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November 1990, Vol. 113, No. 11
Contributions to savings and thrift plans
Michael Bucci
Participants in employer-sponsored savings and thrift plans who earned $25,000 during 1989 could make annual contributions ranging from less than $100 to more than $6,500 depending upon their plan's administrative restrictions and the employee's chosen rate of contribution. These disparities in allowable contributions exist among all occupational groups, but are even more evident at higher compensation levels.
These findings are from analysis of individual savings and thrift plan provisions studied in the Bureau of Labor Statistics' 1989 Employee Benefits Survey. The survey furnishes data on employee benefit provisions in medium and large establishments in private industries located within the continental United States. The 1989 survey sample represents 109,000 establishments and contains benefit data that pertain to 32 million full-time employees.
Two types of retirement plans were evident in the survey-defined benefit pension plans, which include specific formulas that are used to determine an employee' benefit upon retirement, and defined contribution plans which do not attempt to provide a fixed benefit. Instead, defined contribution plans specify the level of the employer's annual contribution to the employee's individual account. Savings and thrift plans were the most common type of defined contribution plans in the 1989 Employee Benefits Survey, with 30 percent of full-time workers participating in a savings plan that was at least partially financed by their employer.1 As with most other defined contribution plans, savings and thrift plans are designed to permit the accumulation of funds that may be used for retirement or other future purposes. Final accrual is dependent upon a number of variables, including total plan contributions, investment earnings, and length of participation in the plan.
This excerpt is from an article published in the November 1990 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.
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Footnotes
1 According to data from the Employee
Benefits Survey, 48 percent of full-time employees in medium and large establishments in
private industry participated in an employer sponsored defined contribution plan in 1989.
After savings and thrift plans, the next most common type of defined contribution plan
found in the 1989 survey was profit-sharing (16 percent of employees), followed by money
purchase pension (5 percent) and stock ownership (3 percent). Complete data on defined
contributions plan incidence and provisions can be found in Employee Benefits in
Medium and Large Firms, 1989, Bulletin 2363 (Bureau of Labor Statistics, 1990)
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