a retirement plan, and just 40 percent took advantage of the retirement benefits when they were offered, according to a recent Employee Benefit Research Institute analysis of Census Bureau data. However, several specific groups of workers are more likely to be offered and participate in retirement plans. Here's a look at the workers who get the best retirement benefits:

Full-time employees. Full-time employees often enjoy significantly better benefits than people who work part-time or part of the year. Among full-time workers between ages 21 and 64, just over half (54 percent) are offered a retirement plan at work, and 45 percent participate.

[Read: Your Retirement Benefits: What to Expect in 2013.]

Public-sector employees. Full-time employees in the public sector have significantly better access to retirement benefits than workers in the private sector. A large majority (73 percent) of public-sector workers participated in a retirement plan at work, compared with 39 percent of private-sector employees.

Older workers. Workers become more likely to participate in a retirement plan as they age. For example, more than half (54 percent) of workers ages 55 to 64 participated in a retirement plan in 2011, compared to just 17 percent of workers ages 21 to 24. In some cases, younger workers' lower likelihood of utilizing a retirement plan is a result of their low income. However, even among people earning $75,000 or more per year, older workers between ages 45 and 54 (72 percent) are still significantly more likely to be saving for retirement than workers in their early 20s (48 percent). "They typically have moved to a place in their working span where they are in more settled employment, they are more likely to be higher-compensated, and they are more likely to want to participate as they get near retirement because retirement is much closer to them," says Craig Copeland, a senior research associate at EBRI and author of the report.

High earners. Workers with higher earnings are more likely to participate in retirement plans. While less than a fifth (18 percent) of workers between ages 21 and 64 who earned between $10,000 and $19,999 participated in a retirement plan, 70 percent of those earning $75,000 or more did so, EBRI found. And a Center for Retirement Research at Boston College analysis of private-sector workers between ages 25 and 64 found that two-thirds of people in the highest earnings quintile utilize a retirement plan, while just 11 percent of workers in the bottom quintile participate.

Employees of large companies. Those who work at large companies are significantly more likely to be offered and take advantage of retirement benefits. At very small companies with fewer than 10 employees, only 14 percent of workers participated in a retirement plan. At large companies with 1,000 or more employees, more than half (55 percent) utilize a retirement plan. "Large employers typically have a large distribution of incomes for people working there," says Copeland. "The ways that discrimination rules are set up, if you offer it to the highly compensated people, you also have to offer it to the lower-paid employees." A 2011 Harris Interactive and Nationwide Financial survey of 501 small-business owners with less than 100 employees found that 69 percent say their business is too small to offer a retirement plan and more than half say it's too expensive.

[Read: 7 Reasons You Don't Have a Pension.]

Highly educated workers. The most highly educated employees are the most likely to participate in a retirement plan, even after controlling for earnings. For example, 45 percent of those without a high school diploma who earned $75,000 or more participated in a retirement plan, compared with 61 percent of those with the same earnings and only a high school diploma, and 75 percent of high earners with a graduate or professional degree.

Specific industries. Your career choice often plays a role in the type of retirement benefits you receive. Workers in the manufacturing, transportation, utilities, information, and financial industries had the highest probability of using a retirement plan, while those in the services industry were the least likely to participate in 2011, EBRI found.

Healthy people. Workers who feel that they are in poor health are often less likely to participate in a retirement plan. "Even if they have health insurance, there is typically a large amount that they have to spend in addition to what health insurance covers, and they are probably less able to work on a more consistent basis," says Copeland. For example, among workers ages 55 to 64 who report they have very good health, 57 percent participated in a retirement plan, compared to 35 percent of workers the same age who report poor health.

[Read: 10 Places With Great Retirement Benefits.]

Location. The states with the lowest levels of people participating in retirement plans were in the South and West, including Florida, Nevada, Louisiana, California, Arizona, and Texas. States in the Mid-Atlantic and upper Midwest had the highest retirement-plan participation, especially North Dakota, Minnesota, and Virginia. "If you look in the upper Midwest, there are more union workers, which plays a large role in retirement benefits," says Copeland. Two California metro areas, Fresno-Madera and Los Angeles-Long Beach-Riverside, stood out as having particularly low retirement-plan participation levels, while the Appleton-Oshkosh-Neenah, Wis., area had an unusually high participation level.

Retirement-plan participation declined by 5.91 percentage points among all states between 2001 and 2011. Michigan, Georgia, New Jersey, Nevada, and South Carolina had even sharper drops of at least eight percentage points during this period. Retirement-plan participation over the past decade increased in just three states: Colorado, West Virginia, and Oklahoma.

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