By Paula Aven Gladych
When lower-income workers have access to a pension plan at work, their eligibility and take-up rates are nearly equivalent to higher-income workers.
That’s one of the big takeaways in a study by researchers April Yanyuan Wu and Matthew S. Rutledge of the Center for Retirement Research at Boston College, who set out to explore the impact that a lack of a pension plan has on lower-income individuals.
Not surprisingly, they found that people who make less money have a smaller probability of working for a company that offers a pension plan than their higher-income counterparts.
As the retirement industry looks for ways to increase participation in retirement savings plans
, the researchers found that policies such as automatic enrollment are unlikely to close the pension coverage gap between older, lower-income individuals and their higher-income contemporaries.
The best way to achieve greater pension participation is more jobs and, in particular, more good jobs, they concluded.
“Improving the job prospects of lower-income individuals — not only so they have more success in finding any job, but so they succeed in finding the types of jobs that offer pensions and other benefits — is likely to increase pension participation
among older, lower-income individuals,” their report said.
Originally published on LifeHealthPro.com