Another Year After the Current Population Survey Redesign and More Questions About the Survey's Retirement Plan Participation Estimates

The Annual Social and Economic Supplement to the U.S. Census Bureau's Current Population Survey (CPS) is one of the most-cited sources of income data for retirement-age Americans (typically ages 65 or older). It has also been used to provide annual estimates of employment-based retirement plan participation. The Employee Benefit Research Institute (EBRI) has done annual reports on pension participation among workers based on this data. The Census Bureau conducted a redesign of the CPS questionnaire in 2014 on the income questions that resulted in much lower estimates of the percentages of workers who participate in an employment-based retirement plan. For example, the percentage of full-time, full-year wage and salary workers ages 21-64 participating in an employment-based retirement plan was more than 11 percentage points lower in 2015 after the redesign relative to the 2013 estimate under the traditional questionnaire design. This translates into more than 9 million fewer individuals participating in an employment-based retirement plan. The groups of workers most affected were those with the highest likelihoods of participation — older, higher earners, and employees of larger employers. This paper describes the results from the 2016 CPS, which asks about participation in 2015, and compares them with prior years both before and after the redesign of the CPS questionnaire. As with last year, the results showed larger declines than have been found historically and were inconsistent with another government survey where participation in employment-based retirement plans has been found to hold steady from 2011-2015. Rather modest modifications could be made within the CPS questionnaire to improve the retirement plan participation estimates. Until that time, any person or organization using the data or those reading analyses from the data need to be aware of the issues with the CPS data on pension and retirement plan participation. The estimates from the most recent surveys could easily be misconstrued as an erosion in coverage, as opposed to an issue with the data