RELEASE: Troubled Future: Half of California Private Sector Employees Have No Retirement Assets

UC Berkeley Labor Center

Contact: Penelope Whitney, 510-643-8756
Berkeley–Over half of California private sector employees age 25-64 aren’t enrolled in a retirement savings plan or pension, according to a new data brief by Nari Rhee, director of the Retirement Security Program at UC Berkeley Labor Center. The brief provides a first-ever look at retirement assets—and the lack thereof—among private sector employees and working-age families in the state.

“When it comes to retirement income security, most working Californians are in trouble,” said study author Nari Rhee. “They don’t own an IRA or a 401(k), and they don’t have a pension from a current or past job. This is troubling because it means they’re falling short of what they need to have saved to avoid downward mobility in retirement.”

On July 1, 2019, the State of California will launch CalSavers, an automatic retirement savings program for private sector workers in firms with five or more employees that do not offer a pension or 401(k). The program is designed to dramatically increase the number of working Califrornians who will retire with a nest egg to supplement Social Security.

“Every Californian deserves a chance to retire in dignity after a lifetime of work,” said Katie Selenski, Executive Director of CalSavers. “This study underscores how far we have to go to get there.”

Key findings include:

Nearly half of California private sector employees (48%) lack dedicated retirement assets.
Three-quarters of low-income workers and half of middle-income workers had no dedicated retirement assets in 2014, whether through an IRA, 401(k), or a pension from a current or former employer.

Most California private sector employees (54%) are not currently building retirement assets.
Over half of private sector employees age 25-64 did not own an IRA or 401(k) or participate in a current employer pension in 2014—which meant no additional retirement contributions, investment earnings, or pension service credits. Latino workers were twice as likely as white workers (74% vs 37%, respectively) to not own an IRA or 401(k) or participate in a pension.

About 7.4 million California private sector employees age 25-64, or 61%, do not have access to a workplace retirement plan, which is the easiest way to save for retirement. This includes the majority of private sector workers of all races, and seven out of 10 Latinos. Both the number and share of private sector employees who do have access to a 401(k) or pension have shrunk this decade, despite strong employment growth.

“These findings highlight not just the state’s retirement crisis, but the overall concentration of income and wealth in California, where one in three working Californians has a low wage job, alongside some of the wealthiest people in the nation,” said Rhee. California ranks 45th out of 50 states in the U.S. when it comes to employee access to retirement plans.

The study is based on an analysis of microdata from the Census Bureau’s Current Population Survey and 2014 Survey on Income and Program Participation. View the data brief at